Fed News Friday: Each GOP Presidential Candidate’s Stance on The Federal ReserveDecember 30th, 2011
Here at The Silver Underground, we’re not making any political endorsements (we just want you to check out our awesome, upcoming, animated film!), but with the Iowa Caucus kicking off the 2012 Republican Presidential Primary in mere days, we thought we’d dedicate this week’s Fed News Friday feature to reporting what each remaining Republican candidate thinks about the Federal Reserve and monetary policy. No editorializing here. Just reporting. Here goes:
Mitt Romney on the Federal Reserve
Mitt Romney does not support abolishing the Federal Reserve. He has said that the Federal Reserve is already audited by independent auditors and worries about politicizing monetary policy by giving Congress more authority over the Fed. [Source - starting at 2:00 mark] Mitt Romney has taken different stances on Ben Bernanke and the Federal Reserve’s effectiveness at bolstering the weak economy. He was quoted in a CNBC interview saying:
“I think Ben Bernanke is a student of monetary policy; he’s doing as good a job as he thinks he can do. I’m not going to spend my time going after Ben Bernanke. I’m not going to spend my time focusing on the Federal Reserve.”
Later, Mitt Romney took a different position in a Republican debate, saying:
WILLIAMS: “Would Ben Bernanke have a job in your administration?”
ROMNEY: ” No, I’d be looking for somebody new. I’m — I think Ben Bernanke has — has over-inflated the amount of currency that he’s created. QE2 did not work. It did not get Americans back to work. It did not get the economy going again. We’re still seeing declining numbers in prior quarter estimates as to what the — the growth would be. We’re growing now at 1 percent to 1.5 percent.”
Ron Paul on the Federal Reserve
Ron Paul is the author of a New York Times bestselling book entitled “End the Fed,” in which he argues that the Federal Reserve is corrupt and unconstitutional, levies a hidden tax against Americans, incentivizes open-ended warfare, and threatens to destroy the value of the dollar that it prints through radical inflation of the money supply. These criticisms of the Fed are also a regular feature of Ron Paul’s campaign speeches and answers in presidential debates. Ron Paul believes a monetary collapse of the U.S. dollar due to hyperinflation is imminent, as evidenced by his financial holdings, which consist of mostly gold and silver mining stocks and shorts on the dollar-denominated New York Stock Exchange.
In a speech on the House floor, Ron Paul summarized his views thusly:
“From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused by the housing bubble, every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial ‘boom’ followed by a recession or depression when the Fed-created bubble bursts.”
Newt Gingrich on the Federal Reserve
Gingrich has been calling for reform of the Federal Reserve on the campaign trail, saying that he would like to eliminate one of the Fed’s twin mandates: keeping unemployment in check, in favor of focusing its efforts on its other mandate: price stabilization. Newt Gingrich is on the record supporting an audit of the Federal Reserve and saying:
“The Federal Reserve wasn’t set up to bail out banks and to cut deals, and to hang out with people in New York City. The Federal Reserve was set up to maintain the value of the dollar… We have an agency which is supposed to be an elitist agency, protecting the value of the dollar, which uses its elitism as an excuse to avoid being held accountable.”
Gingrich has also said if elected president, he would ask Ben Bernanke to resign and if the Fed Chairman refused, he’d ask Congress to remove him.
Michele Bachmann on the Federal Reserve
Michele Bachmann is a supporter of a full public audit of the Federal Reserve and co-sponsored Ron Paul’s bill to audit the Fed. In a 2009 op ed, Bachmann wrote:
“Our government’s spending and printing money like it’s being used for a board game, and we’re bailing out Wall Street and Detroit to the tune of billions of dollars, the least the Federal Reserve can do is open up their doors a crack so taxpayers can take a peek at what they’re doing with our money.
As it stands now, the Federal Reserve has very little, if any, accountability to the taxpayer. In the wake of Enron, Congress required corporate America to open its books to their shareholders, yet the Federal Reserve keeps the taxpayers in the dark. They need to be held to the same standard. It’s simply common sense.”
Rick Perry on the Federal Reserve
Rick Perry supports a full public audit of the Federal Reserve, saying “they should open their books up” and “be transparent,” and credits Ron Paul with inspiring his interest in monetary policy and the Federal Reserve’s role in the economy:
The Daily Caller – ‘Asked to compliment a rival, Texas Gov. Rick Perry said on Saturday night that Ron Paul is the reason he started reading up on the Federal Reserve.
“Congressman Paul is the individual on the stage that got me most interested in a subject that I found to be quite interesting and at the root of a lot of the problems that we have, and I thank you for that,” Perry said at the debate.’
In August of 2011, Rick Perry called inflating the currency “treasonous”:
“If this guy [Fed Chairman Ben Bernanke] prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous – or treasonous in my opinion.”
Rick Santorum on the Federal Reserve
It was hard to find very much about Rick Santorum and the Federal Reserve out there. The most I could find was this statement from his website supporting an audit of the Federal Reserve and changing its mandate to focus exclusively on price stabilization:
“Audit the Federal Reserve and return it to its original purpose – a single charter to only manage inflation.”
Jon Huntsman on the Federal Reserve
On the issue of the Federal Reserve, Huntsman has not supported a Fed audit and has suggested that the other GOP candidates’ focus on the Federal Reserve is a sideshow that distracts from fixing the economy and creating jobs. Huntsman’s main concern is reigning in the practice of printing money to bail out banks.
His website states:
‘Jon Huntsman supports a strong and stable dollar. As president, he will appoint Federal Reserve Board Governors and a Chairman who believe in sound money. The United States cannot devalue our way to prosperity and efforts to do so risk a “beggar thy neighbor” round of devaluations, which will ultimately harm American exporters and risk the dollar’s privileged position as the primary global reserve currency.
The main risk to the dollar is that the Federal Reserve will feel empowered to create more money in order to provide bailouts to troubled large firms and deal with the unemployment levels caused by major financial crises. Eliminating “too big to fail” has consequences in terms of making the macroeconomy more stable because it removes a major incentive for the Federal Reserve to run a loose monetary policy.’
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