Please ensure Javascript is enabled for purposes of website accessibility

Prime Minister of Yemen’s Houthi Government Killed in Israeli Strike

2 days ago

Texas Gov. Greg Abbott Signs Law Redrawing Congressional Maps

2 days ago

US Air Force will Offer Military Funeral Honors to Slain Capitol Rioter

3 days ago

US Republican Senator Joni Ernst Will Not Run for Re-Election, CBS News Reports

3 days ago

Wall Street Falls as Dell, Nvidia Drive Tech Losses

3 days ago

US Denies Visas to Palestinian Officials Ahead of UN General Assembly

3 days ago

Minneapolis Children Revealed Courage, Absorbed Fear During Church Shooting

3 days ago

Ford Recalls Nearly 500,000 Vehicles Over Brake Fluid Leak

4 days ago

Fresno-Bound Passenger Says Delta Attendant Slapped Him, Seeks $20M

4 days ago
Yellen Says Threats to Democracy Risk US Economic Growth, an Indirect Jab at Trump
gvw_ap_news
By Associated Press
Published 1 year ago on
May 4, 2024

Treasury Secretary Janet Yellen warns of the economic risks posed by threats to democracy, indirectly criticizing former President Donald Trump's approach. (AP/Mariam Zuhaib)

Share

Getting your Trinity Audio player ready...

WASHINGTON — Treasury Secretary Janet Yellen argues that a fractured democracy can have destructive effects on the economy — an indirect jab at Donald Trump.

Yellen’s Address in Arizona

Yellen delivered an address Friday in Arizona, using economic data to paint a picture of how disregard for America’s democratic processes and institutions can cause economic stagnation for decades.

Yellen, taking a rare step toward to the political arena, never mentioned Trump, the presumptive Republican presidential nominee, by name in her speech for the McCain Institute’s Sedona Forum, but she hinted at the former president’s potential impact if he regains the White House.

Her remarks serve as a sort of warning for business leaders who may overlook Trump’s disregard for modern democratic norms because they prefer the former president’s vision of achieving growth by slashing taxes and stripping away regulations.

Yellen acknowledged that democracy “doesn’t seem like typical terrain for a treasury secretary,” but she added that “democracy is critical to building and sustaining a strong economy.”

“The argument made by authoritarians and their defenders that chipping away at democracy is a fair or even necessary trade for economic gains is deeply flawed,” she said. “Undercutting democracy undercuts a foundation of sustainable and inclusive growth.” She pointed to a study suggesting that democratization increases gross domestic product per capita by around 20% in the long run.

Yellen’s Remarks on Democracy and Economy

Yellen cited the insurrection on Jan. 6, 2021, as a day when democracy came under threat as “rioters, spurred on by a lie, stormed the Capitol.” Trump, who made false claims that the 2020 election was stolen from him, has been charged with conspiring to overturn the election, among four criminal cases he is facing. He denies any wrongdoing.

And though Yellen didn’t specifically cite Trump’s comments, he again undermined the tradition of a peaceful transfer of power this week when he refused to commit to accepting this year’s presidential results in an interview with the Milwaukee Journal-Sentinel.

Farther from home, Yellen cited other global threats to democracy such as Russia’s invasion of Ukraine.

Trump and those associated with him say they want to centralize the government’s powers within the Oval Office, such that he might subject people or companies that cross him to investigations, lawsuits and other penalties. That approach could undermine the rule of law that has enabled America’s market-based economy to thrive.

In her speech, Yellen pointed to China as a cautionary example and warned that its future growth is “far from certain.” She said the absence of some democratic pillars will “continue to pose challenges as China navigates the transition to an advanced economy.”

Speculations on Trump’s Influence on Federal Reserve

Yellen’s speech comes when there is speculation that if Trump regains the White House he may put political pressure on the Federal Reserve to lower its benchmark interest rate, which stands at a two-decade high of roughly 5.3%. Fed Chair Jerome Powell this week said gaining confidence to lower rates “will take longer than previously expected.”

“As chair of the Federal Reserve, I insisted on the Fed’s independence and transparency because I believe it matters for financial stability and economic growth,” Yellen said in her speech. “Recent research has been consistent with my belief: It has shown that greater central bank independence is associated with greater price stability, which contributes significantly to long-term growth.”

A representative from the Trump campaign did not respond to an Associated Press request for comment.

Challenges to Economic Growth and Liberty

Other leading economists and academics are challenging the right’s claims to the mantles of economic growth and liberty.

The Nobel Prize-winning economist Joseph Stiglitz, a friend of Yellen’s, last month published a book entitled “The Road to Freedom.” Stiglitz, in an interview, said Trump has preyed on people’s economic insecurities after decades of inequality and the erosion of the middle class.

“The economic state is what creates the fertile field for these demagogues,” Stiglitz said. “If they were feeling their incomes were going up rather than down, I don’t think they would find Trump attractive.”

In a paper released this week, Vanessa Williamson, a senior fellow at the Urban-Brookings Tax Policy Center, said that businesses should be more concerned about the rule of law and democratic values.

She argued that there need to be stronger nonpartisan business associations and that CEOs and executives need to be fully aware of how a move away from democracy could hurt their bottom lines.

There is “indisputable evidence of the economic costs of democratic decline,” she said. “These costs include stagnation, policy instability, cronyism, brain drain, and violence.”

