Treasury Secretary Janet Yellen makes the economic case for democracy in Sedona remarks
Treasury Secretary Janet Yellen speaks during the McCain Institute's 2024 Sedona Forum at Enchantment Resort on May 3, 2024 in Sedona. ·AZCentral | The Arizona Republic
Laura Gersony, Arizona Republic
Updated 5 min read
SEDONA — Janet Yellen, President Joe Biden’s Treasury secretary, on Friday addressed a crowd of high-profile newsmakers in Sedona to make an argument that has, for decades, been an unspoken consensus in American politics: that democracy is the best recipe for economic success.
Her remarks at the McCain Institute's Sedona Forum, an annual gathering of national and international leaders founded by the late Sen. John McCain, R-Ariz., come as experts say the American political system bears warning signs of democratic erosion.
“John McCain was right. It’s impossible to overestimate how important democracy is to America,” Yellen said.
She continued: “But democracy isn’t just important in and of itself. I believe that democracy is critical to building and sustaining a strong economy.”
In her remarks, which Yellen acknowledged were unusual for her to make as the country’s fiscal and economic policy chief, she took aim at the efforts led by former President Donald Trump to undermine the 2020 presidential election. By way of example, she mentioned a pro-Trump mob's Jan. 6, 2021, attack on the U.S. Capitol.
Trump, again Biden's Republican rival in this year's presidential election, is battling criminal charges over his actions leading up to that day.
“Recently, democracy has come under threat. That challenge was especially terrifying on the notorious day of January 6th, when rioters, spurred on by a lie, stormed the Capitol,” Yellen said.
"Our democracy is far from perfect, but that respect has always been the basis for Americans’ ability to cooperate with each other, even in difficult circumstances. We must renew our commitment to do everything possible to protect it — for democracy itself and for the economy."
In a news release, the Republican National Committee called Yellen's remarks a "brazen, unprecedented injection of politics into her taxpayer-funded position." The RNC charged it was an attempt to "gaslight Americans away from" voters' economic dissatisfaction under Biden.
Indeed Yellen’s visit to Arizona, a swing state in this year’s presidential election, comes at a time when pollingsuggests many Americans doubt Biden’s leadership on key economic issues compared with Trump.
Biden’s detractors have hammered him for record-setting inflation the country saw during the pandemic. They’ve argued his big-spend legislation and regulatory agenda helped fuel inflation, even while his proponents credit Biden for helping the U.S. economy avert a widely forecasted recession.
Citizens for Free Enterprise, a free-market political group led by former Arizona Gov. Doug Ducey, reprised those criticisms in a press release ahead of Yellen’s remarks.
"The Treasury Secretary chose Phoenix as the perfect spot to celebrate — the city is one of the nation's leading hotspots of inflation. But don't expect to hear an apology from the Biden administration anytime soon," spokesman Jesse Hunt wrote. "Bidenomics has been a complete failure and Janet Yellen is the chief architect of this disaster."
In the longer term, some economists believe the forces of globalization have contributed to the American public’s appetite for a populist leader in the style of Trump. Polling suggests that around the world, young people tend to have less faith in democracy than older generations.
“Over decades, communities across the country have been hollowed out from deindustrialization. Median real wages have stagnated. Health care and education have become harder to afford,” Yellen said.
Yellen called that a “structural problem” in the U.S. economy that has made other systems, such as China’s socialist market economy, seem more attractive.
The president and his allies have billed his legislative agenda as a way to deliver for people who were left behind by those economic trends. Yellen referenced findings by the Treasury Department, and supported by outside groups, that investments in the industries Biden has targeted are disproportionately headed for places with below-average wages or college graduation rates.
She argued Biden’s agenda stands not just as proof of his own effectiveness, but as proof that “democracy can deliver.”
“That means new bridges, roads, and airports; fast broadband and clean water; and the economic opportunities that come with upgraded infrastructure are being expanded in the communities that need it most,” Yellen said.
As she obliquely took aim at Trump, Yellen’s remarks often returned to McCain, Arizona’s long-serving U.S. senator and 2008 Republican presidential nominee who emphasized traditional patriotism and frequently criticized Trump’s rhetoric on immigration and other topics.
McCain and Trump regularly traded barbs after Trump announced his bid for the presidency in 2015. Trump dismissed McCain as a “RINO,” or Republican in Name Only, representing a bygone era of conservatism that no longer resonates with the GOP’s increasingly populist base.
Their feud escalated when Trump mocked McCain’s record as a POW, saying McCain was "a war hero because he was captured" and that he liked “people that weren’t captured.” The North Vietnamese held McCain as a POW for more than five years.
McCain’s wife, Cindy, endorsed Biden in the 2020 presidential election in a move thought to help swing Arizona towards Biden that year.
Before Yellen’s remarks, Arizona State University President Michael Crow and Democratic Gov. Katie Hobbs touted the federal dollars heading to the Grand Canyon State under Biden’s leadership. Yellen will visit the Phoenix area on Saturday to promote those same themes.
Laura Gersony covers national politics for The Arizona Republic. Contact her atlgersony@gannett.com or 480-372-0389.
