Yellen says threats to democracy risk US economic growth, an indirect jab at Trump

WASHINGTON (AP) — Treasury Secretary Janet Yellen argues that a fractured democracy can have destructive effects on the economy — an indirect jab at Donald Trump.

Yellen delivered an address Friday in Arizona, using economic data to paint a picture of how disregard for America’s democratic processes and institutions can cause economic stagnation for decades.

Yellen, taking a rare step toward to the political arena, never mentioned Trump, the presumptive Republican presidential nominee, by name in her speech for the McCain Institute’s Sedona Forum, but she hinted at the former president’s potential impact if he regains the White House.

Her remarks serve as a sort of warning for business leaders who may overlook Trump’s disregard for modern democratic norms because they prefer the former president’s vision of achieving growth by slashing taxes and stripping away regulations.

Yellen acknowledged that democracy “doesn’t seem like typical terrain for a treasury secretary,” but she added that “democracy is critical to building and sustaining a strong economy.”

“The argument made by authoritarians and their defenders that chipping away at democracy is a fair or even necessary trade for economic gains is deeply flawed,” she said. “Undercutting democracy undercuts a foundation of sustainable and inclusive growth.” She pointed to a study suggesting that democratization increases gross domestic product per capita by around 20% in the long run.

<bsp-list-loadmore data-module="" class=«PageListStandardB» data-gtm-region=«READ MORE» data-gtm-topic=«No Value» data-show-loadmore=«true» data-gtm-modulestyle=«List B»> <bsp-custom-headline custom-headline=«div»> READ MORE </bsp-custom-headline> <bsp-custom-headline custom-headline=«div»>