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Former Fed Chair Janet Yellen Faces Tough Challenges as Biden’s Treasury Secretary

By turning to Janet Yellen to become the next secretary of the Treasury, President-elect Joe Biden is betting that her gravitas as the former head of the nation’s central bank and her past political experience as chair of the Council of Economic Advisers will serve her well as the U.S. economy struggles to come back from a deep pandemic-driven recession. 

Yellen’s prospective elevation to the office first occupied by Alexander Hamilton would make her the first woman to hold the job of the nation’s leading economic policy maker in 231 years. Her anticipated choice as Treasury secretary was first reported by The Wall Street Journal. 

In an administration that will include the first woman ever to serve as vice president, in Kamala Harris, Yellen joins other women Biden is appointing to senior positions. So far, he has tapped career intelligence official Avril Haines as the next director of national intelligence and State Department veteran Linda Thomas-Greenfield as U.S. ambassador to the United Nations.  

Linda Thomas-Greenfield, U.S. President-elect Joe Biden's choice to become the next U.S. ambassador to the United Nations.Linda Thomas-Greenfield, U.S. President-elect Joe Biden's choice to become the next U.S. ambassador to the United Nations.
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If confirmed, Yellen, 74, the Federal Reserve chair from 2014 to 2018 and a prominent labor economist,  would be plunged immediately into efforts to avert further damage to the economy as the coronavirus pandemic roars to new heights across the country and lawmakers remain sharply divided about the shape of an additional economic stimulus package.  

She will also face a tough challenge in attempting to negotiate a new package of economic relief after months of stalemate between the Trump administration, Senate Republican leaders and Democratic House Speaker Nancy Pelosi.   

In the past, Yellen has defended massive government stimulus programs, including a $3 trillion effort by the Federal Reserve to help extricate the U.S. economy from the mire of the Great Recession stemming from the 2008 financial crisis. Her philosophy would appear to align with that of the president-elect, who has advocated a sweeping set of policies to ease the economic burden on individuals and promised to “spend whatever it takes” to prevent small businesses from being forced into bankruptcy. 

FILE – Treasury Secretary Steven Mnuchin testifies on Capitol Hill in Washington, Sept. 1, 2020.

Yellen’s ascension to Treasury secretary would also go some way toward repairing an increasingly fraught relationship between that department and the Federal Reserve. In just the past week, current Treasury Secretary Steven Mnuchin moved to end an emergency lending program administered by the Fed but funded by Treasury, over the express objections of Fed Chair Jerome Powell. 

Yellen’s nomination would have to clear a Republican-led Senate unless the Democrats manage to regain control of the Senate by winning two Senate seats in Georgia’s upcoming special election. Senate Finance Committee chairman Charles Grassley, an Iowa Republican, voted to filibuster her confirmation as Fed Chair in December 2013 and also voted against her nomination when it came to the Senate floor the following month. 

The ranking Democrat on the Financial Committee, Oregon Senator Ron Wyden, made a statement of support for Yellen on Monday.  

Decades of experience

Widely respected on both the national and international stage, Yellen has been a key figure in economic policy circles for decades. She served as a member of the Federal Reserve Board of Governors from 1994 to 1997, under the chairmanship of Alan Greenspan, before joining the Clinton administration. During her stint in the White House, Yellen served as the chair of the Economic Policy Committee of the Organization for Economic Cooperation and Development. 

Yellen returned to the monetary policy world in 2004, serving as president and CEO of the Federal Reserve Bank of San Francisco until 2010, when she was named vice chair of the Federal Reserve. She was nominated by President Barack Obama and confirmed as chair of the Fed in January 2014 and ran it until February 2018. 

FILE – President Barack Obama applauds as Janet Yellen speaks after the president announced he is nominating her to be chair of the Federal Reserve, at the White House in Washington, Oct. 9, 2013.

Yellen’s years at the helm of the Fed were marked by a balancing act between competing priorities. She took over six years into a massive stimulus program that had been put in place to pull the U.S. economy back from the ravages of the Great Recession. The Fed had held interest rates at near zero since the end of 2008, and had injected trillions of dollars into the U.S. economy by purchasing Treasury and mortgage-backed securities. 

Under Yellen, the Fed began slowly raising interest rates in December of 2015, and took steps to gradually sell off the securities it had purchased as part of the stimulus program. Yellen’s efforts to roll back the stimulus were too slow for many critics, who warned that her focus on tightening the labor market would fuel disastrous inflation, a position supported by some traditional economic analysts.  

