Today, Secretary Clinton talked with Secretary of the Treasury Janet Yellen at the Clinton Global Initiative 2023 Meeting. The two discussed the care economy, the U.S.’ economic response to the COVID-19 pandemic, U.S. foreign policy, and more.
Please find the full transcript of the conversation below.
A community of doers needs leaders who are also doers. And we have one with us today, someone whom I deeply admire and just find to be a woman who understands the mission and just works at it and gets things done because she keeps going, which is our theme.
So let me start. Secretary Yellen, you were chair of the White House Council of Economic Advisors. You then became the first woman to chair the Federal Reserve. Now, of course, you are the first woman United States Secretary of the Treasury, and you are the first person in history – man or woman – to have assumed all three positions. I know that as a woman, you’ve occasionally talked about some of the barriers or challenges that you faced in your career and how you overcame them, but could you maybe share a few of those with the audience, particularly for younger women who look up to you rightly as a role model?
Thanks so much, Hillary, and let me first say it’s been an honor and a privilege to have had so many opportunities to serve in significant public policy positions. And I want to say that the person to whom I owe a debt of gratitude is President Bill Clinton, who appointed me a governor of the Federal Reserve in 1994 and then gave me the chance to serve as chair of the CEA during his second term. And I have seen a lot of progress during the time that I’ve been in public service. Partly, I think that progress reflects a conscious decision, certainly in the Clinton administration to promote diversity and to seek to appoint diverse people. And it’s not only a matter of fairness, I think it’s also a matter of good policy and bringing different perspectives and different voices together. And that’s something that we take pride at treasury and in the Biden administration, that it’s our objective to continue and enhance that.
But when I go back to my early days when I was a graduate student, I was a graduate student at Yale and I believe we actually overlapped in New Haven during the time that you were at law school, there were almost no women in economics. There were a couple of women in my class, but a distinct minority. There was not a single woman on the faculty tenure track or tenured. And things have changed. Now I have a regular lunch with a group of people we call the core economics team in the Biden administration. That’s the heads of Treasury, CEA, NEC, and OMB. And three out of four of those positions are now held by women. And a majority of the senior positions. Treasury and Treasury is a place where, once upon a time you saw very few women, a majority are women. So there has been progress. There has been progress in the financial community and on Wall Street where women were also scarce. But there’s still a lot of challenges and through challenges I felt when I was in academia and early days in public policy, the American Economic Association did a survey of its membership and they discovered that while women are now maybe 25 or 30 percent of PhDs in economics, women felt discriminated against in ways that are both subtle and also overt. They felt their work was less valued. They felt it was difficult for them to make their voices heard and they talked. And I think for all women this who are trying to combine work and family life, the difficulties of accomplishing that I think are a real barrier for many women.
Personally, I was very fortunate to have a spouse who we both had academic jobs when our child was young and my husband was committed to my career and sharing responsibilities equally. We had advantages that many women don’t have, but I think that difficulty really holds women back. Importantly, I will say for the Biden administration, finding ways to promote labor force participation of women but of men as well is an important priority. During the pandemic, the programs that we put in effect kept 200,000 childcare agencies and centers operating that otherwise would’ve had to shut. And once upon a time labor force participation of American women was higher than almost any country, and that’s no longer true. And I think the absence of affordable childcare, which is something we would very much like to improve is important. Now you have broken many, many barriers and you are an inspiration to women both in this country and around the world. And promoting the role of women has been something that’s been very important in your career. I would welcome your talking a little bit about your views and the global work that you’ve done on women’s empowerment.
Janet, I so appreciate what you said because you raised a couple of points that are very important to me personally. One, you talked about the care economy and its relationship with what sometimes is called the real economy, but in fact the failure to help people, particularly women in the formal labor force to be able to pursue work and careers because we don’t have the kind of programs like affordable childcare. Paid leave is something that you have been championed for a long time and I feel very strongly we still have to make that case in our country in most of the advanced economies. They better understand it. The second point I would make is that we talked earlier this morning about the Beijing conference back in ’95 and the speeches and everything that was happening there, but probably the most important product of that conference was something called the platform for action, which was signed on by every country. It was accepted unanimously, which would not happen today. And in it, it talked about the barriers women face including in the important work of getting to work. So bottom line, we made progress. We have made a lot of progress. The pandemic set us back and I think it’s really important to recognize we have some catch up to do, but I think part of the challenge is how we take what happens globally and apply it here at home. Do you see a future for the care economy here?
