Treasury Turkey
Yellen’s laughable Bidenomics in Beijing
IMAGINE your family finds your cooking so revolting, they refuse to eat it — and in response you decide it’s time to take a plate over to your neighbor’s house. This is precisely what the Biden administration is doing with its economic platform.
It’s no secret Americans are sick of Bidenomics. A recent Economist/ YouGov survey showed 29% of voters are worried more about the economy and inflation than any other issue. Only 22% of black Americans, 13% of Hispanics and 18% of young adults — all key would-be Biden voters — think they are better off financially than they were a year ago.
The verdict is in: Voters do not like what Joe is cooking. Rather than reflect on these numbers, Treasury Secretary Janet Yellen found herself in China this week offering a round of slops to the locals.
Although China rolled out the red carpet for Yellen in Beijing and Guangzhou, both the Chinese and the Americans ultimately saw her visit as a failure.
Looking under the hood, it’s not hard to see why. No matter what you think about China’s trade strategies, it is obvious they are proving very successful for the Chinese. European car manufacturers are terrified of a tsunami of cheap, newly highquality Chinese electric vehicles about to wash over their shores.
America seems to feel the same way about Chinese EVs, having already imposed a 27.5% tariff on them. Yet despite Western aversion to these products, they are flooding the rest of the global market. In 2022, China itself accounted for 60% of EV purchases and provided 35% of global EV exports — up from 4.2% in 2018.
Despite negative headlines throughout 2023, the Chinese beat their growth target of 5% for the year. In contrast to many Western countries, they achieved this economic growth with very low inflation.
Inflation at the end of 2023 was 3.4% in both America and Europe — in China, inflation for the year came in at -0.3%.
Considering these numbers, most people would see Yellen heading over to the Middle Kingdom to give economic advice as a hard sell. But Yellen was undeterred.
She informed the Chinese their trade practices are too aggressive and their products too cheap. While this may be true, the alternative advice she gave them was a stretch too far: Yellen said they should embrace Bidenomics.
America’s treasury secretary told the Chinese Communists they should focus less on their competitiveness and engage in more government expenditure to generate economic growth. News reports suggest Yellen even tried to sell the Chinese on stimulus checks — or “stimmies,” as they came to be known during the pandemic.
This is very strange advice, as the Biden “stimmie” program is now widely thought to be the first in a series of policy blunders that led to the outburst of inflation that’s made the president so unpopular. Put yourself in the shoes of the Chinese here: Yellen’s Treasury has created a cost-of-living crisis in America, and now she wants to Chinese to sign on to her funny-money program.
It was only a decade ago that the so-called Washington Consensus encouraged other countries to embrace free-market economics and improve their competitiveness. Now Yellen and the gang are traveling the world trying to sell the economic equivalent of magic beans.
No doubt there are problems with China flooding Western markets with its cheap goods. The question of how to address this is a large one, but surely the answer involves trying to recreate competitive industries in Western countries.
These countries, emerging from painful inflation, have had more than enough doses of Dr. Yellen’s Magic Money Juice. Trying to peddle the same snake oil on the world stage is, frankly, an embarrassment to the United States, which used to pride itself on sound economic management.
Washington has decided firmly, on a bipartisan basis, that it no longer wants to rely on China for cheap imports. Policymakers are now laser-focused on trying to bring jobs back to American shores. This is a laudable goal, but there are better and worse ways of doing it.
Creating a carnivalesque roadshow in which the US treasury secretary travels the world promoting the same harebrained economic policies that have led to so much economic pain for the average American is not a good way to go about this.
If the Chinese had signed on for regular doses of Yellen’s snake oil, it might hobble their economy and give America the edge on the world stage. But it’s safe to predict the Chinese will “just say no” to importing Bidenomics into Beijing.