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White House Getting Ready to Throw Yellen Under the Bus. It’s About Time.

President Harry Truman once said, “If you want a friend in Washington, get a dog.” My corollary to that is, “Better yet, get out of town.”

Relationships in Washington are highly transactional. If someone can do you a favor, you’ll want to ingratiate yourself with that person. If someone is caught up in a controversy or scandal, you’ll distance yourself as quickly as possible. That’s just the way it is.

This is especially true if a U.S. Senator is involved. At least a member of the House will have close relationships back in the home district. A senator represents an entire state and may not even be of the same party as the governor of that state.

Senators are easy to work with as long as the campaign contributions are flowing. If you’re a critic or adversary, watch out; they’ll cut you off at the knees. If you’re on the wrong side of a senator, they’ll be quick with a derogatory comment or some kind of shot at your reputation, deserved or not. (That said, a senator can be extremely loyal to former staff members. Even that has a transactional basis because staff knows where the bodies are buried).

Usually, a president will rise above some of the petty insults of a senator because of the importance of the office. Unfortunately, Joe Biden presents us with the worst of both worlds. He has the importance of a president but has the mean streak and insulting character of a senator. Perhaps that is not surprising.

Biden was a senator for 36 years and vice president for 8 years before becoming president. By the time he became president, his cognitive powers were in steep decline. In some ways, he thinks he’s still a senator and behaves accordingly right down to the mean streak.

Unfortunately for Janet Yellen, Biden has now turned his self-interest and lack of loyalty in her direction, as reported in this article.

To be clear, Yellen has always been incompetent both as Fed Chair and now as U.S. Treasury Secretary. She’s a not-very-good labor economist and statistics geek and not much more. Her rise to power is a case of affirmative action run amok. Her role as the “first woman Fed Chair,” and “first woman Treasury Secretary” placed emphasis on the “woman” part of the equation and no emphasis at all on competence or technical skill in monetary or fiscal policy (she has none. She’s a textbook neo-Keynesian, which is almost the definition of an incompetent economist).

Now her free ride is over. The Silicon Valley Bank fiasco including the subsequent shutdowns of Signature Bank, the panic at First Republic Bank, and her bungling of the definition of insured v. uninsured deposits have left the banking system in shreds. That comes on top of her failure at implementing financial sanctions on Russia, her blindness to warning signs at FTX, and the worst inflation in 40 years.

Her time is up, and Biden is getting ready to throw her under the bus. Her likely replacement is Lael Brainard, who recently moved from the Fed to the White House as an audition for the Treasury job.

Bye-bye, Janet. Biden will stab her in the back. As Truman said, “Get a dog.”

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