Threats to democracy put US economic growth at risk, warns Treasury Secretary in reference to Trump

AP

Treasury Secretary Janet Yellen pointed out that a fractured democracy can have a destructive effect on the economy, in an indirect attack on Donald Trump.

In a speech prepared for her appearance Friday in Arizona, Yellen used economic data to paint a picture of how disregard for America's democratic processes and institutions can lead to decades-long economic stagnation.

Yellen, taking an unusual step into the political arena, did not mention Trump, the presumptive Republican presidential candidate, by name in her speech to the McCain Institute's Sedona Forum, but she indirectly alluded to the former president's possible impact if he returns to office. White House.

Her statements serve as something of a warning to business leaders who might overlook Trump's disdain for modern democratic norms because they prefer the former president's vision of achieving growth by cutting taxes and eliminating regulations.

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Yellen acknowledges that democracy “doesn't seem like the typical terrain for a Treasury secretary,” but she adds that “democracy is indispensable to building and maintaining a strong economy.” Her office released a copy of her speech in advance.

“The argument presented by authoritarians and their defenders that the dismantling of democracy is a fair and even necessary price for economic gain is deeply flawed,” she said. “Undermining democracy is undermining one of the bases of sustainable and inclusive growth.” The official mentioned a study according to which democratization increases gross domestic product per capita by about 20% in the long term.

Yellen noted that the January 6, 2021 insurrection was a day when democracy was threatened when “rioters, agitated by a lie, stormed the Capitol.” Trump, who falsely claimed the 2020 election was stolen from him, has been charged with conspiring to overturn the election, in one of four criminal charges he faces. The tycoon denies having committed any crime.

And while Yellen does not specifically mention Trump's comments, he again undermined the tradition of a peaceful transfer of power this week when he refused to commit to accepting the results of this year's presidential race in an interview with the Milwaukee Journal-Sentinel.