Tag Archive for: Janet Yellen

Mr. President, Fire Your Woke Minions And Appoint Some Competent People

The failure of three banks in the last two weeks, including Silicon Valley Bank on Friday and Signature Bank on Sunday, is a saga of utter government incompetence. Call these bank collapses Biden’s Banking Busts. The Biden administration has been obsessing on woke causes while banks teeter toward insolvency.

Three days before Silicon Valley Bank collapsed, Treasury Secretary Janet Yellen cautioned that climate change puts the banking industry at risk. Yellen was in la-la land, speculating that future storms and tornadoes could diminish the value of banks’ assets.

Weather is a risk, but she was oblivious to the much more immediate problem facing banks — the plummeting value of the bonds they own. She was heedless to the impending downfall of SVB and possibly several other small banks that had purchased long-term bonds when interest rates were near zero.

In 2022, after doing nothing to tame inflation the previous year, the Federal Reserve hiked rates repeatedly to make up for their previous inaction. Those rapid rate hikes, the most drastic in decades, made the banks’ bonds lose value.

A week before Yellen’s climate change harangue, Moody’s Investors Service already had delivered bad news to SVB that it was about to be downgraded several notches because its inventory of bonds was not worth enough to repay depositors. A day before Yellen’s loony speech, Federal Deposit Insurance Corp. Chairman Martin Gruenberg also cautioned that the diminishing value of the bonds held by banks meant a $620 billion problem ahead.

The Office of the Comptroller of the Currency, a part of Yellen’s Treasury, is responsible for examining the financial condition of banks. It failed to avert the SVB collapse.

Yellen has been an outspoken activist for climate change, women’s rights and diversity, including appointing the Treasury’s first ever racial equity officer. Apparently, the hordes of bureaucrats working under her are also too busy with diversity, equity and inclusion seminars to prevent banks from failing.

As the SVB crisis unfolded, Yellen was MIA. Now she says she’s monitoring several banks “struggling with the whiplash in prices” of their bonds.

Financial experts warn smaller banks are in for a rough ride, though the big banks like JPMorgan Chase, Bank of America, Wells Fargo and others are not apt to be in trouble.

Admittedly, SVB’s managers made mistakes. Banking’s first rule is that assets should match deposits. If depositors can demand their money back anytime, then using their money to buy long-term bonds is risky. SVB had to sell $21 billion worth of bonds at a fire sale, taking a $1.8 billion loss.

Trading was suspended Friday in the stocks of several small banks whose share prices plunged on fears they were in the same situation. On Sunday, New York bank regulators shut Signature Bank.

President Joe Biden created the perfect storm for what may become a string of banking busts. In 2021, he lied about inflation, saying it was temporary and “no serious economist” considered it a threat. Yellen and Federal Reserve Chairman Jerome Powell, whose first term was about to expire, went along with Biden and did nothing to bring down prices. It was the single biggest monetary policy mistake in half a century.

Then in March 2022, newly reappointed Powell launched aggressive rate hiking to cure what the Wall Street Journal called “a mess largely of the Fed’s own making.” As rates rose fast, startup companies could no longer afford to borrow, and instead started withdrawing their bank deposits. Without regulatory intervention, the downfall of SVB was almost a foregone conclusion.

On March 7, Powell predicted that the Fed will likely “increase the pace of rate hikes” to continue bringing down inflation. A task made more difficult by our spendaholic president’s budget proposal, which is an inflation accelerator.

As rates rise, more banks could be in trouble. Continued government incompetence is not an option.

Mr. President, get rid of your woke minions and appoint competent people. Our money and jobs are at stake.

On Sunday night, Biden said he’s “firmly committed to holding those responsible for this mess fully accountable.” Look in the mirror, Mr. President.

Instead, he’s looking at the list of Democratic campaign donors and scurrying to bail them out. Ninety-eight percent of all political contributions from people who worked at internet companies went to Democrats in 2020. Silicon Valley residents coughed up nearly $200 million for Democrats. No surprise that the Treasury and the Fed are offering bailouts, whether they use that word or not.

Biden’s reckless spending and incompetent monetary policy are causing this string of banking busts. And John Q. Public will end up paying one way or another.

COPYRIGHT 2023 CREATORS.COM

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

AUTHOR

BETSY MCCAUGHEY

Betsy McCaughey is a former lieutenant governor of New York and chairman of the Committee to Reduce Infection Deaths. Follow her on Twitter @Betsy_McCaughey. To find out more about Betsy McCaughey and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. McCaughey is the author of “Beating Obamacare.”

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EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved.


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Most I N C O M P E T E N T Cabinet in U.S. History?

