Let’s get real: If the Supreme Court were serious about safeguarding Fed independence, they wouldn’t let Donald Trump fire independent agency heads, which is precisely what they did on Monday.
I don’t know about anyone else, but I’m exhausted with this charade. The conservative majority’s complicity in America’s autocratic suicide mission is as plain as the bronzer on Donald Trump’s face.
John Roberts and Brett Kavanaugh apparently believe that by pretending to oppose, on procedural grounds, Trump’s firing of Lisa Cook, they’re contributing to Republicans’ broader, half-hearted effort to keep up democratic appearances. Exactly no one’s buying it.
Unfortunately, I’m compelled to recapitulate (which means quote and paraphrase myself), because you absolutely have to have the context to understand the high court’s Monday rulings.
Last year, while signaling to Trump a willingness to countenance the at-will dismissal of independent agency heads, the court carved out an exception for the Fed using what I described at the time as “torturous” logic. That logic wasn’t just bad, I argued, it was laughably, and perhaps deliberately, derelict.
Specifically, the Court said in May of last year that the Fed’s “a uniquely structured, quasi-private entity.” If the Court overturned Humphrey’s Executor, the 90-year-old precedent that shielded independent agencies, that nebulous distinction would be all that stands between Trump and the Fed board.
My contention was — and continues to be — that the conservative justices were very likely setting the Fed up by cynically penning a carveout riddled with holes.
Elena Kagan all but said as much while chastising her conservative colleagues for turning the emergency docket into an instrument of Trump’s authoritarian impulses.
“The Federal Reserve’s independence rests largely on Humphrey’s… [s]o the majority has to offer a different story,” she said, 13 months ago. “One way of making new law on the emergency docket… turns out to require yet another.”
So, in order to let Trump fire agency heads on an interim basis — i.e., in lieu of overturning Humphrey’s — the conservative majority had to create, as Kagan put it, “a bespoke Federal Reserve exception” which, in my estimation, was designed not to hold up under scrutiny.
Fast forward a year, and the conservatives made it official on Humphrey’s: It’s dead. In a characterization that recalled the plague-ridden man from Monty Python and the Holy Grail, Roberts suggested the ruling merely formalized what was already the case, noting that the precedent had been thoroughly defanged. “If anything more is left of Humphrey‘s, we overrule it,” he wrote. (“I’m not dead yet!” “He says he’s not dead.” “Yes he is.”)
The case applied specifically to FTC commissioner Rebecca Slaughter, but the decision to allow her removal effectively means Trump can fire any independent government agency head or regulator he chooses, for any reason. Or, more to the point, for no reason at all.
Any independent government agency head or regulator except for Fed board members, that is. In the Cook decision, released concurrently, the court reiterated the above-mentioned carveout. To wit, from the decision:
[A]ny definition of “cause” in this context must reflect the Federal Reserve’s unique historical status and role. [T]he Federal Reserve operates at a deliberate remove from the ordinary political process, including a budget free of congressional control and policies set not only by Governors, but also by representatives of the private regional banks. Not only the fact of independence but also the appearance of independence is key to the Federal Reserve’s design. That counsels a substantial threshold for “cause.”
That last bit’s interesting. And also ironic: If Roberts and Kavanaugh, who joined the court’s liberal justices in blocking Cook’s firing for now, truly appreciated the importance of optics for the Fed, they might’ve preserved Humphrey‘s (or whatever was left of it) in the interest of providing for something other than a token nod to the “unique” status of the FOMC.
And yes, I reckon that’s a limb worth going out on in the current circumstances. Even if you didn’t like Humphrey‘s — and the conservatives despised it — it’s been around for nearly a century. What’s another three years if it means providing an extra layer of protection for the people who — drumroll — safeguard the value of the goddamn money? (We’ll set aside, for the purposes of this article, whether those people actually do a good job in that regard.)
Cook’s not out of the woods yet. And that’s really the crux of the matter. All Monday’s decision actually did was chide Trump for denying her due process. As the court put it, “At minimum, Cook was entitled to some explanation of the evidence at issue, some avenue for a response, and a deadline by which a response would be due.”
At the risk of stating the obvious, that’s part and parcel of the rule of law. It says a lot — none of it good — that the Supreme Court has to affirm citizens’ right to due process in the event the President of the United States decides he wants to cook up (no pun intended) an excuse to fire us from our jobs.
