Capitalism for the Poor: Yellen and the Quiet Redesign of the American Economy

Part 2 - How the U.S. Treasury Was Politicized in the Modern Era

Janet Yellen didn’t just misread the economy—she helped rewire the Treasury into a political instrument, dressed in neutral language but driven by progressive ideology. This series tracks how that shift happened, what it unleashed, and why the next era of American finance will be shaped not by economists, but by narrative-savvy power players.

The Rise Without a Fight

Janet Yellen didn’t so much rise as she endured. Her ascent wasn’t built on bold ideas or reformist zeal—it was a slow drift upward, buoyed by her talent for not offending anyone who mattered. She didn’t challenge the consensus; she became its avatar.

Her tenure as Fed Chair ended in 2018 when Donald Trump—not typically praised for strategic or thoughtful decisions—actually made a strategic and thoughtful one: he declined to reappoint her. Wall Street murmured its disapproval. Policy insiders praised her “steady hand,” a phrase typically reserved for those who leave things more or less as they found them. She’d begun the long-overdue tapering of quantitative easing but leaned reliably toward labor—enough to trouble the inflation hawks, though not enough to seriously disrupt their worldview.

When she left, the press cast her as a kind of technocratic martyr—ousted not for failure, but for the sin of being insufficiently Trumpian. It was a a typical narrative for the era, and one that neatly sidestepped the real question: what, exactly, had she changed?

That myth of dignified exile cleared the runway for her next role—where she would swap the cautious restraint of a central banker for the more flexible instincts of a political operator.

The “Safe” Choice That Rewired the Treasury

When Joe Biden won the presidency in 2020, his team needed a Treasury Secretary who could check three boxes: credibility with markets, credibility with progressives (though she was white, she was a leftist, west coaster female), and credibility with the press. Yellen offered all three. She was the safe choice.

But “safe” was deceptive. By early 2021, the expectations for economic leadership had changed.

Gone was the idea that Treasury should simply mind the bond market, collect revenues, and issue debt. The institution was now expected to promote social equity, crony climate goals, international tax coordination, and—naturally—ensure economic growth. The job wasn’t just economic stewardship anymore. It was moral leadership by another name.

And Yellen fit the bill perfectly—maybe too perfectly. In Washington, it’s often said you pick the wrong person for the hard job. That saying applies neatly here.

She spoke the language of restraint while quietly supporting the largest fiscal experiment in modern U.S. history. She offered continuity with the old guard—Summers, Rubin, Bernanke—while enthusiastically advancing the Biden agenda: massive stimulus, an expanded welfare state, and a full-throated embrace of ESG-friendly capital flows.

But ESG, as deployed under Yellen, had already been hijacked. What began as a framework for responsible investing—one that might have prioritized actual environmental goals—was absorbed by one of America’s most persistent dysfunctions: ideological activism dressed up as social justice.

In the United States, ESG doesn’t stand for “environment, social, and governance.” It means little “e” for environment, big “S” for social equity and welfare, and even bigger “G” for governance designed to enforce more of the big “S.” Nature protection was sidelined in favor of bureaucratic metrics and HR-level moral signaling. Logical thinkers were alienated. The backlash was inevitable. ESG is now practically banned in half the country.

For a Keynesian, Yellen showed remarkably little curiosity about how ESG might have been implemented constructively—say, in the way some European markets have, where environmental priorities still mean something. Instead, she and her cohort behaved like bureaucratic lunkheads, more interested in checking moral boxes than building functional policy.

The same media that once called her dull now calls her visionary.

The Power of Presence, Not Policy

But what mattered wasn’t what she said. It was what her presence allowed.

By elevating Yellen, the administration gave itself cover. Her résumé was the justification. The academic coastal set relished her CV—how could you possibly question someone from Berkeley? Unless, of course, you knew Berkeley was a madhouse. Her tone was the shield. With her at the helm, it was easier to pretend the new economic model was responsible governance, not an ideological shift. No need to call it redistribution—it was “targeted relief.” No need to call it a wealth transfer—it was “supporting demand.”

