Treasury Secretary Janet Yellen listens to President Joe Biden as he comments on the national economy and the need for $ 1.9 trillion in legislation proposed by his administration to save the coronavirus in the White House state living room on Feb. 5. 2021, Washington, DC.
Stefani Reynolds | Getty Images
After four years of a categorical protectionist agenda, Treasury Secretary Janet Yellen is here to tell you that things are about to change in a major way.
On Monday, the official in charge of the economic agenda of President Joe Biden established a bold set of principles that differ from the priorities of the previous administration by about as much as we could imagine.
Former President Donald Trump’s noise against China has disappeared. Instead, it is a policy that “will be competitive where it should be, collaborative where it can be,” but only “contradictory where it should be.”
Where Trump and his Treasury leader Steven Mnuchin used their pulpit not only to choose to fight traditional adversaries such as China, but also for traditional allies such as Germany, Yellen objected: “America must not mean never America alone. ”
And while the past administration has generally paid little attention to issues such as diversity and climate change, Yellen said both are not only on the US social agenda, but also on the economic agenda.
Drawing a line between past and present, Yellen said in a speech to the Chicago Council for Global Affairs that “the most important difference today is a fundamental recognition that our policies at home and abroad must be designed to to be inclusive, to fight inequality and to respect our environment. “
Global discourse for a global audience
Fierce rhetoric, however, was not an ordinary political discourse.
Instead, it serves primarily to raise the curtains for this week’s spring meeting of the World Bank / International Monetary Fund.
The message: that globalization and the role perceived by the US as the center of the mission are back in vogue.
“In the last four years, we’ve seen for ourselves what happens when America moves away from the global scene,” Yellen said. “America must never mean America alone. For in today’s world, no single country can adequately ensure a strong and sustainable economy for its people.”
These were not the only harsh words Yellen had for the previous administration.
Without naming Trump, she criticized the slow response to the Covid-19 pandemic, saying the White House “failed to commit early to address the crisis beyond our borders,” which Yellen said has worsened the issue. economic. She stressed the importance of stopping the virus not only at home but also in other nations.
However, before the pandemic arrived, the economy was doing well under the protectionist Trump, who often used the term “globalists” contemptuously against some of his administration’s officials.
Unemployment was at a minimum of 50 years, inflation was under control, and the administration, despite its repeated alienation of allies around the world, managed to negotiate a new trade agreement with Canada and Mexico and redraw agreements elsewhere.
Leading economic officials, including Federal Reserve Chairman Jerome Powell, have complained that the wealth gap closed significantly before the pandemic and has now widened again, largely as a result of economic restrictions imposed to fight the virus.
Despite criticism from the political left about its way of managing global trade and the large-scale tariffs implemented, Biden has indicated little change in this approach. Most of Trump’s tariffs have been left in place.
In addition, the Trump years have consistently outperformed the economic gains, not to mention a strong stock market.
For Yellen, however, the message was more than numbers.
“A more inclusive global economy”
She spoke about the importance of bringing displaced women back into the labor market and stressed the importance of providing assistance to minorities who were also disproportionately affected during the pandemic. Climate change, she said, is “the biggest long-term threat facing the world.”
In general, she said the aim of the administration is “to fight poverty and promote a more inclusive global economy that aligns with our values.”
From a primary perspective, the two major proposals have led the G-20 nations to reach an agreement on a minimum global corporate tax and another goal, announced last week, of approving $ 650 billion in special drawing rights. which will provide US dollars to IMF members.
Both moves could have a distinct global focus that the Trump administration largely avoided, other than an effort to bring profits home that were hidden abroad.
Despite likely criticism that the Biden administration’s international focus could threaten the US at home, Yellen’s speech sends a clear message that America’s days are over for the time being.
“While embracing trade as an engine for growth, we have neglected those who have not benefited. And in the most recent period, when we could have adopted domestic policies to deal with these issues and joined allies to address issues abroad, we have isolated ourselves and withdrawn from the international order we have created, “Yellen said.
“We can do better,” she added, referring to inequality. – We need to do better.