On April 1st, 2021 (April Fools Day) Joseph Robinett Biden Jr. tweeted,

April Fools’ Day, or All Fools’ Day, is an annual custom on April 1st consisting of “practical jokes” and “hoaxes.”

Little did anyone realize that this single Biden tweet was both a joke and a hoax fostered upon the the American people.

On April 29th, 2021 the White House stated in its FACT SHEET: 100 Days In, Biden-Harris Administration Makes History with Presidential Appointees the following,

Today, the White House Office of Presidential Personnel is releasing new data about the historic number and diversity of presidential appointees hired by Day 100 of the Biden-Harris Administration.

Since Biden’s inauguration we have learned the following about Biden’s “diverse” cabinet:

  • Attorney General Merrick Garland. AG Garland has spied on the American people, designated parents who speak out about what their children are taught in public schools as “domestic terrorists”, over ruled the FBI and ordered a raid on the private residence of President Donald J. Trump, worked with social media platforms to censor Americans. House Resolution 743 — 117th Congress (2021-2022) stated, “On October 4, 2021, the Department of Justice released a memorandum from Attorney General Garland promising to announce a series of measures designed to address the alleged rise in criminal conduct toward school personnel, including opening dedicated lines of communication for threat reporting. Attorney General Garland’s memo made no mention of the statutory authority or authorities the Department would use to address those threats…Attorney General Garland has failed to faithfully uphold his oath and has by his actions, validated the belief of many Americans that the Department of Justice has been transformed into an unstoppable, partisan, Federal weapon used to officially punish political opponents. In an October 4, 2021, memorandum, Attorney General Garland announced that the Department of Justice would address alleged criminal conduct of lawful First Amendment activities objecting, among other things, to the teaching of “equity”, “inclusion”, and “critical race theory” concepts in public school districts.” Read  the full text of HR 743 — 117th Congress (2021-2022).
  • Homeland Security Secretary Alejandro Mayorkas. On February 1, 2023 Congressman Andy Biggs filed a resolution to impeach Secretary Alejandro Mayorkas for “high crimes and misdemeanors.” According to USA Today, “Biggs listed as examples Mayorkas’ opposition to continue building the border fence, which had been a priority of former President Donald Trump, and opposition to keeping the Trump administration’s “Remain in Mexico” program. Biggs also criticized Mayorkas for slowing down Title 42, a pandemic-era border health rule that allows the government to quickly deport people here illegally because of the COVID-19 health emergency.” Mayorkas “started immediately emasculating the very, very strong policies of the previous (Trump) administration,” Biggs said.
  • Treasury Secretary Janet Yellen. In a New York Times op-ed published on Monday (27 Feb 2023) while she visited the nation, Treasury Secretary Janet Yellen claimed American taxpayers have a “moral duty” to defend Ukraine’s eastern border from invasion by giving aid to the nation. Yellen said the American support “is motivated, first and foremost, by a moral duty to come to the aid of a people under attack.” So far, American lawmakers have so far earmarked more than $110 billion of moral duty from taxpayers to defend the border against a Russian invasion. “Our work is not over. In fact, it is more vital than ever that we continue supporting the Ukrainians,” she continued. “Ukraine’s military resistance depends on a government that can function effectively, as well as a stable economy that can help finance defense efforts over the long term. By fortifying the ‘home front,’ our economic assistance is helping make possible Ukraine’s stalwart frontline defense against Russia.”
  • Secretary of Defense Defense Lloyd Austin. The Stars and Stripes reported on October 6, 2022, “Defense Secretary Lloyd Austin on Thursday directed senior defense leaders to begin changing the names of military bases and assets honoring the Confederacy, bringing the Pentagon in line with recommendations issued by a congressional commission. Austin said he agreed with the findings of the Naming Commission, a group convened by Congress to purge the military of commemorative references to the Confederacy, and is committed to implementing the renaming plan as soon as possible.” On 23 Feb 2023 on NPR’s All Things Considered, woke Defense Secretary Lloyd Austin responded to questions on what would constitute a victory in the Ukraine-Russia war by stating that “Ukraine’s going to decide what victory’s going to look like.” Asked how this war ends, Austin responded, “I think, again, we’re going to focus on what’s in front of us right now and put them in the best possible position to continue to be successful. And I think that will lead us to Ukraine being in a — again, a good place, whether or not the fighting continues or whether or not they decide to go to the negotiating table.”
  • Secretary of Transportation Pete Buttigieg. Michele Gama Sosa opinion editor for the Daily Caller asked Is Pete Buttigieg The Most Incompetent Transportation Secretary In History? Sosa on January 12, 2023 wrote, “Things just keep getting worse for Pete Buttigieg. After Southwest Airlines ruined many Americans’ holiday plans with mass cancelations, now a “glitch” is causing hundreds of flights to be canceled again.”  Trending Politics, on March 3, 2023 reported, “On Thursday, authorities announced that Patrick Wojahn, the mayor of College Park, Maryland, had been arrested on numerous charges of suspected child p*rnography and had subsequently resigned from his position. The Prince George’s County Police Department reported that Wojahn, 47, was accused of 56 counts of alleged child p*rnography, including 40 counts of possessing child exploitative material and 16 counts of distributing child exploitative material. According to the Washington Blade, Wojhan was mentored by Pete Buttigieg. The article was written in 2019 and goes into depth about the relationship the two political figures had. During his Council elections and his first run as a mayoral candidate, Wojahn knew he had no choice but to run as an openly gay man because of his media prominence with the marriage equality lawsuit. But being elected as an out gay mayor landed him a fortuitous mentor…The two continued to talk over the phone and Buttigieg explained the conference to him and what would take place at the meeting. Later, they would both attend a White House reception during the Obama administration where Dave and Chasten (Buttigieg) would meet as well. Wojahn said, “I actually met Mayor Pete Buttigieg shortly after I was elected mayor in 2015, I went to the U.S. Conference of Mayors’ Winter Meeting in D.C. in January and he was assigned to be my buddy.”
  • FBI Director Christopher Wray, CIA Director William Burns and Secretary of State Antony Blinken. in a column titled TWITTER FILES: FBI, CIA, DoD, Et al. Actively Worked With EVERY Social Media Platform to Control and Censor Speech wrote, “In this latest drop we see the FBI, CIA, DoD, State Department, Pentagon, et.al. dictating censorship to Twitter, Facebook, Microsoft, Verizon, Reddit, even Pinterest, and many others. This is so vast, so deep, it’s …… the whole of the state. The files show the FBI acting as doorman to a vast program of social media surveillance and censorship, encompassing agencies across the federal government – from the State Department to the Pentagon to the CIA. The government was in constant contact not just with Twitter but with virtually every major tech firm. We live in a surveillance state.”

