Sec. Janet Yellen (Extended)

Summary

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.

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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.”

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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.”

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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.”

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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.”

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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.”

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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.”

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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.

For more engaging discussions and exclusive content, visit The Late Show YouTube channel.

Transcript

[Ryan Reynolds]

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[Stephen Colbert]

It's the Late Show Poncho with Stephen Colbert.

Welcome back, everybody. Ladies and gentlemen, my next guest this evening is an economist who has led the White House Council of Economic Advisors, the Federal Reserve, and most recently the Treasury Department. Please welcome Treasury Secretary Janet Yellen.

Thank you.

Secretary Yellen, good to see you again. Thanks for being here. Are you ready for this?

I'm ready.

I'm bringing it hot and hard. Okay, here we go. On Monday will be the dramatic conclusion of the Biden administration with a bit of a twist ending. Are you sad to leave or are you ready to relax? What are you gonna do?

Well, it's bittersweet. I have a wonderful team. We've worked so well together and I'm gonna really miss them. We'll all miss one another, but we feel proud of what we've been able to accomplish. When President Biden was elected, 2,000 people, 2,000 people a day were dying of COVID We got people vaccinated. People were losing their homes. 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. And recently the economist said the US Economy is the envy of the world and it's firing on all cylinders.

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. Why do you think that message about the good economy, as you say, the best economy in the world right now, especially if the advanced nations came out of COVID in the best shape regardless of our inflation. Could you have been a better cheerleader for the economy?

Well, tried and tried to explain why we were doing the best we could. We did see a huge increase in prices, something like 20% increase in the general price level over about three years. Now, every advanced country saw exactly the same thing when Russia invaded Ukraine, energy prices rose, food price increases were associated. And this was a shock to Americans. And it came on top of a long period in which people have been really struggling with high housing costs, high health care costs, energy price bills, childcare, making so many people feel it's tough to lead a middle class life. Now, when I look at the data, what it tells me is that wages also increased. And 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. So the typical worker's better off.

So you're handing over the keys to a good economy. Trump says immediately he wants to start something called the External Revenue Service instead of the irs, the ers, to collect tariffs. Why didn't you think of something that stupid? Because we already have one. We have customs, they collect the tariffs.

That's the deal. So, you know, we have that agency. And Trump has been saying it's important to have government efficiency. He has his doge commission, and I.

Think it's not a department, even though they call it a department, because departments have to be established by Congress and that hasn't been done.

Right. And if they're looking to save money for American taxpayers, setting up a duplicative agency doesn't seem like a good first step.

Right. So as you say, not the best idea. So 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. What will these tariffs as described do to our economy and do to the consumer?

Well, it's like a tax increase for the American consumer. You go into Walmarts and whether you want to buy a T shirt or a washing machine, anything that we buy, we buy a lot of imported consumer goods and they are going to be higher by the amount of the tariff. So Americans, you said that they've been upset by increases in the cost of living. Well, this is going to be a big increase in the cost of living. And a lot of American firms rely on imported imports. And what they're going to see is the cost of making goods and services is going to go up. They're going to be less competitive in the global economy. So this doesn't seem like a way to address the things that Americans have said are bothering them.

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?

Well, you know we were concerned about Chinese practices that involve, we think are unfair, subsidizing the production of goods for exports that are against global trade rules that unfairly damage American workers and businesses. And President Trump put these tariffs on to induce China to address these practices. And we really left them on because China had not done what they promised to do.

Trump's also threatening economic force to make Greenland and Canada part of America. Did you guys ever consider that.

[Ryan Reynolds]

Blue.

[Stephen Colbert]

Sky thinking there are no rules, Anything you want? Did it ever even occur to you? Let's spitball here. What would you do to Canada?

Well, we were trying to make a lot of friends around the world and to strengthen our partnership.

Makes it seem needy when you try.

To make friends, you know? Yeah, no, we hadn't contemplated.

[Ryan Reynolds]

We hadn't thought about that.

[Stephen Colbert]

Or making Canada the 51st state. That wasn't part of our plans.

Okay, so you don't like Canadians.

We do like Canadians.

And, well, if you like somebody, why would you want them to be Americans? What could be better than being an American, Madam?

Well, we're friends and they're neighbors across the. And we have a longstanding positive relationship.

