Just a week ago we were surprised to find that current Federal Reserve Governor Lael Brainard gave $750 in three contributions to Clinton’s campaign between November and January, according to Federal Election Commission records.

And while Fed officials sometimes identify with either major political party, as Bloomberg correctly notes, "donations to a presidential candidate by a senior policy maker are unusual, particularly at a time when the central bank is trying to guard its independence from politics. The Fed’s authority has been criticized during the campaign, and both Democratic and Republican lawmakers have questioned decisions about regulation and monetary policy."

 

And here is the Republican soundbite for when the Trump campaign shifts to important things like the Fed:

At a time when Federal Reserve officials are making the case that monetary policy needs to be non-partisan and independent, a sitting governor has given money to Hillary Clinton.

 

Hardly a glowing endorsement for the apoliticalness, or for that matter intelligence, of the Fed and as Bloomberg's Craig Torres writes, Brainard’s donations "could provide fuel for Republican narratives about the proximity of the Fed and the board to the Obama administration," said Sarah Binder, a senior fellow at the Brookings Institution who is writing a book about politics and the central bank.

But it is not a "one-off" – very far from it…

Since the 2004 Presidential election, Bloomberg reports that individuals listing the Fed as their employer have made legally capped donations totaling $436,555 to federal candidates, parties and partisan political action committees. Of that, $343,916, or 79 percent, went to Democrats.

And Zero went to Donald Trump…

 

The partisan preference has grown stronger since the 2012 presidential election. Through January, Fed employees in this cycle have contributed $54,235, with 88 percent going to Democrats.

The falling Republican support comes at a time when the central bank is trying to protect its independence from critics in Congress and the top Republican candidates are calling for more scrutiny of the institution.

 

Trump, Rubio and Cruz have all backed legislation that would subject monetary-policy decisions to increased congressional scrutiny. Fed officials have said that would politicize deliberations that should focus purely on economics.

 

“I always felt that sustaining the institution against the political arena was the important thing,” said Robert Smith, who retired in 2011 after working for 43 years at the Dallas Fed.

Another former Fed employee mostly agreed, but added that political outlook can sway economic research.

“If a person leans to being on the liberal side of the political spectrum they’re more likely to favor intervention,” said Daniel Thornton, a former economist at the St. Louis Fed and now an adjunct scholar at the conservative Cato Institute. “You’d like to say it’s all based on facts, but when you talk about macro-economics, the facts are pretty fungible.”

An Un-independent Fed and "fungible facts" – just what we need to centrally-plan an economy!


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