The Bottom Line

Breitbart’s Charlies Spiering on wrote,

President Joe Biden boasted that his cabinet “looks like America” during his first meeting with his team on Thursday.

“This is the first in American history that the Cabinet looks like America,” Biden said as his cabinet gathered at the White House. “That’s what we promised we were going to do, and we’ve done it.”

[ … ]

Kamala Harris is the first female vice president, Treasury Secretary Janet Yellen is the first female Treasury Secretary, Secretary of Defense Lloyd Austin is the first black defense secretary, and Interior Secretary Deb Haaland is the first Native American cabinet secretary.

Health and Human Services Secretary Xavier Becerra and Homeland Security Secretary Alejandro Mayorkas are both the first Hispanic Americans to hold their positions.

Transportation Secretary Pete Buttigieg is the first Senate-confirmed openly gay cabinet secretary.

What has happened since Biden was selected president is unbelievable. Biden has based his cabinet selections on sex, race and sexual orientation, not on competence.

We have seen a war started, high gasoline prices, the cost of food sky rocket, the cost of services rising, lockdowns, mandated Covid jabs, train derailments, ship yards shut down, taxes and spending going through the roof.

Add to this the invasion of our Southern border by illegal aliens and drug cartel members who are bringing in enough fentanyl to kill every single American. Human trafficking, crime, defund the police, neuter not only our children but our law enforcement agencies and police.

QUESTION: What has this cabinet ACTUALLLY DONE for the American people?

Perhaps it is better to ask: What is this cabinet DOING TO HARM the American people EACH AND EVERY DAY?

We report. You decide if this is the most I N C O M P E T E N T Cabinet in U.S. History.

©Dr. Rich Swier. All rights reserved.

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The Biden Administration Says U.S. Not in a Recession, but Federal Statutes Say Otherwise. Who is Right?

Is the U.S. economy in recession? The answer is, paradoxically, both easier and more complicated than you might think.


As expected the United States posted negative growth for the second consecutive quarter, according to government data released on Thursday.

“Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022, following a decrease of 1.6 percent in the first quarter,” the US Bureau of Economic Analysis announced.

The news prompted many outlets, including The Wall Street Journal, to use the R word—recession, which historically has been commonly defined as “economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

The White House does not agree, however, and following the release of the data, President Biden said the US economy is “on the right path.”

The comments come as little surprise. Treasury Secretary Janet Yellen had recently hinted that the White House would contend the economy wasn’t actually in a recession even if Q2 data indicated the economy had contracted for a second consecutive quarter.

