Julie Depenbrock

Jonathan Capehart

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﻿Jonathan Capehart:: I'm Jonathan Capehart and welcome to "Capehart." The Russian invasion of Ukraine has led to significant global sanctions against Russia, its leaders and oligarchs. Smack in the middle of the United States' effort is Treasury Secretary Janet Yellen. 

Sec. Janet Yellen> We have isolated Russia financially. The ruble has been in a free fall. The Russian stock market is closed. Russia has been effectively shut out of the international financial system. 

Jonathan Capehart:: In this conversation first recorded on March 10th for Washington Post Live, Secretary Yellen talks more about how the sanctions work. We also discuss record-high inflation and gas prices hitting American consumers. And she tells me when we'll be able to pay for things with a Harriet Tubman $20 bill. 

Jonathan Capehart> Secretary Yellen, thank you for coming to Washington Post Live. 

Sec. Janet Yellen> Thanks so much for inviting me, Jonathan. Nice to be with you. 

Jonathan Capehart> So, let's start with some -- a little bit of breaking news. A few hours ago, the British announced sanctions against Roman Abramovich, the Russian oligarch who also owns the Chelsea football team, which he was trying to sell but can't now because of the sanctions. Will the United States follow suit? 

Sec. Janet Yellen> Well, we have a list of individuals, Russians on whom we have imposed sanctions, and a further group of individuals that we're considering. So the names continue to be added to the sanction list. And I don't want to talk about any specific individual, but certainly this is one of the ways in which we're trying to punish Russia for what they have done and make it clear to the oligarchs who are -- have been supporting President Putin and providing support for him to conduct this war that this is something that is an atrocity and that we, with our allies, will take actions to raise the cost to them, and hopefully they will express their views to President Putin as a consequence. 

Jonathan Capehart> Mm-hmm. Madam Secretary, when your deputy, Deputy Secretary Wally Adeyemo, was here last week, another round of sanctions were announced while we were discuss-- while we were talking against Russian officials, oligarchs, family members and associates. Would you like to announce any more right now? Or at least you just mentioned that there are a list of people and organizations you're considering. Might we see a new announcement today or this week? 

Sec. Janet Yellen> Well, we continue to work very closely with our allies to consider sanctions. Certainly at this point, we're not seeing Russia back off the horrific war that they have started, an unprovoked invasion of Ukrainian homeland. And in fact, the atrocities that they're committing against civilians seem to be intensifying. So it's certainly appropriate for us to be working with our allies to consider further sanctions. But it's important to understand that we have already had a very devastating impact on Russia. We have isolated Russia financially. The ruble has been in a free fall. The Russian stock market is closed. Russia has been effectively shut out of the international financial system and the war chest that Russia amassed, over $600 billion in Central Bank reserves that I think it hoped to use to cushion any blow to the Russian economy, the actions that we have already taken against Russia's banks and particularly against the Central Bank of Russia, with many of our allies participating in that has made those reserves all but unusable. So the Russian economy will be devastated as a consequence of what we've already done. But we do consider -- continue to consider further steps we can take. 

Jonathan Capehart> Madam Secretary, given the litany of things you just mentioned about the Russian economy, is it safe to say that the Russian economy is in free fall? 

Sec. Janet Yellen> It's certainly experiencing a very severe contraction. And I don't -- I don't want to make the forecast for what will happen to the Russian economy over the coming year, but it is certain to contract meaningfully and, you know, over the medium and longer term, we have put in place export controls that will deprive Russia of the advanced technologies, the semiconductors and other things that they need to continue to advance economically and to fortify their defenses. And so our longer-term impact will also be negative, degrading Russia's ability to project power and continue to threaten its neighbors. 

Jonathan Capehart> Madam Secretary, is there any concern that the severe contraction of the Russian economy that you're talking about will have an impact on our European allies or even on the United States itself economically? 

Sec. Janet Yellen> There is certain to be an effect on the United States and also on Europe. But let me say, we have worked very closely with our allies, first of all, to be aligned about the sanctions because that means that they have a much greater effect and we have been united in what we've done and we've designed the sanctions so that they will have the maximum negative effect on Russia while, to the extent possible, shielding the United States and Europe from negative consequences. But will there be some negative consequences? Of course. And I think that's unavoidable. And look, you know, the Russian economy is the 11th largest. Russia is a major exporter of oil and natural gas to Europe. That dependency means that Europe is vulnerable to -- particularly vulnerable to higher energy prices. Russia supplies enough oil to global markets that a reduction in Russian exports, it's already pushed up global oil prices, and we're seeing that ourselves in prices at the pump. National average gas prices have risen in the United States significantly already as a consequence of what's happening with Russia. So, you know, we will do the best we can to shield -- We will do the most we can to take steps to shield Americans and our allies from negative impacts. But this is an atrocity, and it's recognized by Americans and by people all around the world as a step that we cannot let Russia do this without expressing our extreme sanctions for this behavior and to discourage anything in the future. 

Jonathan Capehart> Madam Secretary, the President announced oil and gas sanctions against Russia. What's the likelihood that our European allies will follow suit, considering they are much more dependent on Russian oil and gas? 

Sec. Janet Yellen> Well, as the President said when he announced our sanctions, we recognize that not all countries are in the same position in terms of their ability to cut off shipments of oil and gas from Russia. We're relatively independent. We have very little dependence on Russian oil, and overall we are a net exporter of oil and we're able to do this because of our very strong position. I wouldn't expect most of our European allies to be able to do the same thing. 

