Trumka Says Yellen Better Than Summers for Fed (Transcript)
AFL-CIO President Richard Trumka said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that Federal Reserve Vice Chairman Janet Yellen has a better approach on employment policies than Lawrence Summers and is a better candidate to be the next head of the central bank.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: Welcome back. Richard Trumka joins me now. Thank you for being with me, Mr. Trumka.
RICHARD TRUMKA: Thanks for having me on.
HUNT: It’s Labor Day weekend. The state of organized labor on the appearances don’t look so good. You only have 11 percent of the workforce unionized, about half what it was 30 years ago, not making much progress in Washington, getting clobbered in state legislatures. Is that too bleak a picture?
TRUMKA: Yeah, I think it is. In fact, I feel the opposite. This is - this is one of the Labor Days where I have my most optimism, because, you know, we are being attacked in the states. We are being attacked at the federal level. But workers are coming together like they never have before, and we opened up the process to all of our progressive allies.
We started this six months ago going into our convention, broadening our progressive allies, where we’re thinking together, strategizing together, planning together, and hopefully executing together. And I have real faith that we’ll be able to create an economy that has shared prosperity for everyone.
HUNT: Huge budget battles in October over the debt and deficits. How confident are you that President Obama is going to hang tough and not compromise with some of the Republican demands?
TRUMKA: Well, you know, that’s another contrived or created crisis. There is no crisis here, and I don’t think the Republicans are going to shut down the government.
HUNT: You don’t?
TRUMKA: No, I do not. They can’t afford to. Their - some of their best political people, their best donors are going to get hurt in the process. It hurts the economy. And I don’t think they’re going to do it. It’s -
HUNT: And the same with the debt ceiling, they’re not going to play games with that?
TRUMKA: I think they - I’m not saying they won’t play games. I’m just saying they’re not going to shut down the government over either one of those. They’ll talk through things, and Boehner’s already offered a short-term extension, and we’ll see what happens.
HUNT: Can you replace the sequester?
TRUMKA: Sequester needs to be replaced.
HUNT: It does. Do you think it’ll happen, though?
TRUMKA: I don’t know. I hope so, because it’s having a real -
HUNT: You seem a little doubtful.
TRUMKA: It’s - well, I’m not certain about anything, given this Congress, particularly the Republican side of this Congress. So it’s - I mean not certain of it, but it needs to end, because it’s being a drag on the economy. It’s costing us a lot of jobs; 960,000 jobs next year will be lost because of sequestration. We can’t afford that. There aren’t enough jobs, let alone losing another million.
HUNT: You are a major Obama supporter. He’s been good to you. Four-and-a-half years into this administration, corporate profits are booming, Wall Street is making billions, but wages are stagnant. How much of that responsibility is the president’s?
TRUMKA: I think it’s all of our responsibility. It’s not just the president. It’s all of our responsibility, from the Federal Reserve to Congress not doing what they should do -
HUNT: What more can Obama do to facilitate that?
TRUMKA: I think he can push more on infrastructure. We have an infrastructure that’s falling around us. We’re being less competitive as a nation. I think both parties understand that the infrastructure of the country is essential for our competitiveness in the global economy. They ought to be doing more. That creates jobs. That makes us more competitive. It makes our products more competitive. There’s no reason not to do it, so we need to push that and get pushing on a big scale.
HUNT: Let’s turn to immigration. You are a critical supporter of the immigration bill that passed the Senate. You fashioned the compromise with business over guest workers permitted in this country. Some House Republicans are trying to expand the number of guest workers that was in that Senate bill. In order to get a bill through, is that a negotiable issue?
TRUMKA: Look, there are people on the Republican side that don’t want any bill, so they will try whatever ploy they can to prevent this. There’s only two things stopping this bill from becoming a reality: that’s John Boehner and the House Republicans. They need to get with it.
And if they don’t get with it, they will pay such a price at the polls for the next decade or two that they will regret the day that they didn’t try to provide a pathway for citizenship, they didn’t try to create a broken system that keeps 11 million people in the shadows, 11 million people who are citizens in every way but on paper.
HUNT: And the final - if there is a final bill, the guest worker provision that was in the Senate will be the final provision, you would think?
TRUMKA: That’s a good bill. And both - both business and labor and a number of others are supportive of that.
HUNT: It shouldn’t be changed?
TRUMKA: It should not be changed.
HUNT: You have said earlier that your preference for the chairman of the Federal Reserve, which you mentioned as being critical to the economy, would be Janet Yellen, the current vice chair. Let me ask you this. Larry Summers, who is the leading candidate, according to some reports at least, has said that he thinks that unemployment is every bit as important as fighting inflation. As a matter of fact, he said the last couple years we ought to focus more on jobs and less on the deficit.
What is it about Mr. Summers that you find less desirable than Janet Yellen?
TRUMKA: You know, I never said one was less desirable than the other. I never said that.
HUNT: I’m sorry. I thought you said you preferred Yellen.
TRUMKA: Well, what I said is, if you look at history and their records, she seems to have the edge, she seems to be a better candidate from our point of view, and here’s why. One, when things were going wrong in the economy, in each one of those instances, she predicted them accurately. Larry didn’t. Larry we thought at that time was too close to Wall Street, and it allowed him to jade his thought process.
The second thing is, Janet Yellen has been for a balanced approach to the Federal Reserve. That means that - they have two mandates, fight inflation and create full employment. Larry and everyone before, all the way back to Paul Volcker, have said we’re not going to worry about full employment, we’re only going to worry -
HUNT: But Larry does say he worries about full employment.
TRUMKA: Recently. And I hope that that continues on. And if he becomes the - the chair of the Fed, I hope he continues on and - and aggressively enforces that part of his mandate, as he does the inflation mandate.
HUNT: So, therefore, if Obama were to nominate Summers rather than your preference, which would be Yellen, you wouldn’t oppose the Summers nomination?
TRUMKA: I don’t know. It would all depend on what happens, you know, what’s said and what he’s going to do.
HUNT: All right. A very happy Labor Day to you, Rich Trumka. Thank you so much for being with us.
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