“Ah, but Trump!”: in the US, government economists also speak of the legacy they have received

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This was said by the former minister of economic portfolio of Raúl Alfonsín, Juan Sourrouille “in Economics there is no inventory advantage”. The rucksack that you carry until the end of an officer’s journey it is accepted to wear, and no one will acknowledge the effort whether or not it is their turn to correct an ancestor’s mess.

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In another way, something similar was expressed by the former US Secretary of State, Henry Kissinger, when he said this “Problems inherited by a government, if it hasn’t solved them within a year, are its problems”. To take charge.

In this sense, the words of Yanet Yellen, the secretary of the Treasury, are equivalent to the position of US economy minister, surprised this week, who launched criticisms against his predecessors during the government of Donald Trump. It was the day after the meeting between Alberto Fernández and Joe Biden in the Oval Office last Wednesday.

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“When the President and I took office in January 2021, we inherited a financial stability apparatus in the Treasury that had been decimated – Yellen began in a conference last Thursday -, I entered and found a team on the Monitoring Board for the Financial Stability (NE: FSOC, a government agency) which was less than a third the size it was five years earlier. In 2016, FSOC’s policy, analysis and operations teams were full. By 2021, the analytics team had been phased out. This team, working with financial regulators, was tasked with helping monitor systemic risk. This meant that we entered the pandemic crisis without the staff we needed to monitor the health risks of the financial system”.

Yellen’s words take place in a context of financial crisis. Weeks ago, the US experienced a run on two regional banks, Silicon Valley Bank and another entity called Signature, when they simultaneously faced a massive run on their deposits and the US government was forced to announce the same weekend which not only upheld the US$250,000 guarantee limit for sight accounts already set in advance, but has now also extended it for deposits above that amount. Washington has provided 100% coverage to savers and large depositors.

The measure has been strongly criticized by Republicans and conservative economists who, without distinguishing between customers and bank owners, directly oppose the bailout of institutions as a whole, as happened in the Lehman Brothers crisis in 2008-2009.

Yellen thus turned to the National Association for Business Economics, which presented her with an award in memory of former Federal Reserve chairman Paul Volcker. Side note: Prior to being named Treasury Secretary, Yellen held various roles at the Federal Reserve, including her presidency during the Barack Obama administration. The economist recalled that, like her, Volcker had served in both agencies, the Monetary Authority and the Treasury. As Under Secretary of the Treasury for Monetary Affairs from 1969 to 1974, Volcker led the way as the dollar devalued, the Bretton Woods currency system collapsed, and the world moved from fixed to floating exchange rates. Kissinger was there.

“Over the past two years, we have doubled the size of our FSOC staff”Yellen closed, further differentiating herself from Trump.

Yellen was head of the Federal Reserve when the former president, indicted on Thursday for a sex crime, entered the White House and instead of renewing his post, he decided to replace her with the current Fed head, Jay Powell.

“He doesn’t understand anything about economics” said the economist a few years ago about Trump in an interview on NPR. “I doubt I would be able to say that the bank’s goals of full employment and price stability are goals assigned to the Fed by Congress.”. He cited as an example statements he had made about having a super dollar, a claim that earned him criticism for trying to manipulate the exchange rate, which is punishable in developed markets. In Fear, the book about Trump by Pulitzer Prize winner and former Washington Post columnist Bob Woodward, portrays a president who thought he knew more about the economy than the economists next to him.

Bidentoday challenged by inflation —since he took office the average salary has decreased in real terms—, seems to ignore Kissinger’s rule, according to whom, the problems with the economy are his concern and not that of his predecessor since he spent more than a year in office. In Argentina, on the other hand, it has been happening for some time. Kirchnerism makes critical reference to the initial conditions received by the government of Mauricio Macri to justify his decisions. And those of Together for Change respond ironically with ‘Ah, but Macri’.

The… ah but Trump is coming to the US!?

Source: Clarin

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