ENTERTAINMENT
09/08/2015 03:26 pm ET Updated Dec 19, 2016

Donald Trump Was Open To Nationalizing The Banks In 2009

The current conservative favorite backed the bailout that helped launch the tea party.

WASHINGTON ― Though it surely won’t matter to his legion of supporters, back in 2009, business mogul Donald Trump supported the bailing out of the banks. Not just that, he suggested he was comfortable with the national government taking them over ― at least temporarily ― as a means of market stabilization.

The comments came during an interview with CNN’s Larry King in April 2009. King, who has since left the network, asked Trump what he thought of the new president, that being Barack Obama. Trump replied that he “really like[d] him” ― which, for any other current Republican presidential candidate, would probably be considered apostasy in its own right. But then Trump went further:

I’m not saying I agree with everything he’s doing. I do agree with what they’re doing with the banks. Whether they fund them or nationalize them, it doesn’t matter, but you have to keep the banks going. Beyond that, I’m not so sure I agree with it, because I ... I am worried, ultimately, about inflation. If you take this much money and keep pouring it into the economy, I worry about what’s going to happen in two years with respect to not only interest rates, but inflation.

 

That a Manhattan-based real estate billionaire supported government help for the financial sector isn’t a mind-blowing marriage of interests. But Trump is now riding a groundswell of conservative grassroots support in his run for the White House. And it was the bailout of the banks that famously contributed to the launch of the tea party movement in late 2008 and early 2009.

A Trump spokesperson didn’t return a request for comment. But on the merits, his doomsaying about a wave of dangerous inflation turned out wrong. Interest rates on Treasury bonds have actually dropped since his interview with King. On April 15, 2009, the day of the interview, a 10-year bond had an interest rate of 2.82 percent. Today, 10-year bonds are at 2.17 percent, according to official government data. A 30-year bond at the time of the interview fetched a 3.66 percent interest rate. Today, that rate has fallen to 2.93 percent.

As for the politics, it’s doubtful Trump gets dinged. He’s already proposed raising tax rates on hedge fund managers, praised the re-opening of relations with Cuba, and suggested he’d keep (but police) the Iran nuclear deal ― all heterodoxy to Republicans; none of which have hurt him in the polls.

And, in a semi-cruel twist of fate, the candidate who probably could be best served by Trump taking a hit for his support of the Troubled Asset Relief Program is the one who is least able to exploit it. Among the top-tier Republican presidential candidates, former Florida Gov. Jeb Bush is alone in having backed the TARP, which his brother, former President George W. Bush, initiated.   

With reporting by Zach Carter

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