Fed Rejected by Republican Delegates as Wall Street Gets Pass
The U.S. Federal Reserve is bad for the economy, Wall Street has been punished enough for the 2008 financial crisis and the auto bailout was a mistake, according to a survey of delegates to the Republican National Convention.
As Mitt Romney prepares to accept his party’s nomination for president at this week’s convention in Tampa, a Bloomberg News sample of 158 delegates from 10 battleground states shows that his stances are in line with the majority of delegates on some of the biggest questions about federal economic intervention during President Barack Obama’s term.
“The Fed is too independent, they have too much control, their manipulation is not good for a free-market system,” Martin Simmons, 51, a delegate from Milton, Florida, said in a follow-up interview. He said he has more faith in Romney than Obama in choosing economic appointees.
Romney, in an interview last week with Fox Business Network, said if elected he intends to replace Fed Chairman Ben S. Bernanke when his term is up in 2014.
The former Massachusetts governor earlier said he would have let General Motors Co. (GM) and Chrysler Group LLC go bankrupt rather than extend a federal bailout, although he later took credit for recommending a version of the auto restructuring that turned the companies’ fortunes around.
He’s also vowed to repeal the 2010 Dodd-Frank financial- regulatory overhaul.
Voting Against Fed
Sixty-four percent of respondents rated the Fed’s performance as poor and another 30 percent said it was no better than average. Sixty-three percent said the Fed’s independence is a bad thing because the central bank is unaccountable, rejecting the idea that its independence is good because it protects monetary policy from political pressure.
Asked whether enough has been done to hold Wall Street responsible for its part in precipitating the financial crisis, 62 percent said yes -- and that more punishment would hurt the economy by discouraging banks from lending.
Nine in 10 respondents said the automotive bailout was a mistake, despite positive assessments by industry analysts.
“The bailout of GM was with taxpayers’ money, and we’re hurting enough as it is economically,” said Barbara Finger, a delegate from Oconto, Wisconsin, who lost her job as a crew trainer at a fast-food restaurant in April when the establishment closed. “To prop them up when the rest of us are having trouble doesn’t seem right to me,” she said in an interview.
Finger, 56, said she’s “not exactly sure” where Romney stands on the auto bailout. “But I do trust him more because he has real-world business experience.”
As far as Wall Street is concerned, Simmons, the Florida delegate, said he favors words like “oversight” or “accountability” over “punishment” or even “regulation” to describe the government’s proper role.
The questionnaire tapped delegates from Arizona, Colorado, Florida, Iowa, New Hampshire, North Carolina, Ohio, Pennsylvania, Virginia and Wisconsin.
Allen Sinai, chief executive officer of Decision Economics Inc. in New York, said the delegates’ views go beyond ideological positions and reflect a feeling that “the Federal Reserve has systematically been late in the last six years in identifying the risks, the extreme downturn and expecting more than the economy delivered.”
Alan Baum, a principal of Baum & Associates, an automobile- industry analyst in West Bloomfield, Michigan, said the impact of the bailout of carmakers “has obviously been very positive” for suppliers as well as GM and Chrysler.
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