The Federal Reserve is an entity that manipulates the economy, distorts financial markets, and benefits the corridors of power in Washington and on Wall Street, yet remarkably the Democrats have been quiet about it. The U.S. central bank and monetary policy may not be among the sexiest topics on the minds of most Americans, but neither are the vacuous polemics spewed out by the remaining candidates in the 2020 primary. Much like the exploding national debt and the bloated federal deficit, the Eccles Building has gotten the cold shoulder – and that is the way it likes it. But if presidential hopefuls were really concerned about folks residing on Main Street, then the Fed would be a crucial target to aim at in this race.
All Quiet in the Democratic Party
A quick search on every candidate’s campaign website shows only one referencing the Fed: Senator Bernie Sanders (I-VT). The socialist senator wants to “Audit the Federal Reserve and make it a more democratic institution so that it becomes responsive to the needs of ordinary Americans, not just the billionaires on Wall Street.” Sure, this is low-hanging fruit that refrains from addressing the meat and potatoes of the Fed, and even potentially exacerbates the problems, but at least it is something.
Unfortunately, the closest the Democrats have gotten to conversing on monetary policy is when they slammed the skin color of the people working at the Fed. Senator Cory Booker (D-NJ) sounded the white male alarm a couple of years ago, writing in a statement that too many minorities are sitting on the sidelines. He wanted more diversity, just not the intellectual kind. Even the Fed is going woke.
Other Democrats have mirrored Booker’s position, refusing to lament on anything remotely serious, whether it is the relaunch of quantitative easing or the bailout of the repo markets. QE4 – an unconventional policy tool of buying long-term assets to drive down interest rates – has the potential to impact all walks of life, from consumers who want to save to retirees who depend on their pensions to live out their senior years. And yet everybody running for president is silent on the issue.
With all this talk of reining in the excesses of the top 1% (or is it the top 0.01% these days?), you would think that the Fed is an easy victory for a party that obsesses over economic justice and income inequality. Yet Dems are the ones resting on the sidelines and turning their attention to entitling men to abortions and spending tens of trillions of dollars the country does not have on vague climate change proposals.
Say what you want about the Republican Party, but at least its candidates in the last three election cycles have brought the Fed to national political discourse. Former Representative Ron Paul (R-TX) made it a key tenet of his campaign, and then he bequeathed the subject to his son’s – Senator Rand Paul (R-KY) – Senate and White House bids. Senator Ted Cruz (R-TX) and President Donald Trump also satisfied the libertarian wings of the GOP by lambasting the Fed.
Follow the Federal Reserve Notes
But why complain about a body that has overwhelmingly donated to the Democratic Party since 1990?
For the last 30 years, most of the Fed’s contributions have gone to the Democrats, though there have been a few years when the money tilted in favor of Republican politicians: 1996, 2012, and 2014. So far in the 2020 election cycle, 98% of donations have been given to the Democrats, up from 89% in 2018 and 95% in 2016. In the last presidential contest, the top recipient was Hillary Clinton. Throughout the primaries, the main beneficiaries of Fed money have been former Vice President Joe Biden, Mayor Pete Buttigieg, Senator Elizabeth Warren (D-MA), and Sen. Sanders, who was also the third-highest receiver of Fed money in 2016. President Trump has been given peanuts so far.
So much for political independence.
Media’s Predictable Assault
While the Democrats have applied duct tape to their mouths, the left-leaning press has complained about President Trump weaponizing the central bank. The business media falsely accuse Trump of threatening the independence of this supposedly sacred body, refusing to acknowledge that all his predecessors coordinated with the Fed to advance their economic agendas, from President Franklin Delano Roosevelt to President Bill Clinton. If there is any scathing rebuke against Trump’s handling of monetary policy, it would be this predictable milquetoast criticism. Of course, you will not hear the real history of the Eccles Building in any of the reportage.
Since its inception more than a century ago, the two-party system has been relatively quiet on the central bank, mainly because the elephants and donkeys are fed by the most powerful institution in the world. The push to audit the Fed has hit a dead end. Why? The Fed is a drug dealer that keeps its customers addicted by injecting a new supply of dollars into Washington through low interest rates and debt monetization. Any time a dependent refuses to be a victim of addiction to the printing press by going cold turkey, the Fed gives him or her another fix. The smartest men in the room remind the junkies of Washington that there is no sense in quitting because, as Louie tells Frankie Machine in The Man With the Golden Arm, “The monkey is never dead, Dealer. The monkey never dies. When you kick him off, he just hides in a corner, waiting his turn.” Move over, San Francisco. Washington is junkie town.
Read more from Andrew Moran.