As part of the Biden administration’s offensive touting the one-year anniversary of the $1.2 trillion Inflation Reduction Act, an editorial by Treasury Secretary Janet Yellen in The Wall Street Journal Wednesday calls it “a prosperous year” for the legislation, “the boldest climate action in the nation’s history.”
Yellen plugs President Biden’s “modern supply-side economics” for its “expanded demand- and supply-side tax incentives” that prompt clean-energy companies to invest in the U.S. and create jobs.
Since Biden took office, Yellen says, U.S. companies have committed more than $500 billion to clean energy and manufacturing. Globally, investment in clean energy is now more than $1 trillion a year.
The Inflation Reduction Act “is the boldest climate action in the nation’s history—one that pushes us toward a net-zero economy by 2050,” says Yellen, who also served as the chairman of the U.S. Federal Reserve.
As to the need for transformation from fossil fuels to electric vehicles and other sources of green energy, the Treasury Secretary says, this summer’s record high temperatures from Phoenix to Miami have made it impossible for anyone to “ignore the mounting evidence of climate change’s destabilizing effect on our planet and on our way of life.”
Pointing also to the California wildfires that caused smoke to engulf the East Coast and Great Lakes states this summer, Yellen writes, “These phenomena have a serious economic cost, both in lost productive capacity and in their potential long-term threat to macroeconomic stability.”
Yellen celebrates Biden’s attempt to build a clean energy supply chain, better wages, apprenticeships, investments in low-income neighborhoods, and tax credits for electric vehicles and energy-efficient heat pumps, stoves and other appliances.
Yellen’s editorial praising the IRA is in stark contrast to a diametrically opposed Wall Street Journal editorial by Phil Gramm deriding the folly of modern supply-side economics.
In it, the former chairman of the Senate Banking Committee writes, “Yellen’s modern supply-side economics argues that government can invest based on enlightened political motives more efficiently than the private sector can invest based on the profit motive. But ‘federal investment is estimated’ by the CBO ‘to yield half of the typical returns on investment completed by the private sector.’”
By some accounts, too, the general public is unaware of Biden’s Inflation Reduction Act or what “Bidenomics” is, with some calling Yellen’s campaign “a tough sell” at a time gas and energy prices are rising and groceries and child care costs are still double what they were before inflation started rising two years ago, just as Biden took office.
Nonetheless, Yellen closes out by saying, “The Inflation Reduction Act is a turning point in the national effort to preserve the planet and to shape a prosperous, inclusive and resilient economic future.”
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