“There is an organization called the National Bureau of Economic Research that looks at a broad range of data in deciding whether or not there is a recession,” Yellen said. “And most of the data that they look at right now continues to be strong. I would be amazed if they would declare this period to be a recession, even if it happens to have two quarters of negative growth.”

“We have a very strong labor market,” she continued. “When you are creating almost 400,000 jobs a month, that is not a recession.”

Yellen is not wrong that NBER, a private nonprofit economic research organization, looks at a much broader swath of data to determine if the economy is in a recession, or that many view NBER’s Business Cycle Dating Committee as the “official recession scorekeeper.”

So White House officials have a point when they say “two negative quarters of GDP growth is not the technical definition of recession,” even though it is a commonly used definition.

On the other hand, it’s worth noting that federal statutes, the Congressional Budget Office, and other governing bodies use the two consecutive quarters of negative growth as an official indication of economic recession.

Phil Magness, an author and economic historian, points out that several “trigger” provisions exist in US laws (and Canadian law) that are designed to go into effect when the economy posts negative growth in consecutive quarters.

“For reference, here is the definition used in the Gramm-Rudman-Hollings Act of 1985,” Magness wrote on Twitter, referencing a clause in the Act. “This particular clause has been subsequently retained and replicated in several trigger clauses for recessionary measures in US federal statutes.”

It’s worth noting that Magness doesn’t contend the two consecutive quarters definition is the best method of determining whether an economy is in a recession, but simply points out that claims that it’s an “informal” definition of recession are untrue.

“It may not be a perfect metric, but it has a very long history of being used to determine policy during recessions,” Magness writes.

Some readers may find it strange that so much heat, ink, and energy is being spent on something as intangible as a word, which is a mere abstraction that has no value. And some policy experts agree.

“Whether [we’re] in a technical recession is less interesting to me than the following 3 questions,” Brian Riedl, an economist at the Manhattan Institute, recently said. “1) Are jobs plentiful? (Yes – good) 2) Are real wages rising? (Falling fast – bad) 3) Is inflation hitting fixed income fams? (Yes – bad.)”

Others contend that definitions matter, and that by ignoring the legal definition of recession, the Biden White House can continue to argue that the US economy is “historically strong” even as economic growth is negative, inflation is surging, and real wages are crashing.

As Charles Lane recently pointed out in the Washington Post, words have power. He shares a colorful anecdote involving Alfred E. “Fred” Kahn, an economist who served in the Carter Administration who was instructed to never use the words “recession” or “depression” again.

In 1978, Kahn — a Cornell University economist in charge of President Jimmy Carter’s inflation-fighting efforts — said that failure to get soaring prices under control could lead to a “deep, deep depression.” Carter’s aides, perturbed at the possible political fallout, instructed him never to say that word, or “recession,” again.

We don’t know whether this instruction stirred the wrath of Kahn, a verbal stickler notoriously disdainful of cant and euphemism; in a previous government job, he had sent around a memo telling staff not to use words like “herein.”

It did trigger his wit, though: In his next meeting with reporters, Kahn puckishly said the nation was in “danger of having the worst banana in 45 years.”

Lane’s anecdote about Kahn is instructive because it reveals something important about these debates. While they may have a certain amount of importance as far as political spin goes, they are meaningless as far as economic reality is concerned. Substituting the word “banana” for recession did not change economic conditions or the economic outlook one bit, which no doubt was precisely Lane’s point.

My colleague Peter Jacobsen made this point effectively earlier this week.

“[You] don’t need a thermometer to feel if it’s hot outside,” he wrote. “Economic issues, especially inflation, top the list of concerns for voters going into the 2022 midterms, and it isn’t particularly close. So officially defined recession or not, it doesn’t really matter.”

Moreover, Jacobsen explains, macroeconomic data like GDP have historically been the tool of politicians and bureaucrats, who use them to justify economic interventions.

“When GDP numbers fall below a certain level, politicians can use that data to try to push income back up. Or perhaps when the economy is ‘running too hot’ politicians can use fiscal and monetary policy to slow down the economy.

All of these metaphors about economies running hot or stalling are based on a central planning view of the economy. In this view, the economy is like a machine which we can adjust to bring about the proper results. Without macroeconomic statistics, central planners have fewer means by which to justify particular interventions. We can’t claim we need stimulus if we can’t point to some data indicating it’s necessary.”

The takeaway here is an important one. We don’t need “bureaucratic weathermen” telling us when the economy is good or bad anymore than we need them “managing” the economy with the money supply, which is precisely how we got here in the first place.

