Chart of the Day: The Federal Reserve Loves Republicans

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.

Republicans may have taken to hating the Fed in recent years, but University of Michigan political scientist William Clark tells us today that the Fed sure loves Republicans. In every single presidential term over the last five decades, interest rates have risen between the beginning and end of Democratic administrations and dropped during Republican administrations:

This is actually even more sinister than it looks. Clark says that, even after controlling for macroeconomic conditions, it appears that “as elections draw near, the Fed adopts a looser monetary policy when Republicans control the White House.” In this, he’s echoing Jamie Galbraith, who wrote a paper in 2007 showing exactly the same thing. In fact, he demonstrated that the Fed systematically intervenes during election years, but in opposite directions depending on which party holds the White House. Controlling for economic conditions, the Fed loosens more than expected when Republicans are seeking reelection and tightens more than expected when a Democrat is seeking reelection.

Of course, this might all just be a big coincidence. I report, you decide.

POSTSCRIPT: Fairness dictates that I acknowledge Ben Bernanke as the exception to this rule. He couldn’t actually lower interest rates for Barack Obama, since rates were already near zero when he took office, but Bernanke has certainly engaged in several rounds of nontraditional monetary easing during Obama’s term.

Of course, fairness also requires me to acknowledge that Republicans have screamed blue murder about this every step of the way, because they’re bound and determined to oppose anything that might help the economy during a Democratic administration.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate