Vanity Fair Uses Janet Yellen’s Testimony to Bolster Dodd-Frank and Slam Trump
By The Daily Bell - February 15, 2017

THE CHAIR OF THE FEDERAL RESERVE JUST FACT-SHAMED DONALD TRUMP … Janet Yellen reveals the president has no idea what he’s talking about when it comes to Dodd-Frank. Yellen doesn’t have time for this amateur-hour presidency. – Vanity Fair

According to Vanity Fair the “incredible” businessman Donald Trump doesn’t understand much about how the dollar or the larger economy.

He had questions for Mike Flynn about the dollar at three in the morning and over the weekend Economic Council director Gary Cohn needed to tell Trump that administration’s big infrastructure plan was going to be costly.

Janet Yellen has debunked Trump more generally. She did it as part of remarks before Congress dealing with Dodd-Frank, which she said, contary to Trump’s perspective, actually has been part of a lending surge, post 2008.

In fact, it rose 75 percent since 2010, the year Dodd-Frank was passed. This is much different than Trump’s contention that Dodd-Frank had been part of a regulatory surge that depressed growth.

“They’re lending,” Yellen as quoted as saying. “Their price-to-book ratios are substantially higher than the ratio of banks headquartered in other areas, and they’re gaining market share, and they remain quite profitable.”

Yellen also said, reportedly, that, “Lending has expanded overall by the banking system, and also to small businesses.  U.S. banks are generally considered quite strong relative to their counterparts. They’ve built up quite a bit of capital, partly as a result of our insistence that they do so.”

Trump’s perspective is that Dodd Frank had put considerable restraints on those who had tried to borrow post-2010.growing the money they need for their “nice businesses.”

Yellen has been accused by Trump of keeping rates artificially low during the campaign to benefit former president Obama and Hillary Clinton as well. It is one of a series of complaints about the Federal Reserve and its power over the economy.

Dood-Frank itself is not a new issue. It’s been seen as too intrusive for years. It mandates a good deal of extra paperwork for no conceivable purpose. This is one big reason Trump wants to repeal it.

Additionally, it does tend to lower how much businesses can borrow and spend, especially smaller businesses.

Unfortunately, Dodd-Frank is just the tip of the iceberg. The whole fabric of American business at this point is beholden to the Federal government starting with money itself.

Yellen is responsible for the Federal Reserve which runs money on behalf of the federal government. Vanity Fair doesn’t mention that but it should. The Fed, by regulating rates, determines how far and fast the economy will travel. Every part of the larger economy is in a sense beholden to the Fed. Other regulations such as Dodd Frank just add to the control.

If Janet Yellen really wanted to be honest about whether regulations are stifling the economy, she would begin with the Fed itself. She would explain the Fed is involved in a form of price fixing and that regulations themselves are an extension of that.

She would admit that the Fed itself ought to be disbanded and that a broad cross sections of regulations ought to follow.

The Vanity Fair piece is duplicitous when it attempt to justify Dodd-Frank as necessary legislation when it is nothing of the sort. And they use the testimony of the nation’s price-fixer-in-chief to make their case. They think the Fed is a necessary economic component and they think the same when it comes to Dodd-Frank. They ought to study what is really going on before they make broad assertions.

But unfortunately making broad assertions unbacked by knowledge is a good deal more fun than doing the hard work of understanding the shaky American economy.

When the economy finally collapses, as indeed it shall, Vanity Fair, like other glossy, illiterate publications, will find some other unregulated corner to blame it on. That’s how things work.

They continue to have a steady supply of innumerate journalists. That’s one group that our journalism schools add to every year.

Conclusion: Their numbers are growing, along with the number of illiterate remarks by magazines. The supply, unfortunately, is related


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  • autonomous

    Central controllers will never admit their own wrong-headedness. Neither will they submit to any lessening of their hold on control. That is, until they inevitably die, as will we all.

  • Praetor

    Vanity Fair, should stick to women in pretty dresses and how to make cheese cake.

    Yellen lending has surged, lending surge. What an idiot or a$$ tunnel. Ok, we are bankrupt so lets lend more money, that will fix it. When that lent money is in the hands of Wall Street and the Banks, and the people are hungry enough to become cannibals. The Feral bank can claim successes.!!!

    • Bruce C.

      “Yellen lending has surged”

      That’s a perfect point of rebuttal that the Trump team can make: How is an increase in debt an indication of economic growth and PROSPERITY (???)

      If only her answer could be broadcast writ large!

  • Don Duncan

    Yellen must feel pressure, must be worried about critics exposing her. Why else would she speak out against the president? She is wishy-washy, no hero, no straight shooter. She enjoys, like past Fed chairpeople, an aura of royalty. If the MSM were not propagandists, she and the Fed would be exposed as arrogant fools, or liars.

  • Bruce C.

    In case anyone fears that Trump faces an intractable dilemma, here’s “all”he needs to do in what I call a win-win strategy: He needs to start explaining now, in plain language that his supporters can understand (and I’m not just being “cute” here – entrenched economists and other members of the status quo will misunderstand it), that the Fed/central bankers are price fixers (fundamentally of the dollar itself) and that all of the other regulations like Dodd-Frank are causing distortions in the economy “THAT WILL CAUSE A CRASH IF NOT ELIMINATED.” I put that in quotes because that – or something similar – must be the concept that gets out there, before any economic crisis ensues. The Fed/PTB/status-quo must then deal with that. EITHER they change (which is unlikely) or they double-down on “extend-and-pretend” and debt monetization, or the poop finally hits the fan despite their efforts. No matter what, Trump “wins” politically, if not actually.

    The more arguments Trump can have with the Fed and current monetarists the better. But I can assure you that’s not a conversation they want to have because the “status quo” position is all non-intuitive, obtuse, abstract, elitist, inarticulate and indefensible.

    Politically, and strategically, Trump et al should set the parameters of the conversation and not allow journalists and other know-nothings to do so. Make the Fed and the defenders of the current system (try) to defend themselves and their policies. Force them to reveal the kind of machinations and duplicity that they must engage in to make their policies “work.”

    Make them explain why, for example, there should be a 2% per year increase in consumer prices. WHY price deflation that advances in productivity and technology naturally deliver are “bad” and therefore opposed. Ask them to explain why both Japan and the EU – not to mention the US Fed itself (under Bernanke) – have been unable to do so after years of unprecedented central bank efforts. Have them explain why NOW they are so confident they can do it, and how do they propose to do it.

    There are almost no limitations to the ways to challenge the current system. And the sooner that is done, and the CB “community” forced to tip their collective hands, the better in terms of how things will go AFTER the denouement.