The inflation never materialized, and Yellen left her Fed position in 2018 with unemployment at 4.1%, near a 20-year low, and still declining. 

Yellen’s tenure at the Fed, and her economic and monetary policy work in general, have been marked by a focus on the real-world effects of government policies and their impact on individual citizens.  

Praise for Yellen

David Wessel, a former economics reporter for the Wall Street Journal, has known Yellen for years, in both his capacity as a journalist and in his current role as the executive director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, where Yellen is a distinguished fellow in residence. 

“I covered Janet Yellen when I was at The Wall Street Journal and have worked with her for the past couple of years at the Hutchins Center,” Wessel said. “In addition to her obvious qualifications and years of experience, she has enormous empathy for ordinary Americans and has never lost sight of the true goal of economic policy – not to boost stock prices or fatten bank balance sheets or make some numbers on a spreadsheet add up, but to improve the lives of regular people, the ones whose names never show up in the newspaper or on TV. 

“In addition,” he said, “she is unfailingly the most prepared person in the room.  She demonstrated that as a governor of the Federal Reserve in the Greenspan era and every day since.” 

Raised in New York City, in the borough of Brooklyn, Yellen graduated as valedictorian of her public high school, and went on to earn a bachelor’s degree from Brown University and a Ph.D. in economics from Yale. In addition to her public service, she has taught economics at Harvard, the University of California at Berkeley, and the London School of Economics. 

Yellen is married to George Akerlof, a Nobel Prize-winning economist and professor at Georgetown University. 
 

Russian Influence Peddlers Carving Out New Audiences on Fringes

After four years of warnings and preparations, the 2020 presidential election did not see a repeat of 2016, when intelligence officials concluded Russia meddled using a combination of cyberattacks and influence operations.  
 
But according to current and former U.S. intelligence officials, as well as analysts, the good news ends there.   
 
The Russians, they warn, have been busy laying the foundation for future success.
 
Instead of relying on troll farms and fake social media accounts to try to sway the thoughts and opinions of American voters, they warn the Kremlin’s influence peddlers have instead gained a new foothold, establishing themselves as part of the United States’s news and social media ecosystem, ingratiating themselves to U.S. audiences on the far right and the far left.
 
“A lot of these campaigns are getting engagement in the millions,” Evanna Hu, chief executive officer of Omelas, told VOA. “They are pretty good at inducing the type of sentiment, a negative sentiment or a positive sentiment in the audience, from their posts.”
 
Omelas, a Washington-based firm that tracks online extremism for defense contractors, has been studying Russian content across 11 social media platforms and hundreds of RSS feeds in multiple languages, collecting 1.2 million posts in a 90-day period surrounding the November 3 election.
 
It found the most prolific Russian outlets included state-backed media outlets like RT, Sputnik, TASS and Izvestia TV.

FILE – Russian President Vladimir Putin is seen on the screen of a camera viewfinder in a studio of Russia’s RT television channel in Moscow, Russia, June 11, 2013.

“We only look at active engagements, so you have to physically click on something or retweet it,” said Hu, admitting that the estimate for the millions of engagements is still “pretty rough.”
 
Also, Omelas determined that only about 20% of the posts pumped out by Russia’s propaganda and influence machine are in English. Forty percent of the content is in Russian, with the rest going out in Spanish, Arabic, Turkish and a handful of other languages.
 
Russian-backed media
 
U.S. officials have been reluctant to speak publicly about the impact these efforts have had on American citizens, in part because there is no easy way to measure the effect.   
 
After the 2016 election, for example, intelligence officials repeatedly said while they were able to conclude Russian efforts expressed a preference for then-candidate Donald Trump, they could not say whether any Americans voted differently as a result.
 
Still, multiple officials speaking to VOA on the condition of anonymity given the sensitivity of the subject said it was unlikely that Russia would continue to spend money on these media ventures if the influence operations were not producing results.
 
An August 2020 report by the State Department’s Global Engagement Center, while not sharing a figure, concluded Moscow “invests massively in its propaganda channels, its intelligence services and its proxies.”
 
U.S. election security officials have likewise repeatedly voiced concerns about Russia’s efforts to stake out space in the news and social media ecosystem.
 
