As pointed out by Jen Psaki while dodging a question during a recent press conference, Janet Yellen does indeed have quite a bit of experience in her field. However, contrary to what that answer seems to imply, that shouldn’t excuse her for participating in the corrupt “revolving door” tradition that is so rampant in Washington.
The recent GameStop stock situation has brought to light the fact that Janet Yellen has been paid roughly $7.2 million in “speaking fees” from various corporations since 2019, including several “major banks and investment firms.” $810,000 of that money came from Citadel, a firm which provided “an emergency backstop investment” to Melvin Capital, one of the hedge funds which had been “shorting” GameStop stocks. Citadel is also one of the companies that makes money through their connection to Robinhood, by “fronting” the trades being made by smaller investors through the app, as well as gleaning information from those trades.
Writer Ben Mathis-Lilley raises an interesting question concerning these potential conflicts of interest in an article on Slate. He notes that Yellen could stay “on the legal and formal up-and-up” in this case by recusing herself, however, “What’s the use of having a treasury secretary who has to be recused or excused from discussions of half the firms on Wall Street?”
Other corporations that Yellen has received similar financial compensation from include Citigroup, Goldman Sachs, and Google.
Considering these connections, it seems only fair that she also recuse herself from any discussions concerning cryptocurrency, which is something she apparently has some thoughts on. When asked about the subject during her confirmation hearing, she responded that “Cryptocurrencies are a particular concern,” and that she thought “many are used — at least in a transactions sense — mainly for illicit financing.”
As it turns out, however, the evidence doesn’t seem to back up this opinion. In an interview with Forbes, Binance founder Chanpeng Zhao explains that because cryptocurrencies like Bitcoin exist on a blockchain, there is a sort of “transparent ledger” that makes it hard to move large sums anonymously, which isn’t always the case for fiat currencies. The article also points out that only an estimated “1.1% of all cryptocurrency transactions are illicit.”
Although that is likely a large amount in equivalent dollars, it would still be a drop in the bucket compared to the shady things the big banks get up to. Documents shared by the International Consortium of Investigative Journalists in 2020 showed roughly $2 trillion worth of “illegal transactions” between 1999 and 2017, and that isn’t even accounting for the standard kinds of “shady deals” they engage in. Whether Yellen’s “particular concern” with cryptocurrencies is the direct result of her connections in the financial industry, or simply a byproduct of her familiarity with it, it is difficult to imagine that her view on these matters is as impartial as one might hope.
Yellen had previously agreed to “recuse herself from decisions that would affect certain financial organizations,” however, the Washington Post reports that she will be meeting “with top financial regulators” concerning the issues around the “GameStop stock craze.” It seems the revolving door keeps turning.