We're years away from the next Presidential Election, but media outlets have been abuzz this week about likely candidates for both the Democratic and Republican Parties in the 2016 Election.
Sure, there are known favorites on each side, like Hillary Clinton and Chris Christie. But remember, in the Democratic Party primaries as late as January of 2008, Hillary Clinton held a commanding 47% to 32% lead over Barack Obama, so a current off the radar candidate could certainly emerge as the eventual candidate on either side as the years progress.
I'm not here to give you advice on which candidates to vote for, and instead what companies to vote for with your dollars, but I'm here "to educate, amuse & enrich." And with Janet Yellen taking the helm of the Nation's central bank, let's take a look at why Libertarian Party isn't the biggest fan of the Federal Reserve.
Source: Flickr / BullionVault.
1. The true end of the gold standard
The Libertarian Party was founded in 1971 by MIT Graduate David Nolan after the Nixon Administration announced it would no longer convert dollars to gold at their official exchange rate, ending the partial gold standard which the U.S. had been on since 1933, allowing the dollar to begin its floating rate which we now know as standard today. From that day forward the Libertain Party has since abdicated for the end of the Federal Reserve as we know it today.
2. Unmet mission
Created in 1913, The Federal Reserve was established by Woodrow Wilson to conduct the monetary policy (overseeing the supply of money) of the US, supervise and regulate banks, contain systemic risks to ensure the financial system is stable, and provide financial support and services to the US Government and financial institutions.
Harry Browne, a Libertarian who ran for President in 1996 and 2000 was quoted as saying, "the Federal Reserve has been an absolute disaster," and believed that the various financial crisis's since then have shown that the Federal Reserve has been unable to "provide the nation with a safer, more flexible, and more stable monetary and financial system," which is its intended purpose.
3. The "too big to fail" reality
During the most recent financial crisis, the Federal Reserve was instrumental in providing the necessary backstops and support of various banks, financial institutions, and even some auto manufacturers in the form of Government bailouts. This helps explain why it has gotten so large. Yet the Libertarian Party stands against such actions because the bailouts are pictures of the government involving itself in private affairs, which it staunchly stands against.
4. A vivid example of big government
The Libertarian Party notes it is "The Party of Principle," and it supports "Minimum Government, Maximum Freedom." When you consider the Federal Reserve sets interest rates which effect every consumer and has assets of north of $4 trillion, it is largely the antithesis of "minimum government."
5. The privatization of the money supply
Although the Federal Reserve is a part of the government, it does act separately from the three primary branches of government -- the legislative, judicial, and executive branches. The Libertarian Party takes issue with this, and believes that the control of money should be given back to Congress, which is what it asserts in the Constitutional mandate.
As with all political parties, there are always two sides of every argument and reasons both for and against certain things, but there is no denying the Libertarian Party is not a fan of the Federal Reserve.