I do see a future for the care economy here. President Biden had in number of really important initiatives that would’ve made childcare affordable. He proposed universal pre-K, two years of universal pre-K and better working conditions for people who work in the care economy, both for children and those who take care of elders. A lot of that legislation passed the House, but it didn’t pass the Senate. And so I think that remains unfinished business, but it’s high priority and very important. I think that’s a very important point. That we did pass for the first time ever in the House some of these provisions, which means we can come back to it when circumstances hopefully change. But because of the Biden administration’s economic policies, the United States has had one of the best economic recoveries of any nation.
We really have. And what do you attribute that to?
Well, when President Biden took office, very few Americans were vaccinated. There were dire predictions about the likely progress of the pandemic. And we had an economy that was in free fall with close to double digit on employment. And so President Biden made it his priority to put in place a very substantial American rescue plan. We knew we had suffered a very serious downturn after the financial crisis in 2008. The truth is it took a decade to recover from that. I was at the Federal Reserve at the time. We stepped on the gas, our foot was the pedal was pressed to the metal. We did everything we could to get the economy back on track. And it took a decade to get that done. And when people are unemployed for long periods of time, we know that a kind of scarring occurs in which they lose connections with the labor force and they suffer problems that make it very difficult for them to get back on their feet.
And we did not want that to happen after the pandemic. And we thought we might be looking at tail risk. That was the equivalent of the Great Depression. So we put in place a very substantial package that was meant to give stimulus to the economy, but also be directed at people and spending categories that we thought would be severely affected. We had an emergency rental assistance program so that people wouldn’t lose the roofs over their head, wanted to make sure food could stay on the table. And we remembered from 2008 that state revenues tend to fall very severely in a downturn. And even with stimulus at the federal level, when states lose revenue, they cut back their own spending and it off cuts. It offsets what you might do at the national level. So, you had 350 billion dollars of support for state and local governments, so they wouldn’t be firing schoolteachers and policemen and first responders that they could keep employment and spending going. And look, the outcome of that has been the fastest recovery of any economy around the globe. And to think that very quickly unemployment fell below 4 percent and we’ve had about the strongest labor market over the last couple of years that we’ve had in the last 50 years of American history.
And the biggest wage increases have gone to the lowest income workers. So we feel good about that. Of course, inflation has been a problem, there’s no doubt about that and Americans are concerned about it. Part of it was disruptions from very unique shock, namely the pandemic, which led to massive shifts in spending and supply restraints. Part of it was the amount of stimulus that led to labor market tightness and displacement. But I’ve long felt that it would be possible. It’s mainly the job of the Fed, but the administration’s done what it can to help that it would be possible to bring inflation down in the context of a strong labor market. It’s a so-called soft landing. And I believe we’re seeing that there are risks of course, but I’m very hopeful the labor market is strong. It’s a little less hot than it was a year ago, which reduces some inflationary risk, but we’ve got solid job creation and inflation has come down more than 5 percent off its high. So fingers crossed, I think we’re doing well.
Well, I and the audience agree with that. It’s always a problem in public policy and this you’ve been at the forefront of it to make something good happen when something bad has occurred – 2008 being a prime example – takes time. And our political system is not set up to give people time. And so what you and the president and your teams have accomplished in a very short period is truly remarkable. And people are slowly feeling it, but there’s always a drag, isn’t there? There’s always a drag of like this is how it felt and I’m not over it yet. And the pandemic was so psychologically displacing as well as economic. But the other thing you’ve done, which is so important as you’ve coupled the recovery with the investments, and would you talk a little bit because this audience is particularly concerned about investments in clean energy investments to try to deal with climate change investments in health and healthcare infrastructure, all of which you now have addressed. So how does that fit into the sort of long-term strategy of growth that the Biden administration and you particularly are championing that investing in America will move us forward exponentially in job creation, in quality of life and in dealing with big problems like climate?
Well, thanks for that question. This has been an important Biden priority since one, and he said we need to build back. He wanted to build back better and his urge doing so from the middle out and the bottom up traditionally to promote stronger growth in the United States, what we’ve heard about is supply side economics or trickle down. And that usually means giving big tax breaks or deregulation to rich individuals or to firms that are already doing well with the hope that private investment will be stimulated and there’ll be gains as a result for workers. And the truth is it hasn’t worked. It has worked to enrich the highest net worth and highest income individuals, but it hasn’t worked for the economy. But what President Biden’s approach is also to focus on the supply side of the economy, which is what matters to long run growth and to income distribution and to the environment.
But he’s doing it in a way I’ve kind of dubbed modern supply-side economics. It is supply-side economics, but it’s not the old fashioned trickle-down stuff. First of all, it’s not just about private investment, it is somewhat about private investment because for example, the Semiconductor and CHIPS Act provides incentives that are creating huge investments in semiconductors. The Inflation Reduction Act has an enormous set of tax incentives that are stimulating massive investment in renewables, in clean energy, in electric vehicles, in batteries. So private investment is part of it, but we neglected infrastructure investment forever in this country. And now we’re really rebuilding our infrastructure. We’re investing in research and development. Again, I mean our country used to be among the top performance in terms of government investment in R&D and we fell way down the ladder globally. And now we are an economy that is investing meaningfully in R&D that drives growth and we’re investing in people and want to do more in terms of investing in people, that’s important too.