So while the debates over the R word are likely to continue, it’s important to remember it doesn’t really matter if you call this economy a recession or a banana. The fundamentals speak for themselves.

AUTHOR

Jon Miltimore

Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune. Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times.

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EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

Yellen: I Helped Blow Up The World

The most-destructive terrorists do not use guns or bombs.  They use their power and influence to lie in public, backed by force of law, destroying people, industry and even entire nations and their governments.  They are found in the halls of finance, and the more-powerful they are the worse they are.  Today, the head of same is found in the Federal Reserve, seated before Congress in the form of ChairSatan Janet Yellen.

First, let me acknowledge the important contributions of Chairman Bernanke. His leadership helped make our economy and financial system stronger and ensured that the Federal Reserve is transparent and accountable. I pledge to continue that work.

Uh huh.  The man who first claimed subprime is contained, who in fact invented and promoted the policies that led to the housing bubble in the first place (people seem to forget that) and then who invented and promoted the policies that have now led to the largest global asset bubble in history (second only to the one he built first, and which exploded in his face.)

The unemployment rate has fallen nearly a percentage point since the middle of last year and 1-1/2 percentage points since the beginning of the current asset purchase program. Nevertheless, the recovery in the labor market is far from complete.

There has been no recovery in employment rate of the population.  At all.

Since anyone driven from the workforce by Fed policy doesn’t count as “unemployed” Yellen’s statement is akin to arguing that the natural death rate has not gotten worse over time which may well be true but if you’re shooting people by the busload there are still more people dying — and you’re responsible for their deaths.

Among the major components of GDP, household and business spending growth stepped up during the second half of last year.

Uh huh.  All of it borrowed, I might add.  Median household income adjusted for inflation is not rising.  Therefore all of this increased spending must be borrowed money, which is not an improvement in the common man’s situation.

The same is true with businesses; they never saw their indebtedness decrease — not even in the depths of the recession.

We have been watching closely the recent volatility in global financial markets. Our sense is that at this stage these developments do not pose a substantial risk to the U.S. economic outlook.

The Fed caused that volatility.

Our current program of asset purchases began in September 2012 amid signs that the recovery was weakening and progress in the labor market had slowed.

There has been no recovery.  Not in inflation-adjusted incomes nor in the employment rate of the population.  Neither has improved one iota since 2009.  Borrowing more money is not an “improvement” as incomes must rise net-net to service the new debt.  They haven’t.

The Committee has emphasized that a highly accommodative policy will remain appropriate for a considerable time after asset purchases end.

Of course you have.  The government is blowing more money than it takes in too, and you know full well that this can’t continue forever either, but you won’t take the candy away from the baby – even when told, point-blank as Bernanke was on multiple occasions over the last few years, that Congress is incapable of rational fiscal management on its own without being forced to do so by market-based borrowing costs.

Regulatory and supervisory actions, including those that are leading to substantial increases in capital and liquidity in the banking sector, are making our financial system more resilient. Still, important tasks lie ahead. In the near term, we expect to finalize the rules implementing enhanced prudential standards mandated by section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. We also are working to finalize the proposed rule strengthening the leverage ratio standards for U.S.-based, systemically important global banks. We expect to issue proposals for a risk-based capital surcharge for those banks as well as for a long-term debt requirement to help ensure that these organizations can be resolved. In addition, we are working to advance proposals on margins for noncleared derivatives, consistent with a new global framework, and are evaluating possible measures to address financial stability risks associated with short-term wholesale funding. We will continue to monitor for emerging risks, including watching carefully to see if the regulatory reforms work as intended.

This is the biggest lie of all.

Derivatives are nothing other than a scam intended to get around margin requirements that would otherwise be imposed by the market in the absence of government bailouts and guarantees.  The “financial system” has repeatedly demonstrated that it has both, with the most-outrageous example of same being when Paulson and Bernanke literally corralled Congresspeople into a room and threatened them with economic nuclear winter if they didn’t get a $700 billion blank check.

That “need” came about due to The Fed and Congressional willful blindness toward the outright fraudulent declarations of “adequate” margin supervision and reserves against said positions.  What 2008 laid bare on the table was that these claims were outright lies, that is, public frauds, and yet none were either prosecuted nor were the firms that had made such outrageous and false statements allowed to fail, with only a couple of exceptions.

The fundamental reality is that The Fed believes, despite decades of proof otherwise, that it can successfully “manage” the business cycle and continually pump up asset bubbles without consequence. The problem with such an assertion is that every time The Fed has done this to date throughout history the balloon has found a pin and popped with dramatic consequence, and what’s worse, the severity of those excursions in terms of real-world economic impact has risen with each successive attempt and failure.

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