Plenty of American conservatives are unenthused about the field of Republican presidential candidates for 2012. But some of the contenders should actually worry Wall Street. In particular, former House Speaker Newt Gingrich claims to be a friend to business, but his erratic beliefs create the markets’ truest enemy: uncertainty.
None of this would be an issue if Gingrich didn’t have a shot. But recent polls say he does. Gallup’s GOP ballot tracker shows Georgia native Gingrich leading nationally, three points ahead of former Massachusetts Governor Mitt Romney.
The trouble is that nailing down where Gingrich stands on important economic issues is extremely difficult. For instance, in 2008 when the bank bailout was being considered, he called it socialism and the worst economic policy he had ever seen. Yet he also grudgingly admitted he would have voted for it. As speaker, he supported the Clinton administration’s Mexican peso bailout in the mid-1990s. If another financial crisis hits, say due to euro zone contagion, it’s not clear how a President Gingrich would respond.
What is clear is that Gingrich doesn’t much like the Federal Reserve. He has said he would fire Chairman Ben Bernanke. He believes during the crisis that the Fed purchased far too many assets, most of which were part of its financial sector stabilization effort. When Bernanke’s term expires at the end of 2014, a President Gingrich may nominate an extreme inflation hawk with no interest in economic stability. That is, if his talk isn’t just rhetoric: he appeared to be a big supporter of Alan Greenspan in the 1990s.
Even Gingrich’s views on one of capitalism’s bedrock principles - the rule of law - seem amorphous. He has, for instance, suggested that Congress ignore federal rulings that it disagrees with, and even went so far as suggesting that some judges should be arrested, subpoenaed and impeached. Boil it all down, and the conflicting messages from a President Gingrich spell out one thing for sure - more uncertainty.