And it tends to facilitate a decline in inequality rather than an increase in it. And the environment is critically important. I mean, climate change is an existential problem. We’ve waited far too long to take it seriously in the United States, and it’s been utterly a priority for the Biden administration. And the result is we’ve passed a trifecta of legislation, three very important acts, the Bipartisan Infrastructure Act, the CHIPS and Semiconductors Act, and the Inflation Reduction Act, which are really supporting much faster growth in good job creation in the United States. During the Biden administration, we’ve had announced 500 billion of investment in manufacturing. And what’s important I think, is there are parts of the country that just have not enjoyed the same kind of growth that we’ve seen on the coasts. Some of America’s enjoyed growth. Much of America, his not jobs have disappeared. And what President Biden’s approach is is to try to reverse that of the investments that have been announced in clean energy.
We’ve had over 120 billion of investment clean energy investment announced since the IRA was passed. It is concentrated in parts of the country with above average poverty rates and below average college enrollments and college completions. So the president feels, and I agree with them, you ought to be able to get a good job that you can support your family on even if you don’t have a college education. There is a high payoff to a college education, but we need to make sure that people who don’t have a college education can do well too. And many of the good jobs that are being created through these investments are going to people who have had a shortage of opportunity and in parts of the country that haven’t done well over the past decades. And so I think this is an important approach. It’s addressing environmental issues. It will do it in a way that promotes less inequality and will promote long-term growth.
Well, the other thing that’s so interesting to me about the CHIPS Act is that in the implementation, there has been preferences given to companies in order for them to access the billions of dollars that are intended to be an incentive to get back to advanced manufacturing in America. And some of those conditions are having childcare available, having childcare either on site or subsidizing your workers for childcare. And it’s not just out of the goodness of the hearts of the policy makers, but we need to expand our workforce when it comes to advanced manufacturing. And that means including women. And if you’re going to include women in advanced manufacturing, you’re going to have to provide some access to quality affordable childcare. So I’m excited about the trifecta, as you say, Janet, that was passed and I see the evidence of it going up all over the country and new plants, new clean energy products, obviously infrastructure. And this audience here at CGI hope those of you interested particularly in these areas will pay attention to that legislation because there’s a lot of incentives for the private sector to get more involved.
There are indeed. Thanks for that. If you don’t mind, I’d like to maybe turn our discussion toward foreign policy. Sure. So one of the things the Biden administration and I have been most focused on of course is Russia’s brutal war against Ukraine. Treasury has been involved in imposing a set of sanctions. We have export controls that are in place. We devised a sort of innovative price cap that’s intended to deprive Russia of a significant share of the revenue it normally gets from selling oil and global markets while keeping the oil flowing so that we hold down global prices. I visited Kiev. It is remarkable, the courage, the bravery of the people, how much they obviously love their country, how much they’re suffering and are willing to bear. We have historic military involvement, but we know that more needs to be done. And as a former Secretary of State, I’m very curious to hear your perspective on US support for Ukraine on the war, and I’d very much like to hear about CGI’s important work in this area.
Well, first of all, Janet, I want to commend you and the Biden administration, particularly the president for the strong stand that’s been taken to support Ukraine. And that’s been obviously with military supplies and equipment of all kinds, but also putting together the alliance which was not in great shape when the president took office. There’d been a lot of damage done to all of our alliances, but particularly to NATO and our relationships in Europe and rehabilitating that and getting it in a position where people are united on behalf of Ukraine and against Putin’s Russia was a major success. And then of course, the sanctions, which you mentioned are really important and there has been some effect of them, but there needs to be more, and that’s something that has to be ratcheted up I think, over the very near future. So first of all, I think the heroism, the courage of the people of Ukraine and their leaders is just an extraordinary story that is so inspiring. It’s horrible to think that they had to rise to this occasion because of the brutality of the invasion, but rise, they did defying the odds, not just the odds of what Putin had calculated, but really the odds everybody had calculated about whether or not they could withstand an invasion. So they deserve our support. I believe their fight is our fight, their fight for freedom for democracy against a return to an old way of nations relating to one another, which is Putin’s intent to try to change the boundaries of countries to try to reestablish the old imperial Russia, if not the Soviet Union.
