The Waltonian

The idea that Donald Trump does not embody the spirit of the traditional Republican Party is most certainly not an unpopular opinion. In fact, the idea that Trump has appropriated the GOP is one championed by Alexandria Ocasio Cortez, a leading voice among the progressive movement. In 2016, Trump secured the nomination of the Republican Party, but he did not secure the support of traditional Republicans.

Traditional Republicans are often recognizable by their aﬃnity for economic freedom, individual liberty, familial values and the conservation of tradition. The ideas that have been put forth by the Trump administration have conﬂicted with the aforementioned sentiments on numerous occasions. In fact, Lindsay Graham, Republican Senator from South Carolina, was outspoken in his distaste for the Trump campaign since its inception.

Graham is not alone in his rejection of the Trump presidency. Many of the senator’s peers have also rejected the notion that Trump represents the ideology or interests of the Republican Party.

It is widely held that the source of contention is Trump’s poor character, but many prominent Republicans dislike his policy far more than his lack of maturation. In fact, it has been agreeably stated that Trump “ignited” a voting base of previously politically uninvolved individuals. If this is true, then Trump used a historically signiﬁcant organization to advance the ambiguous motivations and ideals of a potential third party.

The ﬁscal policy of the Trump Presidency has been very revealing of the notion that he does not align himself with the ideals of economic freedom. He campaigned on the platform of retrieving American jobs and industry, but cleverly disguised his motivations behind the guise of American success.

His hyper-nationalist and protectionist policy is completely incompatible with the platform of the Republican Party, but he has insightfully justiﬁed his positions with enough political talking points to sound reasonable.

Even with Trump’s policy and character aside, his voting base is something unprecedented in previous years.

Through his clever use of rhetoric, he was able to empower a citizenry that has felt politically disparaged due to the inability to understand heady political banter. Trump successfully capitalized on a group of “uncounted voters” due to his approachability with respect to political stance.

A group of individuals that may have not been involved, or regrettably pledged their allegiance to a party that did not represent their beliefs, is representative of a third party. This same group of individuals also correctly denotes the chief reason for the success of the Trump campaign and presidency thus far.

The notion of a third party has been dismissed by political scientists ever since the two party system became cemented in the foundation of American politics. The idea that a third party could emerge has been critiqued due to the amount of leverage that the current parties have, whether it be as a result of monetary or political support.

If the criticism is that a third party cannot emerge independently, then perhaps the Trump administration approached the process by operating within politically acceptable means. The system that has been established is not conducive to an outside force respectively capturing the votes of either political party, but if one were to operate within the established parties, there is nothing to suggest a candidate cannot become elected.

It is easy to understand that Trump does not represent the interests of the Republican Party, which can be seen from dissent from traditional Republicans.

It is harder to understand how Trump successfully convinced the Republican Party to advance his policy that comes in direct contention with their own goals. But irrespective of the understanding of how Trump has achieved his position, he is the ﬁrst example we can acknowledge as a successfully appointed third party candidate.

The Federal Reserve, or Fed, announced Oct. 15, 2019 that it had agreed to loan 67.6 billion dollars in monetary assistance to banks. The Federal Reserve is the central bank of the United States that is often tasked with ensuring economic stability. The Federal Reserve is made up of un-elected bureaucrats that use monetary policy in attempts to alter the natural eﬀects of the market.

In their most recent decision, the Fed decided that they would loan money to banks in order to ensure the banks have enough money on hand to abide by the lending rules. Typically, if a bank does not meet the reserve, they borrow money from another bank. Sometimes the borrowing occurs overnight, which is why it is often referred to as “overnight lending”. The need for overnight lending signals that banks are consistently unable to meet the reserve standard, and thus, loaning out more than they have within their means.

The policy of borrowing from other banks, and the Fed, is not a new practice. In fact, banks often loan out more than they have in reserve because of the lucrative nature of lending. For banks, making loans means collecting interest on those loans, and in turn, making substantial amounts of money. From an economic standpoint, reserve requirements impede the ability for banks to make more proﬁt. Due to this, banks rely on other banks to meet their reserve requirements at the end of the day because the reward outweighs the risk.

For instance, if a bank’s loan can collect a substantial amount of money in terms of interest, the opportunity cost of not loaning the money exceeds the risk associated with not meeting reserve requirements. While this is an economic decision for banks, it must remain that it is not an entirely economic situation. The Federal Reserve, in trying to promote stability in the lending market, often becomes a safety net for banks that cannot retain enough in reserve requirements.

In fact, critics of the Fed were very outspoken in their distaste for the policy being implemented. Most argued that the lending is representative of the Fed creating a market where banks are “too big to fail,” a sentiment prevalent after the Fed implemented the exact same policy during the 2008 market crash. If the banks have the Federal Reserve to substantiate any lack of liquidity, then they are often more risky in their lending due to the presence of a safety net.

In addition to the monetary policy being implemented in the form of lending on behalf of the Fed, the group has recently issued two cuts to interest rates. The interest rates serve as a rate in which one bank charges another bank for borrowing money during an overnight lend. When the Fed cuts interest rates, it encourages banks to lend because the cost of replacing money is lower.

Critics of this policy have been historically correct in asserting that the Federal Reserve is challenged by the ebbs and ﬂows of a large scale market economy. Due to the fact that economies are contingent on human nature with respect to investment, predictions are often likened to gambling. This, paired with the angst that comes as a result of creating safety nets for large corporations and banks, has created political turmoil in recent years.

Regardless of the eﬀect of the Fed on political relations, the new monetary policy is being viewed as troublesome. The lending pattern is reminiscent of the last recession and economists are warning that the Fed may be far more worried about the economy than what has been reported.

Sources: Business Insider, WSJ