Gold, The Federal Reserve and the Candidates
Ever since Richard Nixon unilaterally took the United States off the gold standard in 1971, re-backing the U.S. dollar with gold and Federal Reserve policy has been raised intermittently in the course of Presidential campaigns. After the inflationary decade of the 1970’s, serious consideration was given to the reinstitution of another gold standard in 1982.
Business man and New York Republican gubernatorial candidate Lew Lehrman and Congressman Ron Paul presented “The Case For Gold” to the U.S. Gold Commission advocating the U.S. return to a gold standard. The plan was never adopted.
Later in 2008 and 2012, Ron Paul made the reconsideration of a gold standard, auditing the Federal Reserve and ultimately “ending the Fed” cornerstones of his unsuccessful presidential runs. Congressman Paul did convince the Republican Party to include in the 2012 party platform a commitment to audit the Federal Reserve.
Here is where the leading 2016 Republican and Democratic candidates stand on the gold standard and the Federal Reserve:
Trump On the Gold Standard
While Donald Trump has spent most of his focus on immigration and trade issues, he has expressed passing support for a gold standard. Last March Donald Trump had this to say on the gold standard in a television interview with Pittsburgh Action News:
“In some ways I like the gold standard and there is something very nice about the gold standard… We used to have a very solid country because it was based on a gold standard and we do not have that anymore…It would be very very hard to do at this point and one of the problems is we do not have the gold – other places have the gold”
In 2011, Donald Trump who normally accepts a certified check as a security deposit for his corporate renters, accepted gold bullion worth about $200,000 as a security deposit from one his tenants at the Trump Building at 40 Wall Street in New York City.
Trump on the Federal Reserve
In the same Pittsburg Action News intereview, Mr. Trump was equivocal on his views on whether the Fed should be disbanded. “We have very conservative Republicans who like the Federal Reserve, we have some who think it should be disbanded. I have no opinion yet. I’ve not really formed an opinion.”
Trump On Auditing the Fed
If Mr. Trump did not have an opinion on the future existence of the Federal Reserve, he certainly had one regarding auditing the Fed. When asked if he favored an audit, he remarked “100%.” When Ted Cruz missed the vote on The Federal Reserve Transparency Act of 2015 introduced by Congressman Ron Paul’s son, Senator Rand Paul of Kentucky, Mr. Trump took to twitter, calling an audit of the Fed “so important” :
It is so important to audit The Federal Reserve, and yet Ted Cruz missed the vote on the bill that would allow this to be done.
— Donald J. Trump (@realDonaldTrump) February 22, 2016
Trump on Fed Policy
Donald Trump has blamed the Fed for creating bubbles and accused Yellen of keeping interest rates low to help the president arguing that low interest rates are bad for the United States and create bubbles. Mr. Trump has also bemoaned the plight of U.S. saver and the impact of the Federal Reserve’s zero interest rate policy. “They worked all their lives to save and now what happens is they’re being forced into an inflated stock market and at some point they’ll get wiped out.”
Cruz On the Gold Standard
Texas Senator Ted Cruz has indicated a desire to return to the gold standard. During a Republican Primary Presidential debate in October of 2015 Mr. Cruz remarked “I think the Fed should get out of the business of trying to juice our economy, and simply be focused on sound money and monetary stability, ideally tied to gold.”
Cruz on the Federal Reserve
During the same Presidential debate, Mr Cruz also indicated that the Fed should be audited due to his “deep concerns” about the entity. Mr. Cruz was a co-sponsor of the Federal Reserves Transparency Act of 2015, but missed the key vote in January 2016 on the measure.
Sanders on the Gold Standard
We were unable to find any public pronouncements of Vermont Senator Bernie Sanders’ views on the gold standard. We would imagine that Mr. Sanders would oppose a gold standard as it might restrict government spending. After all, Mr. Sanders’ platform is rich with government promises from increasing social security, to free health care and free college. A gold standard would restrict the government’s ability to provide further entitlements without hefty tax increases on, not just the “one percent”, but everyone else too.
Sanders on the Federal Reserve
Senator Bernie Sanders co-sponsored a 2009 bill with Congressman Ron Paul to audit the Federal Reserve. In 2010, Mr. Sanders, however, backpeddled and modified his support for the bill to only supporting an audit of the Fed during the financial crisis, but not for general Fed monetary policy, leading to claims of “selling out” by Ron Paul.
Mr. Sanders, however, supported and voted for the Federal Reserve Transparency Act of 2015. While Mr. Sanders supported the bill, it did not get the necessary votes required to move forward with an audit. The Senate voted 53-44 in favor, but the measure failed as sixty votes were needed.
Clinton on the Gold Standard
Hillary Clinton has been in public life for decades as first lady, Senator from New York, Secretary of State and presidential candidate. During this time there is not a readily accessible record of her views on the gold standard. Google searches for “gold” and “Hillary Clinton” are rife with references to investment bank Goldman Sachs where she often performed pay for speaking engagements. The term “gold standard” and Hillary Clinton top search results refer to Ms. Clinton referring to the controversial Trans Pacific Partnership as the “gold standard of trade agreements”.
Clinton on the Federal Reserve
Ms. Clinton doesn’t make the Federal Reserve a topic of her stump speeches. Her views on the Fed, therefore, are not easy to ascertain. More transparent is the amount of money that Federal Reserve employees and officials send to the Clinton campaign. According to a Bloomberg report, Fed employees favored Ms. Clinton by far over other presidential candidates with their donations. Through January 2016, Ms. Clinton has received $18,239 in campaign donations from Fed employees, including $750 (in three separate donations) from Fed governor Lael Brainard.
According to Bloomberg, Senator Cruz has received $2,000, Senator Sanders $1,601, Senator Marco Rubio $750 and Donald Trump $0 from Federal Reserve employees and officials.