By FATIMA HUSSEIN and JOSH BOAK (Associated Press)
WASHINGTON (AP) — Treasury Secretary Janet Yellen is arguing that a fractured democracy can have destructive effects on the economy — an indirect jab at Donald Trump.
Yellen, in an address prepared for delivery Friday in Arizona, uses 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 mentions Trump, the presumptive Republican presidential nominee, by name in her speech for the McCain Institute’s Sedona Forum, but she hints 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 acknowledges that democracy “doesn’t seem like typical terrain for a treasury secretary,” but she adds that “democracy is critical to building and sustaining a strong economy.” A copy of her speech was released in advance by her office.
“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 says. “Undercutting democracy undercuts a foundation of sustainable and inclusive growth.” She points to a study suggesting that democratization increases gross domestic product per capita by around 20% in the long run.
Yellen cites 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…
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