Jonathan Capehart> Let me ask you about China. Have you been in contact with your counterpart in China? I'm wondering if President Xi is taking steps to lessen the economic isolation of his ally, President Putin. 

Sec. Janet Yellen> Well, you know, I think that China does buy Russian oil, but I think that our sanctions are limiting Russia's ability to sell to China and other countries as well. Our financial sanctions, even though China is not part of it, my sense is that financial institutions in China that do business in dollars and in euros and are worried about the impact of sanctions don't want to violate sanctions, are very concerned and risk-averse about doing business with Russia as well. So I don't think that what China's doing is meaningfully offsetting or lessening the pressure from the sanctions that we have put in place. 

Jonathan Capehart> Let's turn our attention here stateside. Big news this morning -- Inflation data released in February, 7.9%, the highest it's been in 40 years. Republicans for months have been saying that the rise in inflation, this record rise in inflation, is a result of too much stimulus, that the American Rescue Plan is part of that, it added too much stimulus to the economy. What do you make of that argument? Were they right? 

Sec. Janet Yellen> Well, I think the American Rescue Plan, and this week, we're celebrating the one-year anniversary of it, did a great deal to strengthen the American economy. Just look at the job market. We have one of the strongest job markets that we have seen in this country in a very long time. Americans are easily able to get jobs and feel confident in their ability to move. We're seeing the quit rate reach all-time highs as Americans feel confident about their ability to get better jobs, to move across jobs, to improve their pay and working conditions. It's remarkable that the unemployment rate has fallen more this year than in any year in American history when you consider that we had a double-digit unemployment after the pandemic struck and in a very short time, we're back to normal levels of unemployment, low levels of unemployment. It took almost a decade to achieve that after the financial crisis in 2008. And, you know, we really protected most Americans from severe financial consequences of the pandemic so that they're, by and large, in good financial shape, poised to spend enough to continue propelling solid growth in the U.S. economy, and we're seeing that in the labor market. The pandemic played a big role in inflation. The drop in unemployment, the strengthening in the labor market without the pandemic, it might have had -- put mild upward pressure on inflation. But much of the inflation pressure we're seeing, which is of tremendous concern, it hits Americans hard. It makes them worry about basic pocketbook issues. It is a great concern to us, but I think a lot of it and we're seeing this all around the world, it really stems from shifts that were due to the pandemic. We saw a huge shift away from services toward goods in the United States and much of the global economy. And we quickly encountered bottlenecks, Supply constraints that have made it difficult even though goods production is increased in the United States and globally, moving those goods, transportation costs. We have a shortage of semiconductors that curtailed auto production in the United States. Higher car prices, new and used. Cars account for a third of inflation. I think it's supply chain issues caused by the pandemic and the shift in spending that's really boosting inflation here and around the world. 

Jonathan Capehart> So, Madam Secretary, we're running out of time. I'm going to squeeze in two more questions. With inflation outpacing wages, the majority of Americans are making less now than they were a year ago. What is your message to the American people who don't think the government is doing enough to help them? 

Sec. Janet Yellen> Well, we've done, I think, a lot to shore up the finances of Americans, and I would say that at the lower end of the wage spectrum, wage increases have outstripped price increases. When you think about all the aid that came out of the American Rescue Plan for American families, unemployment insurance, economic impact payments, if you take that into account, Americans have been doing pretty well. But I don't want to say that inflation is not a problem. Inflation is a problem. Longer term, many of the proposals that President Biden has put forward, discussed in the State of the Union, would meaningfully address costs that really burden American households. The cost of child care, the cost of elder care, the cost of healthcare, bring down prescription drug prices. And, you know, inflation is, first and foremost, the job of the Federal Reserve. We have to look to the Federal Reserve to take steps to bring down inflation. And I have confidence the Fed will take the actions that are needed. 

Jonathan Capehart> Madam Secretary, last question -- today is Harriet Tubman Day. She died today in 1913. Harriet Tubman on the $20 bill. When will we actually see it? When will I be able to pay bills in Tubmans? 

Sec. Janet Yellen> 2030. I know it's a long way off. That adheres to the original schedule that was announced in 2014 by Secretary Lew and President Obama. We lost four years during the Trump administration in pushing it forward, but we have made efforts to catch up and we remain on that schedule. You know, there's a huge amount of technology that goes into designing currency to make sure that we have the most modern, sophisticated anti-counterfeiting features embodied in our currency and producing it -- producing currency is a technologically sophisticated matter. But I'm looking forward to seeing Harriet on the $20 in 2030. 

Jonathan Capehart> Janet Yellen, 78th secretary of the United States Treasury, we are out of time. Thank you very much for coming to Washington Post Live. 

Sec. Janet Yellen> Thanks for having me, Jonathan. 

Jonathan Capehart:: Thanks for listening to "Capehart." It's produced by Julie Depenbrock. We'll have new episodes for you every Tuesday. I'm Jonathan Capehart. You can find me on Twitter @capehartj.


https://podcast.posttv.com/vitac-transcripts/95ef0f9a-1b84-4be7-baf5-4941ea8c6fe4_622fa09146e0fb0008b8f783-transcript.txt

Opinion writer Jonathan Capehart talks with newsmakers who challenge your ideas on politics, and explore how race, religion, age, gender and cultural identity are redrawing the lines that both divide and unite America.

Cape Up: a Washington Post opinions podcast

In this conversation recorded on March 10 for Washington Post Live, Treasury Secretary Janet Yellen discusses the effects of sanctions on Russia's economy, record-high inflation and gas prices affecting American consumers.

Treasury Secretary Janet Yellen on how sanctions work to isolate Russia

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