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Fresno County Garnet Fire Grows to 18,748 Acres in Sierra National Forest

DON'T MISS

US Judge Blocks Deportations of Unaccompanied Migrant Children to Guatemala

DON'T MISS

Israel Pounds Gaza City Suburbs, Netanyahu to Convene Security Cabinet

DON'T MISS

Thousands in Australia March Against Immigration, Government Condemns Rally

DON'T MISS

Trump Says He Will Order Voter ID Requirement for Every Vote

DON'T MISS

Greta Thunberg Joins Flotilla Heading for Gaza With Aid

DON'T MISS

Chicago Mayor Says Police Will Not Aid Federal Troops or Agents

DON'T MISS

Post-War Gaza Plan Sees Relocation of Population, ‘Digital Token’ for Palestinian Land: Washington Post

DON'T MISS

Labor Day Quiz: Do You Know What a Knocker-Upper Is?

DON'T MISS

Bulldogs Check All the Boxes in Runaway Win Over Georgia Southern

UP NEXT

US Judge Blocks Deportations of Unaccompanied Migrant Children to Guatemala

UP NEXT

Israel Pounds Gaza City Suburbs, Netanyahu to Convene Security Cabinet

UP NEXT

Thousands in Australia March Against Immigration, Government Condemns Rally

UP NEXT

Trump Says He Will Order Voter ID Requirement for Every Vote

UP NEXT

Greta Thunberg Joins Flotilla Heading for Gaza With Aid

UP NEXT

Chicago Mayor Says Police Will Not Aid Federal Troops or Agents

UP NEXT

Post-War Gaza Plan Sees Relocation of Population, ‘Digital Token’ for Palestinian Land: Washington Post

UP NEXT

Labor Day Quiz: Do You Know What a Knocker-Upper Is?

UP NEXT

Bulldogs Check All the Boxes in Runaway Win Over Georgia Southern

UP NEXT

Judge Blocks Pillar of Trump’s Mass Deportation Campaign

Thousands in Australia March Against Immigration, Government Condemns Rally

16 hours ago

Trump Says He Will Order Voter ID Requirement for Every Vote

16 hours ago

Greta Thunberg Joins Flotilla Heading for Gaza With Aid

16 hours ago

Chicago Mayor Says Police Will Not Aid Federal Troops or Agents

16 hours ago

Post-War Gaza Plan Sees Relocation of Population, ‘Digital Token’ for Palestinian Land: Washington Post

16 hours ago

Labor Day Quiz: Do You Know What a Knocker-Upper Is?

16 hours ago

Bulldogs Check All the Boxes in Runaway Win Over Georgia Southern

1 day ago

Judge Blocks Pillar of Trump’s Mass Deportation Campaign

2 days ago

Classic Cars Will Still Need a Smog Test in California After Lawmakers Reject Jay Leno Bill

2 days ago

Visalia Driver Arrested for DUI After Multiple Crashes and Pedestrian Injured

2 days ago

Fresno County Garnet Fire Grows to 18,748 Acres in Sierra National Forest

A lightning-sparked wildfire, the Garnet Fire, in the Sierra National Forest has burned 18,748 acres in Fresno County and remains at 8% cont...

15 hours ago

Photo: USDA - Forest Service Tanker 40 at Fresno Air Attack Base. The Fresno County Garnet Fire in the Sierra National Forest has burned 18,748 acres and is 8% contained as crews make progress on containment lines while bracing for possible thunderstorms early this week. (Sam Wu/USFS)
15 hours ago

Fresno County Garnet Fire Grows to 18,748 Acres in Sierra National Forest

U.S. flag and Judge gavel are seen in this illustration taken, August 6, 2024. (Reuters File)
16 hours ago

US Judge Blocks Deportations of Unaccompanied Migrant Children to Guatemala

Smoke rises from Gaza after an explosion, as seen from the Israeli side of the border, August 31, 2025. (Reuters/Amir Cohen)
16 hours ago

Israel Pounds Gaza City Suburbs, Netanyahu to Convene Security Cabinet

Demonstrators hold a banner during the 'March for Australia' anti-immigration rally, in Sydney, Australia, August 31, 2025. REUTERS/Hollie Adams
16 hours ago

Thousands in Australia March Against Immigration, Government Condemns Rally

President Donald Trump walks on the grounds of the Trump National Golf Club in Sterling, Virginia, U.S., August 30, 2025. (Reuters/Nathan Howard)
16 hours ago

Trump Says He Will Order Voter ID Requirement for Every Vote

Activists Yasemin Acar, Greta Thunberg and Thiago Avila attend a press conference before the departure of the Global Sumud Flotilla, a humanitarian expedition to Gaza, at the port of Barcelona, Spain August 31, 2025. (Reuters/Eva Manez)
16 hours ago

Greta Thunberg Joins Flotilla Heading for Gaza With Aid

National Guard troops wear gas masks during protests against federal immigration sweeps, in Los Angeles, California, U.S., June 12, 2025. (Reuters File)
16 hours ago

Chicago Mayor Says Police Will Not Aid Federal Troops or Agents

A view of tents sheltering Palestinians displaced by the Israeli military offensive, in Gaza City, August 23, 2025. (Reuters File)
16 hours ago

Post-War Gaza Plan Sees Relocation of Population, ‘Digital Token’ for Palestinian Land: Washington Post

Search

Help continue the work that gets you the news that matters most.

Send this to a friend