Okay. Okay. Any advice for the next guy coming in? Scott Bessett. Bessette. Besset.

Besant, yes.

Besant with a T. Okay, there you go. Any advice? He seems like, compared to some of the other nominees, seems like a capable guy, so.

Sure, I do. I do.

Sure. Whatever. Yeah, fine. Sure.

Well, he's going to have a lot of issues to address. Sure. You know, one thing I would really advise him is the treasury has been writing all of the rules to put into effect a whole set of clean energy tax incentives, and these.

Out they go.

So my advice is don't. I would keep them in place because these incentives have generated already over $500 billion in announced investment. And it's creating jobs, particularly in parts of the country that have been left behind, that need good jobs. It's going to lower the cost of energy. There are incentives for households, and it's going to address the cost pressures that households face and also make us less vulnerable to global shocks like Putin's war against Ukraine that led to an increase in global energy prices. So this is a good program. It's helping Americans lowering the cost of living, creating good jobs. It should stay in place. And I guess the other piece of advice I would give him is, is a number of the tax incentives that were part of the Trump tax cuts in 2017 and the jobs Cuts and Tax Act. They're going to expire this year. And President Trump has indicated that he would like to extend them and maybe do more. And I think he needs to worry about the impact of extending them. We have the largest budget deficits we have really seen in a peacetime economy. The cost of just extending those tax cuts, the benefits of which mainly go to the richest Americans, to the top 1%, that's going to amount to over $4 trillion. And if they're going to do that, 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.

A couple of fun things to hit. A couple fun things to hit here before we let you go. This was a fantastic headline from your time in office. This is from Fox Business. It says, treasury Secretary Janet Yellen admits to eating hallucinogenic mushrooms during China visit, quote, delicious Secretary, legally I'm required to ask you, are you high right now? Do I have a wolf head and a spider body? What's going on? Tracers?

Well, I asked for some hallucinogenic mushrooms before coming on, but I haven't had them, so you're safe. They were delicious. We landed in Beijing for very high stakes meetings, the first really senior economic meetings in several years. Went out to dinner arranged by our attache at the US Embassy. He speaks MANDARIN. He ordered. We went to a restaurant that serves unionese food. And what I later discovered after having some very delicious mushrooms is that and this appeared the next day in Chinese social media and became quite a tweet storm, that these particular mushrooms, if they're not cooked correctly, are hallucinogenic. Well, it was a great restaurant. They were cooked properly. We had no idea that there was anything about these mushrooms until we realized this had become a media frenzy. But they were delicious and I recommend it if anybody.

Okay, good. Any chance I'm just going, well, I got you. Did you ever partake for real? I mean, have you ever. I mean, you're leaving office, you're not running for everything. Have you ever inhaled is what I'm asking.

Well, I think the answer is yes. I mean, I mean, it's been a long time. It's been a bit. I did have an opportunity to smoke pot when I was in college.

Okay.

And the thing that happened is I never smoked. And I smoked at all, at all. I never had a cigarette. And here I just graduated from college, I had this opportunity. I was really looking forward to it. People said, well, really, to get the impact, to feel it, you need to inhale. Well, I had never even smoked a cigarette. So, you know, I'm a kind of person. I like to be prepared. I always prepare when you can. And I thought, well, what can I do to prepare for this? And I realized I should just go out and buy some cigarettes and try to learn to inhale. And so I did. And the first time I smoked these cigarettes, it was awful. I'm coughing. It was terrible. I couldn't imagine how anybody could inhale. Yeah, well, I got a couple weeks I can practice. I bought a lot of cigarettes. I smoked them. Finally, I learned to inhale well. So we smoked pot. It was okay, you know, neither here nor there. You know, I didn't really do it again for the rest of my life, but within six months, I was smoking three packs a day.

Oh, wow. How long did that go on for?

A decade. And then I quit cold turkey.

[Ryan Reynolds]

Wow.

[Stephen Colbert]

Good for you, Secretary. Thank you so much for being here.

Thank you so much.

Treasury Secretary Janet Yellen, everybody. Thank you for listening to the Late Show POD show with Stephen Colbert. Just one more thing. If you want to see more of me, come to The Late Show YouTube channel for more clips and exclusives.

[Justin Hartley]

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[Stephen Colbert]

To help find them.

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[Ryan Reynolds]

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