Episode Summary: Sec. Janet Yellen (Extended)

The Late Show Pod Show with Stephen Colbert – Released January 20, 2025

In this extended episode of The Late Show Pod Show with Stephen Colbert, Treasury Secretary Janet Yellen joins Stephen Colbert for an in-depth discussion about her tenure, the current state of the U.S. economy, trade policies, and personal anecdotes that add a lighter touch to the conversation.

1. Reflection on Tenure at the Treasury Department

Janet Yellen begins by expressing mixed emotions about concluding her role, highlighting both achievements and the challenges faced during her tenure.

• Team Accomplishments:
  Yellen [01:20]: “It’s bittersweet. I have a wonderful team. We’ve worked so well together and I’m gonna really miss them.”

• COVID-19 Response:
  Yellen [01:20]: “When President Biden was elected, 2,000 people a day were dying of COVID. We got people vaccinated.”

• Economic Recovery Efforts:
  Yellen [01:20]: “We got out emergency rental assistance and unemployment insurance kept so many small businesses from going under and got people back to work really quickly.”

• Economic Performance:
  Yellen [01:20]: “The US Economy is the envy of the world and it’s firing on all cylinders.”

2. Economic Performance and the Recent Election

Colbert challenges Yellen on the discrepancy between economic indicators and voter sentiment that influenced the recent election.

• Election Insights:
  Colbert [02:13]: “Why do you think this past election made it clear that 49.9% of American voters don't agree with you or don't agree with the economist and that the economy was, according to polling, one of the biggest reasons why people put Donald Trump back into office?”

• Yellen’s Response on Inflation and Wages:
  Yellen [02:46]: “We did see a huge increase in prices, something like 20% increase in the general price level over about three years... wages also increased. According to our calculations, the typical wage earner is able to afford now the same basket of goods and services as back before the pandemic, with $1,600 left over to save or spend.”

3. Discussion on Tariffs and Trade Policies

The conversation shifts to trade policies, particularly tariffs proposed by former President Trump, and their potential impact on the U.S. economy.

• Critique of Trump’s External Revenue Service Proposal:
  Colbert [04:05]: “Trump says immediately he wants to start something called the External Revenue Service instead of the IRS... Why didn’t you think of something that stupid?”
  Yellen [04:26]: “We have customs, they collect the tariffs.”
  Yellen [04:53]: “Trump doesn't seem to understand that tariffs get paid by the American companies and then they pass on those and consumers costs to American consumers.”

• Impact of Tariffs on Consumers and Businesses:
  Yellen [05:17]: “It's like a tax increase for the American consumer... Americans... things they buy... are going to be higher by the amount of the tariff.”

• Continuation of Tariffs on China:
  Colbert [06:13]: “One of the things that interested me is that the Biden administration actually kept a lot of the tariffs on China. What was it about those tariffs that you liked?”
  Yellen [06:21]: “We were concerned about Chinese practices... we really left them on because China had not done what they promised to do.”

4. Hypothetical Discussion on Expanding U.S. Territory

Colbert introduces a hypothetical scenario regarding Trump's threats to annex Greenland and Canada, adding a humorous twist to the economic discourse.

• Colbert’s Jest on Territorial Expansion:
  Colbert [06:57 – 07:44]: Discusses the idea of making Canada the 51st state, prompting a lighthearted exchange about U.S.-Canada relations.
  Yellen [07:17]: “We were trying to make a lot of friends around the world and to strengthen our partnership.”
  Colbert [07:35]: “Okay, so you don't like Canadians.”
  Yellen [07:39]: “We do like Canadians.”

5. Advice for Successor Scott Besset

As Yellen prepares to leave her position, Colbert seeks advice for her successor, Scott Besset.

• Yellen’s Recommendations:
  Yellen [08:22]: “The treasury has been writing all of the rules to put into effect a whole set of clean energy tax incentives... my advice is don’t. I would keep them in place because these incentives have generated already over $500 billion in announced investment.”
  On Tax Cuts:
  Yellen [09:50]: “President Trump has indicated that he would like to extend them and maybe do more... the cost of just extending those tax cuts... is going to amount to over $4 trillion.”
  Focus on Middle Class:
  Yellen [09:50]: “They really need to find ways to pay for it. I would recommend focusing on the middle class and in the interest of tax fairness and sustainable fiscal policy.”

6. Light-Hearted Anecdotes and Personal Stories

The episode takes a humorous turn as Colbert references a fictional headline about Yellen consuming hallucinogenic mushrooms during a China visit, leading to a candid discussion about Yellen’s past experiences.

• Mushroom Incident:
  Colbert [10:56]: “Treasury Secretary Janet Yellen admits to eating hallucinogenic mushrooms during China visit... are you high right now?”
  Yellen’s Clarification:
  Yellen [11:26]: “I haven’t had them, so you're safe. They were delicious... they were cooked properly.”

• Yellen’s Experience with Marijuana:
  Colbert [12:36]: “Did you ever partake for real?”
  Yellen [12:54]: Shares a story about experimenting with smoking pot during college, initially struggling to inhale, eventually becoming a heavy user for a decade before quitting.
  Yellen [14:25]: “I never smoked a cigarette... It was awful. I learned to inhale... I was smoking three packs a day. And then I quit cold turkey.”

Conclusion

Treasury Secretary Janet Yellen provides a comprehensive overview of her time in office, addressing significant economic policies, challenges, and her perspectives on recent political developments. The episode seamlessly blends serious economic discourse with personal anecdotes, offering listeners both insightful analysis and relatable human moments.

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