bank rates

Did Low Interest Rates Affect Your Vote?

Happy Election Day!

Left out of the constant stream of polling data leading up to the presidential election was just what impact record low interest rates might have on whom voters pick to lead the country.

So we thought we’d conduct a little poll of our own (albeit nonscientific) to see whether these terrible rates on certificates of deposit and savings accounts affected your choice.

The president has the most influence on interest rates by whom he appoints to lead the Federal Reserve.

Unfortunately, we don’t know for certain what direction either President Obama or Mitt Romney would take because neither major party candidate has paid much attention to the plight of the saver.

This is a big deal because Federal Reserve policy “is generally related more to who was President rather than to who was Federal Reserve chairman,” Robert Auerbach, a professor of public affairs at the University of Texas at Austin, wrote last month on The Huffington Post.

We can infer Obama approves of Bernanke’s course because he renominated the Fed chairman a couple years back.

And Romney has suggested the Fed’s course of flooding the market with money has been ineffective and inflationary. Romney has stated publicly he wouldn’t reappoint Bernanke after his term expires in January 2014.

That might not matter since, according to The New York Times, Bernanke “has told close friends that even if Mr. Obama wins, he probably will not stand for reelection.”

While Obama has remained silent on deposit rates, Romney has acknowledged the problem for savers, but he hasn’t said whether he’d do anything about it.

In fact, we don’t know whether either man would pick a Fed successor who would try to reverse the position of the Federal Open Market Committee, which is to keep rates extraordinarily low until mid-2015 at the earliest.

Writing here a few months ago, contributor Charles Rechlin said he didn’t see much from either party to indicate a change in policy is coming:

“I’ve found nothing helpful in the Democratic Party platform. The party, in fact, seems unaware that we even have a monetary policy.

“The Republican Party platform talks about inflation, asserting that “the inflation tax … punishes those who save, transfers wealth from Main Street to Wall Street and has grave implications for seniors living on fixed incomes. …

“The platform’s only suggestions to rein in the Fed are audits and a commission to revisit the gold standard.”

So, what do you think?



Did low interest rates impact your choice for president?
View Results

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One Existing Comment
  1. Paul said:
    on November 6th at 11:03 am

    In addition to Romney’s appointment of a more hawkish Fed chairman, Romney’s tax plans would be helpful for savers. According to Romney’s tax plan, he will “Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains.” Not having to pay federal income tax on interest provides a significant help to savers especially when rates are so low.