Should Wall Street Brace for a Tobin Tax?
A new paper from Nobel laureate George Akerlof — the husband of Treasury Secretary Janet Yellen — provides a powerful clue.
Is U.S. Treasury Secretary Janet Yellen mulling a tax on Wall Street?
Photographer: Al Drago/Bloomberg
Uncertainty about federal economic policy is greater today than any time in the last 40 years. On one hand we have senior policy makers calling for increasing already massive budget deficits, locking in the loosest imaginable monetary policy for the foreseeable future, and boosting taxes on businesses, Wall Street and the rich if inflation rates spike higher. On the other hand we have a President and senior economic officials who are solid members of an alliance among mainstream liberal academic economists and Wall Street executives who have dominated Democratic party economic thinking since the Carter administration.1
In the absence of clear, credible pronouncements by top officials, a recent paper co-authored by Treasury Secretary Janet Yellen’s husband, Nobel laureate economist George Akerlof, may be our best insight into the Biden administration’s intentions. While the paper represents no official policy, it’s telling that Yellen is thanked in the acknowledgements, and Akerlof has collaborated with many Democratic-insider economists in the past.2