“I’m telling you right now, if it comes from something tied back to the Kremlin, like RT or Sputnik or Ruptly, question the intent,” Christopher Krebs, the former director of the Cybersecurity and Infrastructure Security Agency, told a cybersecurity summit in September. “What are they trying to get you to do? Odds are, it’s not a good thing.”

FILE – The main newsroom of Russia’s Sputnik news is seen in Moscow, April 27, 2018.

Senior CISA officials again called out Russian-backed media while briefing reporters on Election Day (November 3), begging Americans to treat any information coming from Russian-linked sources with a “hefty, hefty, hefty dose of skepticism.”  
 
Disinformation payoff
 
To some extent, the repeated warnings about Russian-supported outlets like RT and Sputnik have paid off, at least when it comes to this month’s presidential election.
 
“They (RT and Sputnik) aren’t prominent domains in any of the analyses that we’ve done on false narratives of voter fraud,” Kate Starbird, a University of Washington professor and lead researcher with the Election Integrity Partnership, told VOA via email.
 
“They do sometimes amplify disinformation that is already spreading,” she added. “But they typically come in late and rarely change the trajectory of that disinformation.”
 
Some intelligence officials and researchers warn, though, that for now, that could very well be enough.
 
“You still see people sharing their (Russian) content in America,” said Clint Watts, a former FBI special agent who has been studying Russian disinformation efforts for years. “The reach of Russian news inside the U.S. … is exponentially higher than in other countries. So, they can see a return on it.”
 
Redfish red herring
 
To help grow that return even more, and to avoid labels that identify the content as Russian, outlets like RT and Sputnik have also begun pushing content through the social media accounts of some of their most popular hosts, added Watts, currently a non-resident fellow at the Alliance for Securing Democracy.

 

Then there is the Redfish channel on Instagram, which Watts said has allowed Russia to gain “significant traction.”

“They put up a heavy rotation on George Floyd protests, and that is now where you see Americans sharing it routinely, millions and millions of shares,” Watts told VOA. “They dramatically raised their profile, particularly with the political left in the United States and African Americans, who I’m convinced have no idea that Redfish is a Russian outfit.”
 
Far-right appeal
 
Russia is also finding ways to resonate with the far right.
 
According to the August report by the Global Engagement Center, Russian proxy websites like Canada’s Global Research website or the Russian-run Strategic Culture Foundation amplify conspiracy theories about subjects like the coronavirus.
 
Researchers like Watts say that propaganda then sometimes finds its way onto far-right websites such as ZeroHedge or The Duran, where it gets amplified again.
 
Another researcher warned that Russian efforts are also resonating with far-right conspiracy theorists, some of whom will pick up propaganda from proxy sites, or more mainstream sources like RT.
 
“All of these Q(Anon)-driven accounts — they love the Russian stuff,” the researcher told VOA on the condition of anonymity, given the sensitivity of the work.
 
Into the mainstream
 
Not all Russian propaganda efforts circulate on the fringes of American politics. Some of the narratives hang around and are repeated often enough that they become difficult to ignore.
 
“So then, they can get somebody else from the American far right or far left to pick up on that story and then eventually snowball that so mainstream picks up on it … coopting the American media in a sense,” said Omelas’s CEO, Hu.  
 
Other times, Russia’s influence peddlers have found their contributors thrust into the spotlight.
 
For example, on November 20, U.S. President Trump repeatedly retweeted Wayne Dupree, who regularly writes opinion pieces for RT.

 
Just days earlier in a RT opinion piece, Dupree slammed what he described as “the fraudulent and brazen behavior of these Democrats to destroy the election’s integrity.”

“They are all going to fall hard, along with the major news networks that have sought to brainwash the American people,” Dupree added. “The entire system is coming down, folks. Get ready.”
 
A number of researchers and U.S. counterintelligence officials say the incident falls into what has become an all-too familiar pattern.

In June, U.S. officials and lawmakers warned that RT purposefully courted outspoken, local U.S. police officers and union officials, attempting to use their reactions to protests sweeping across the country to further inflame tensions.
 
“They know they no longer need to do their own work,” National Counterintelligence and Security Center Director William Evanina told Hearst Television in October.  
 
“They’re now taking U.S. citizens’ information, and they are taking it and amplifying it,” he said. “Whether it be conspiracy theorists or legitimate folks who have wrong information, they get amplified consistently.”