So we have to stay with the Ukrainians, and it is really important not to push them to negotiate when number one, the person you’d negotiate with, it’s not trustworthy. You cannot trust anything he says, I know that from personal experience and you cannot count that he would be able to deliver what you think he would be saying because he has no intention of delivering. And secondly, we cannot sacrifice Ukraine and especially given the extraordinary personal sacrifices that the Ukrainians have made to protect their homeland in some kind of phony deal that some people are intent upon trying to convince or foist upon Ukraine. So three quick things, as much military equipment as quickly as possible, get it there sooner, it will get us in a stronger position to be able to support Ukraine and they will be able to have taken back more of their territory, which puts them in a leverage position that gives them some kind of credibility in dealing with Putin.
Secondly, tighten the sanctions even more. You’re a hundred percent right that this really creative creative idea of the price cap, I think it’s time to look at maybe even lowering it a little bit, increase the pain. All that Russia produces is basically commodities led by oil and gas. We don’t want to disrupt the markets, but we want to increase the pain on them. And thirdly, continuing to tend to our alliance, and that means starting at home to make it clear to the naysayers and the elements within our political system that this is something that we’re going to stick with. So that’s how I think we are positioned, and I hope it continues and we don’t have much time left, but I want to end with a quick question about China. Because you’ve been there, you’ve been working that relationship, it is so critically important and I think your insight into why you go there, why you keep reaching out and why that’s an important relationship, no matter what our problems are, for us to pay attention to.
The United States and China are jointly 40% of the global economy. And I think no bilateral relationship is more important to the entire world than the US-China relationship. I think it’s essential that we find a way to get along and to create relationships in which both the United States and China can thrive. And I believe that’s important. We of course, have our disagreements with China. We have concerns related to national security. We have concerns related to human rights, and we have concerns related to China’s trade practices and state subsidies to sectors that we think creates a playing field that in many ways isn’t level. That said, it’s critically important that we work together to address problems that concern the entire globe and that we find ways to discuss our differences and to solve ’em. I tried to set out in a speech I gave last April, I believe, an approach to China that’s based on essentially three pillars.
The first is that we take our national security concerns seriously and will address them that isn’t negotiable and we will protect human rights, but that we seek a healthy economic relationship. It may be a competitive relationship, but it’s also in many areas a win-win relationship in the sense that our trade and investment flows produce gains for China and gains for the United States, and much of it is uncontroversial should thrive and it would really be disastrous to try to decouple from China. We don’t want to decouple with China. We are in some areas overly dependent on China in terms of our supply chains. And clean energy is a perfect example of that. Almost all the minerals that go into electric vehicle, batteries, batteries, solar panels and the like, we’re heavily and overly dependent on China. So we do need to diversify our supply chains, but that doesn’t mean decoupling.
We need to de-risk but not decouple from China. So I’m really trying to communicate that we seek a healthy economic relationship with China and we want China and China’s people to gain just as we want Americans to gain from it. And third and importantly, we have a responsibility to the entire world to work together to address global challenges. And at the top of that list is climate change, but there’s more that’s involved too at the moment. Many countries, particularly in Africa, but also in other parts of the world, face unbearable debt problems. They really need to restructure their debts. China has done a great deal of lending in many cases as the most important lender, but for these countries to get on their feet, they need to restructure their debts and we need to work with China to facilitate that to make sure that that’s possible.
So I did visit China. We’ve had a long period during the pandemic in which there have been no senior level interactions. And President Biden and President Xi agreed in Bali that we should try to reestablish communications, reestablish dialogue both at senior levels and its staff levels. And in particular, they singled out financial market issues and economic performance as topics we should be routinely discussing. And so that was part of my visit to China was to reestablish dialogue. What’s happening in our economies, where can we work together? Understanding how our policies affect the larger global economy, especially when we have disagreements, I think it’s necessary to discuss them honestly and openly and to give the Chinese an opportunity to talk about areas where they think our policies arguably go beyond a national security concern and impact their overall growth and development. And we may or we may not respond to those concerns, but at least providing channels for that kind of feedback I think is important. And I know my trip to China got a fair amount of attention, but really I think what we should seek is a relationship where it’s completely routine for Chinese officials to be visiting the United States and vice versa. And it shouldn’t be headline-making, and that’s what I’m meant to achieve.
Well, I could talk to you for a long, long time, my friend. I think you all have had a chance to see why three presidents entrusted Secretary Yellen with high positions in their administration, starting, as she said, with my husband because she has a way of taking economic problems and talking about them in everyday terms about getting people back to work, getting affordable childcare, and even in the global arena, talking with each other, trying to figure out where there may be areas of common interest and therefore common cooperation and where lines have to be talked about and drawn because there isn’t. But you can’t get there if you don’t engage. And so please join me in thanking her for her service to our country and the world. Thank you, Janet.