Janet Yellen Sides With the United Nations

On whose side is Treasury Secretary Yellen — America’s or the United Nations’? We ask because the tribune of fiat money piped up against the anti-inflation campaign of her own country’s central bank, a bank she formerly chaired. She warned of “international spillovers” that could harm other countries. Her remarks followed the UN’s call for central banks like the Fed to “change course” in their drive to control prices.Whatever happened to telling the UN to mind its own business? It isn’t only the UN, of course. The Saudi Energy minister has started griping about interest hikes, even as the Saudis vow to slash oil production along with Russia. The UN balks that “rising borrowing costs” will “trigger a cascade of bankruptcies” in the poorer nations. Ms. Yellen lamented how these countries “are often most acutely affected” by “policies of advanced countries.”The Treasury secretary, echoing the UN’s plaints about rising interest rates making debts more costly for the developing world, agreed that “some countries will need considerable debt relief.” Ms. Yellen’s eagerness to parrot the UN line on these economic questions is shocking. The world body prefers to tackle inflation via “direct price and markup controls,” though conceding that these might be found “politically unacceptable.”The UN expresses the fear that, “if monetary authorities are unable to stabilize inflation quickly,” governments might have to “resort to additional fiscal tightening.” In other words, heaven forbid the governments of the West should deign to tackle their bloated budgets in the interest of curbing runaway spending — and prices. That, the UN contends, “would only help precipitate a sharper global recession.”This “advice” from the UN to America and the other developed economies is on a par with the International Monetary Fund’s recent meddling in the United Kingdom. That was after Prime Minister Truss proposed a pro-growth supply-side tax cut. “We do not recommend large and untargeted fiscal packages at this juncture,” the IMF announced, explaining its concern that “the nature of the UK measures will likely increase inequality.”The IMF’s astonishing interference in Britain’s politics rocked the markets and emboldened Ms. Truss’ opponents on the left, forcing her to drop the plan, for now. No wonder the UN might try a similar move of its own as America’s central bank weighs how fast, or high, to raise interest rates to curb inflation without unduly hurting employment or exacerbating what could be adjudged a recession induced by President Biden.So what is Ms. Yellen thinking, making common cause with the UN at such a fraught moment? We don’t mean to question her patriotism. Yet her predecessor at Treasury, Lawrence Summers, understands that the Fed needs to stay the course on interest rates, even at the cost of short-term higher unemployment. “The question,” he says, “is what policy path would minimize the total amount of unemployment distress over time.”We understand there are a lot of leftist economists. One, a former economist at the Fed, Claudia Sahm, is calling via Twitter to let inflation slide in the interests of, uh, “humanity.” She reckons that the “Fed’s credibility is not more important than humanity” and frets that “the US is largely ignoring the global economic and geopolitical situation.” It’s not surprising to see the Left put other countries ahead of America — just startling to see Ms. Yellen follow suit.

Janet Yellen Sides With the United Nations

Janet Yellen Sides With the United Nations

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