Cook will stay on the Fed board while all associated litigation proceeds. Kavanaugh, in a somewhat unnerving passage, emphasized that the ruling is only an “interim” measure, and “does not decide whether the president may lawfully remove Governor Cook for cause.”
In a statement, Cook said Trump’s “attempt[ing] to remove me on a manufactured pretext because I refused to bow to political pressure.” The Fed, she went on, “must make all its policy decisions guided by evidence and independent judgment, free from political interference.”
Bill Pulte, who instigated this whole sordid debacle, said he continues to “believe Lisa Cook will be indicted for mortgage fraud.” As a reminder you probably don’t need, Pulte’s acting Director of National Intelligence now.
I hope this goes without saying, but just in case: No one’s arguing that if Cook committed an actual crime — particularly one with direct bearing on her role as a monetary policysetter — that she should be immune to prosecution for as long as she holds her position.
Only one person’s so audacious as to argue something like that. And only one court so beholden as to acquiesce.
I look forward to Democrats finding cause to fire Supreme Court justices since we’re throwing all precedent and reasonable interpretation of laws out the window anyway.
It truly is amazing to watch “conservatives” gut longstanding precedent and cede authority to the executive. Special shoutout to RBG and Anthony Kennedy who gave them the extra votes to push all these decisions through!
I presume you know that Democrats can’t fire any justices as they are appointed for life under the Constitution. They can be impeached but only after a proper trial and conviction by the House can they be “fired.” It’s never even been tried.
The postal service is a government agency. i see trump appointing bill pulte postmaster general, and pulte then refusing to deliver mail in ballots. The market bottomed right when those supreme court opinions were released fwiw.
Never mind, a friend just alerted me to the fact that the current postmaster is already doing that.
The founding fathers designed the government so that the three branches would provide checks on each other’s power and prevent overreach. What has happened is that the Republican Party has realized that if the branches work together, the party’s power grows. George Washington warned us about this in his 1796 farewell address.
Wealth always wins…
These purely partisan rulings are really disgusting because if the other party held power and tried to execute these actions they would surely turn around and block them.
The 60 year conservative project to turn the Supreme Court into the authors as well as judges of American law has resulted in this monstrosity. One in which the Legislative branch has no power at all, the Executive is omnipotent, and the Judicial uses emergency actions and a shadow docket to enable the Executive’s omnipotence.
Seems to me we may have to start thinking more about celebration (and receration) of July 14th, rather than July 4th.
I’m thinking Kevin Warsh can get off his knees and get some swagger back!
The Roberts Court embraces the Unitary Executive, and its own role as a super legislature.
It’s a good decision. I’ll take the win. And if she lied on her loan app to get a better rate she should be removed. As should all the rest in Congress and the White House, and state, city, county, town and village governments throughout the USA and its territories. Naive? Yeah, but gotta start somewhere. If Humphrey’s said something else, it should be reversed. On the other hand maybe entrepreneurship and all its innovation and productivity depend upon these little lies and deceits. As a successful, experienced Wall Street lawyer once told me; “Just scratch under the surface of any successful company and you’ll find bones are buried there.” Maybe I need to acknowledge that human nature values success to the extent it accepts even successful deceits.
I don’t think you’re naive, I think you’re speaking out loud what many of us feel is the problem. There hasn’t been accountability for powerful people for a very long time. Does that mean every single indiscretion identified and scrutinized? Probably not. But when you lie to the American people about WMD’s and then start two decade+ long wars that costs hundreds of billions of dollars and hundreds of American service members lives, that should require accountability. When you lie to the American people and generate an asset bubble that basically destroys the entire global economy necessitating bailouts in the billions of dollars, there should be accountability. When you allow corporations to destroy the middle class and then give them tax cuts and carveouts because they are the only donor dollars that you care about, there should be accountability.
Now we’re basically in a place where accountability is so dead that there are Watergates happening every few hours and nobody even notices.
“If Humphrey’s said something else, it should be reversed”
You reckon maybe you should spend some time on Google or with ChatGPT figuring out the answer to the question you implicitly posed there?
Further, do you understand what it means to formally overturn that precedent? Have you sat down for, you know, 15 minutes or so and thought through the possible ramifications beyond Trump? If not, I suggest you take that 15 minutes.
Bravo!
Possibly good idea but it is likely to sweep away many members of the Congress with shady loans.