Janet Yellen

Cardi B, the well-known rapper and mixologist, has finally acknowledged the financial reality facing many Americans today. Last week, she tweeted, “When y’all think they going to announce that we going into a recession?” Cockburn notes that such astute words perfectly capture how the Biden administration has raised costs for everyone, from the working class to those who can afford to live in this economy, also known as millionaires. Thankfully, the administration responded to her concerns. Janet Yellen, the secretary of the treasury, replied, “Don’t look to me to announce it. I’m not going to announce it. I don’t think we’re going to have a recession. I expect growth to slow down. We have a very strong economy.

All is not well with the economy. It’s true that 390,000 jobs were added last month, exceeding estimates, while hourly income is up 5.2 percent since May 2021. However, analysts guessed unemployment would drop a tenth of a percent, which didn’t happen. Gas prices keep rising, as GasBuddy.com reports a 43 cent jump over this time last month. It’s enough of a problem that OPEC has agreed to increase production in July and August. The economy remains stricken by inflation, with Treasury Secretary Janet Yellen issuing a mea maxima culpa earlier this week. “I think I was wrong then about the path that inflation would take," she told CNN on Tuesday.

Federal Reserve Chairman Jerome Powell looked calm when he testified before the Senate Banking Committee in February 2021. He’d just been asked by the folksy Louisiana senator John Kennedy whether he had concerns about the dollar supply being the highest it had been since 1946. “Right now, I would say the growth of M2, which is quite substantial, doesn't really have important implications for the economic outlook,” Powell stated. “M2 was removed some years ago from the standard list of leading indicators, and just that classic relationship between monetary aggregates and economic growth in the size of the economy, it just no longer holds. We've had big growth of monetary aggregates at various times without inflation, so something we have to unlearn, I guess.

Tucked away in the reconciliation bill now bogged down in Congress is a requirement that banks report the annual deposits and withdrawals from every bank account that has activity of more than $600 a year. It would not list individual transactions, just the total money flow in and out. Ostensibly, this is to catch rich people who have been under reporting income. Secretary of the Treasury Janet Yellen gave as an example: “High-income individuals with opaque sources of income that are not reported to the IRS, there's a lot of tax fraud and cheating that's going on.” Wages, salaries and fees are already reported to the IRS through W-2 forms. So is investment income. That sort of income is what a large majority of American families depend on.

Donald Trump wasn’t a man for international agreements. Just imagine for a moment, though, that it was him rather than Joe Biden who had just persuaded the G7 to back a minimum global corporation tax rate. Would it be hailed as a great breakthrough for fairness, a sideswipe against amoral global corporations?  Like hell it would. On the contrary, the same deal pulled off by Trump would have been attacked as a charter for the big tax avoiders to carry on as they are — as well as a bullying attempt by the US to divert more tax revenues to its own shores at the expense of smaller countries with competitive tax rates. There are two elements to the agreement reached over the weekend. The first is the proposed minimum tax rate of 15 percent.

Multilateralism was supposed to be the great theme of the Biden presidency. No longer would the US plow its lonely furrow. Instead it would engage with the rest of the world on matters of mutual interest. Where, though, does that fit with the attempt by treasury secretary Janet Yellen today to try to set a minimum level of corporate income tax for the whole world to whole world to observe? The US is no longer withdrawing from international agreements, as it did in Trump’s day — it is doing something far more objectionable, by trying to lay down American rules for the rest of the world to follow.