Inside the Treasury, the culture shifted quickly. Staffers with activist backgrounds flowed into key roles. Policy memos began to include phrases like “economic justice” and “equity in access to capital.” These weren’t rogue insertions—they reflected the new mission.

Under previous secretaries, Treasury had sometimes been aggressive, even ambitious. But it had rarely tried to lead a social transformation. That was new. That was Yellen.

And to anyone who raised concerns, the response was always the same: look at her qualifications. Look at her experience. As if the CV itself could neutralize the agenda.

A Global Shift in Priorities

By the time Janet Yellen stepped into the Treasury in early 2021, the American economy was still recovering from a pandemic, and the Biden administration was already committed to spending its way out of uncertainty. Yellen was not an outsider brought in to steady the ship—she was the ship, or at least the technocratic figurehead of a broader ideological vessel.

Her job, in theory, was simple: rebuild confidence, maintain stability, keep Treasury above the political fray.

That’s not what happened.

Instead, the Treasury Department quickly became an operational extension of the administration’s political goals—one part recovery, one part social policy lab. The early signal was the American Rescue Plan: $1.9 trillion in stimulus, pushed through with the language of urgency, equity, and moral clarity. Yellen not only supported it—she publicly and repeatedly insisted it was necessary, strategic, and safe.

Inflation, she said, wasn’t a risk. It would be “transitory.” She echoed the messaging line for months, even as prices climbed and Americans started to feel the pressure at grocery stores and gas stations. When reality caught up, her response wasn’t economic—it was reputational. She admitted the call was wrong, but framed it as a forecasting error, not a policy failure. Markets don’t respond well to delayed humility.

From Stewardship to Ideology

The Treasury’s role had long been conservative by design—administering tax law, managing the debt, supporting the dollar. But under Yellen, it became something else entirely: a policy delivery mechanism for a vision rooted not in market efficiency, but in social correction.

She championed a global minimum tax, partnering with the OECD to build a supranational framework that quietly diluted national tax sovereignty in the name of fairness. (Oh, how thoughtful, Janet.) The move drew applause from progressive policy circles—but anyone thinking clearly saw it for what it was: a signal that America was no longer prioritizing competitiveness, but conformity. A shift from advantage to apology.

She didn’t realize she was the harbinger. But she was. The mass-conformity she helped normalize would define the era—until the backlash finally came, and Trump returned to power in 2024.

At home, Treasury messaging began leaning heavily on themes like racial equity, climate resilience, and “inclusive recovery.” These weren’t just comms-office flourishes. They reflected a genuine reorientation. Treasury was no longer simply guarding the purse. It was helping to reshape society—armed with the borrowed legitimacy of Janet Yellen’s résumé.

Theatrical Neutrality

The irony is that Yellen never had to raise her voice or fire off a tweet. She wasn’t political in form—she was political in function. Her influence was more dangerous precisely because it didn’t look like ideology. It looked like professionalism.

You could imagine her living in a beige house, with beige walls, sepia-toned furniture—and worse, a television set from the 1980s. A closet full of impeccably dull community librarian-type clothing. Quiet dinners with academic radicals who forgot they were radicals—and professors who never realized they were ideologues to begin with. The kind of adults who, as they age, attend more protests, not fewer—choosing which ones to show up for based on which subject lines catch their eye in their Hotmail and AOL inboxes. (Imagine: JanetIsYellen@hotmail.com.)

In the end, she would pull no surprises. It was all tone, all moderation, zero passion. Just your typical, middle-class American strain of deep-seated academic leftism.

But behind it was something else entirely.

What she helped normalize was this: the idea that economic institutions should actively pursue social transformation—not just create the conditions for prosperity. And once that shift is made, it’s hard to undo. It embeds itself in the bureaucracy. It shows up in grant programs, in international agreements, in discretionary spending, in hiring decisions.

Under Yellen, the Treasury didn’t collapse.

It converted.

Quietly. Efficiently. Without debate.

And that’s how major institutional shifts happen in Washington—not with revolution, but with paper credentials. Backed by the most corrosive force in American life since the 1990s: a bicoastal ideological cartel, run by credentialed ideologues and enforced by intellectual roughnecks who mistake conformity for intelligence—and treat dissent like heresy.