Engaging in a blame game when it comes to the economy while demanding loyalty to his preferred economic dictates is a trait Trump shares with one of his political idols, Andrew Jackson. It’s a reflection of how both men personalized politics and saw themselves as embodying the American people — at least white Americans. Given these similarities, Jackson’s 1832 campaign may well prove a preview of Trump’s campaign in 2020. If so, it provides a glimpse at how the consequences of blaming the Fed for slower-than-demanded economic growth could well bring Trump down.
During his reelection campaign in 1832, Jackson attacked Nicholas Biddle, president of the Second Bank of the United States, a distant precursor to the Federal Reserve, and like that institution, built to be apolitical. This tactic was perhaps a last-ditch effort when the strong economy Jackson had promised during his 1828 campaign did not materialize. In fact, his only campaign promise articulated in 1828 had been a pledge to pay off the national debt. With his distrust of paper money and sparse comprehension of economics, Jackson became enraged at Biddle, believing the bank president was insufficiently committed to alleviating the debt.
From Jackson’s perspective, Biddle’s inability to follow his wishes was tantamount to being disloyal, not just to him but to the American people who had elected him to the executive office.
Jackson’s anger toward Biddle intensified as Congress passed an early renewal for the bank’s recharter, spearheaded by Henry Clay, Jackson’s leading rival for the presidency. Despite the charter for the bank not being due to expire until 1836, Clay had convinced Biddle to request an early renewal under the belief that either Jackson would be pressured to support it or that his veto would spell the end of his reelection chances.
But this prediction proved badly misguided. Unlike his predecessors, Jackson leaned into the veto, issuing 12 to his six predecessors’ combined 10. Jackson reasoned that as he was the singular man elected by the nation, he had the right to determine the laws for the entire country. He saw no need to defer to Congress, envisioned by the founders as the preeminent branch.
So it was that the vindictive Jackson not only vetoed the bank’s recharter but also sought to humiliate Biddle and destroy the bank. His use of populist rhetoric in his veto message was an integral component of his reelection messaging. Despite being a wealthy plantation owner and slave master, Jackson’s message expressed empathy for the plight of the white working class, and in demonizing the bank provided them with a scapegoat for their feelings of economic victimization. He lamented how “the rich and powerful too often bend the acts of government to their selfish purposes.”
Like Jackson, despite his wealth, Trump’s promises to white working-class Americans in 2016 led them to form the backbone of his support. Yet his policies have largely either hurt them economically, like his many tariffs, or predominantly benefited the wealthy, like his tax cuts. This reality may push Trump to reprise Jackson’s war on the bank, this time fought against the Federal Reserve as a campaign message.
Such a war would provide Trump’s base with a convenient scapegoat for why they haven't gained more economically from his presidency. This would especially be the case if the Federal Reserve raises interest rates at all during the election year.
But there are two crucial distinctions between Trump and Jackson that make such a move riskier for Trump. Jackson did not fear the economy, or an economic slide. Perhaps because of a lack of understanding or simply a disregard for the ramifications of his actions, Jackson dismissed Biddle’s warnings of a recession, which he would have been wise to heed considering that Biddle possessed deep economic knowledge.
In fact, as Jackson built his reelection campaign into a referendum on the bank, he demonstrated a reckless lack of interest in the economic impact of his policies. In the short term, during the 1832 election, especially in more rural and less industrialized areas of the country, the American economy showed signs of instability in response to the uncertainty surrounding the bank’s future. Jackson survived politically, largely because the economic instability wasn’t felt throughout the country, but eventually the damage he’d done brought down his successor, fellow Democrat Martin Van Buren. Van Buren became nicknamed Martin “Van Ruin” because of the Panic of 1837 that was the culmination of the Bank War Jackson conducted during his second term — which killed the Second Bank once and for all.
Trump is clearly far more hesitant about doing anything that could precipitate an economic slowdown. Nonetheless, he shares Jackson’s penchant for populist rhetoric and humiliating those he deems disloyal — including Fed Chair Jerome H. Powell. In an August tweet, Trump described “the horrendous lack of vision by Jay Powell and the Fed.”
And if Trump can’t constrain himself from persisting with such attacks, and they influence the Fed’s policies, he may face more risk than Jackson did. If the economy shows signs of slowing, it will be both widely reported and experienced by American voters. With the 24-hour news cycle, the impact may be more immediately felt than what befell Jackson’s Democrats. Unlike in the case of Jackson, the power of populism may not be enough to fulfill Trump’s wish for reelection.