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Lisa Cook seems safe from being fired after SCOTUS hearing
Posted on 1/21/26 at 11:42 am
Posted on 1/21/26 at 11:42 am
quote:CNBC
Federal Reserve Governor Lisa Cook’s job seemed safe from firing by President Donald Trump after Supreme Court justices skeptically questioned the Trump administration’s lawyers on Wednesday about the grounds for Cook’s would-be termination and its effect on the Fed’s historical independence.
Justice Brett Kavanaugh warned Solicitor General D. John Sauer about the effects of his argument that Trump could fire Cook or other Fed governors “for cause” — but without judicial review of whether that purported cause was legitimate.
“Your position that there’s no judicial review, no process required, no remedy available, very low bar for cause — that the President alone determines — and that would weaken, if not shatter, the independence of the Federal Reserve,” said Kavanaugh, one of the court’s six conservatives.
4
Posted on 1/21/26 at 11:49 am to bigjoe1
The "auto pen" situation will reverse that.
quote:
Yes, President Joe Biden nominated Dr. Lisa D. Cook, an economist from Michigan State University, to the Federal Reserve Board of Governors in January 2022, making her the first Black woman to serve in that role, with her confirmation by the Senate in May 2022, and she was sworn in later that month.
quote:
Yes, President Joe Biden nominated Dr. Lisa D. Cook, an economist from Michigan State University, to the Federal Reserve Board of Governors in January 2022, making her the first Black woman to serve in that role, with her confirmation by the Senate in May 2022, and she was sworn in later that month.
Posted on 1/21/26 at 11:52 am to bigjoe1
Judicial review of the firing is not the big issue. The issue is whether mortgage fraud is just cause for firing. Newsflash: it clearly is.
Posted on 1/21/26 at 12:01 pm to Riverside
quote:hold on, says SFP let me explain to you plebes case law, statutes and my own keen opinion of legal text to show you how she should actually get a promotion.
The issue is whether mortgage fraud is just cause for firing. Newsflash: it clearly is.
Posted on 1/21/26 at 12:35 pm to bigjoe1
quote:
that the President alone determines — and that would weaken, if not shatter, the independence of the Federal Reserve,”
But on the flip side, having an independent 4th branch of govt within the executive branch weakens the executive. The constitution is very clear that the president is THE chief executive of the executive branch. How can he carry out his constitutional duties as president if he has no input on a department within the executive? The Federal Reserve wields enormous power, so much so that it has the ability to challenge or hamstring the president’s power to enact his economic policy. Where in the constitution does it allow for any part of the executive branch to diametrically oppose the chief executive?
Right now we have a president who wants to lower interest rates as part of his economic policy and we have an institution within the executive essentially telling him to frick off, we get to decide not you. There is no way you can make that structure jive with the constitution because the constitution says the president is the sole source of power within the branch.
Posted on 1/21/26 at 12:39 pm to Blizzard of Chizz
quote:
Where in the constitution does it allow for any part of the executive branch to diametrically oppose the chief executive?
The part about Congressional power.
The real argument is about the attack on Congress's clear power to create these agencies. The Executive will wield no power without this step by Congress.
The more theoretical argument is the executive nature of the agency and what power Congress has to limit/expand this.
Congress could theoretically create a body without the need for direct execution (by specifically crafting the regulations themselves and delegating no power to the Executive).
Posted on 1/21/26 at 12:54 pm to SlowFlowPro
quote:
The real argument is about the attack on Congress's clear power to create these agencies
That’s not the argument. Congress is free to create independent agencies. The argument is does Congress have the power to create an executive agency that can oppose the President’s policy choices in violation of Article II. What we currently have is an entity exercising executive power that is not answerable to the executive.The Constitution is pretty explicit in Article II: “The executive Power shall be vested in a President of the United States of America.” It doesn’t say vested in the President so long as the Fed is cool with it.
Posted on 1/21/26 at 12:58 pm to Blizzard of Chizz
quote:
Congress is free to create independent agencies. The argument is does Congress have the power to create an executive agency that can oppose the President’s policy choices in violation of Article II.
These 2 comments are in conflict with each other.
Any independent agency has the authority to act independently, by default. That's the entire point of the concept. If the President gets to order the agency around, then it is in no way independent.
The Fed is also not a purely executive body.
Posted on 1/21/26 at 1:15 pm to SlowFlowPro
quote:
These 2 comments are in conflict with each other
They are in conflict with each other because the constitution vests the power of the executive branch entirely within the office of the president. When you create an agency like the Fed and place is squarely within the executive and tell the president he has no power over it, you cannot reconcile it with the constitution. It’s not ambiguous language. The president has the power to set economic policy, not the Fed. It’s not a fractional power structure. If the president wants lower interest rates which is within the power of the executive branch, it’s his prerogative. The constitution does not grant the fed ANY power to oppose the chief executive. Congress cannot co-opt the power of the executive and place it into an independent agency because it is not their power to give. The only way to take that power from the president is through a constitutional amendment the explicitly removes it.
Posted on 1/21/26 at 1:19 pm to bigjoe1
quote:
and that would weaken, if not shatter, the independence of the Federal Reserve,” said Kavanaugh, one of the court’s six conservatives.
Having an independent FED is in the Constitution?
Posted on 1/21/26 at 1:23 pm to BeepBopBoop
quote:
Having an independent FED is in the Constitution?
No but having an independent central bank from the treasury is just a standard part of governance. You can look at several countries, like Turkey for instance, where Erdogan keeps insisting that low interest rates will help fight inflation, despite all evidence to the contrary. Inflation in Turkey rose to like 80% but has been trending downward since they finally raised rates in 2023 to 15% I think.
Posted on 1/21/26 at 1:28 pm to crazy4lsu
quote:
No but having an independent central bank from the treasury is just a standard part of governance.
The answer is no so Kavanaugh worried about any perceived need for FED independence is mute.
The FED oversaw record inflation.....I don't see anything in the Constitution that says there is no recourse, no remedy when the FED screws up, just sit and take it.
Who chooses the chairman and the board members? SCOTUS? The House? Nope.
This post was edited on 1/21/26 at 1:33 pm
Posted on 1/21/26 at 1:31 pm to BeepBopBoop
quote:
I don't see anything in the Constitution that says there is no recourse, no remedy when the FED screws up, just sit and take it.
There is a remedy. It's called Congress.
Posted on 1/21/26 at 1:34 pm to BeepBopBoop
It's just a convenient justification to prevent the situation I described. And there are quite a lot of things that aren't in the constitution that we do anyway.
Posted on 1/21/26 at 1:35 pm to BeepBopBoop
quote:
Who chooses the chairman and the board members?
The President...
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