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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello and welcome to another episode of the All Thoughts podcast.

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Speaker 2: I'm Tracy Alloway.

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Speaker 3: And I'm Joe. Wasn't thal Joe.

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Speaker 2: Let me ask you a personal question. Is Alexander Hamilton

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Speaker 2: always right?

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Speaker 3: I doubt it.

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Speaker 4: I have not read the complete works of Alexander Hamilton.

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Speaker 4: My main knowledge of Hamilton musical, No. I was gonna

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Speaker 4: say my matin knowledge of Alexander Hamilton is a Christian

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Speaker 4: Prente's book, Radical Hamilton. But I've also watched the musical,

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Speaker 4: and let me stay at the outset my most controversial opinion.

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Speaker 3: So when that musical came out, it was.

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Speaker 4: A lot of people really liked it, and then a

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Speaker 4: few years later everyone's like, oh, this is lib and cringe.

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Speaker 4: It's a good musical, and it's time for people set

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Speaker 4: aside everything else. It's time for people to accept that

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Speaker 4: in the category of musical theater, which I get, is

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Speaker 4: not to everyone's tastes. And I have some strong opinions

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Speaker 4: on how much of it is bad. It is an

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Speaker 4: upper decile or upper what's the five one quintile musical?

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Speaker 2: Hamilton being a great musical is going to be the

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Speaker 2: most controversial in this entire episode.

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Speaker 3: Okay, that's right.

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Speaker 2: But the reason I bring it up is because a

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Speaker 2: couple of things have happened recently with the US government.

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Speaker 2: So we had a Supreme Court decision that basically like

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Speaker 2: turbo charged the president's ability to fire heads of agencies, right,

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Speaker 2: And then we had another Supreme Court decision that basically

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Speaker 2: carved out an exception for the FED. Right while site

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Speaker 2: this is where Hamilton comes in, while citing the history

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Speaker 2: and tradition of you know, the independence of the Central Bank,

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Speaker 2: Hamilton and Fury and all of that.

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Speaker 4: Right, Like, I think a lot of people, even before

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Speaker 4: this decision, and we did some discussions about this, have

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Speaker 4: this view it's like the FED is different because the

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Speaker 4: FED is different, right that it's like yes, legally or

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Speaker 4: sort of like on a formal written status like why

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Speaker 4: should it be different than the FCC or the FTC, etc.

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Speaker 4: Looks the same. But a lot of people have this

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Speaker 4: intuition that the FED is different because it's different. But

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Speaker 4: when you're like making laws, right, you sort of have

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Speaker 4: to write something down in theory to establish that.

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Speaker 3: In one of the.

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Speaker 4: Things that was stated in the essentially decision, So that

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Speaker 4: Trump couldn't easily remove Lisa Cook, which was really all

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Speaker 4: it said there was they sort of wrote down the

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Speaker 4: thing that makes the FED different, And one of the

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Speaker 4: things they say is like it has a tradition going

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Speaker 4: back to Alexander Hamilton, the Hamilton exception.

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Speaker 2: Right, And I mean, you know, on the one hand,

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Speaker 2: I think you're right. The lot of people would argue

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Speaker 2: that the FED is different because the FED does monetary

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Speaker 2: policy and ostensibly you want an independent central bank. But

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Speaker 2: on the other hand, the FED does a lot of

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Speaker 2: regulatory toos that look a little bit more like an agency.

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Speaker 2: So anyway, we're going to get into all the details

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Speaker 2: of the case and what makes the FED special, I guess,

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Speaker 2: and why the president can now fire people at the

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Speaker 2: FTC or the SEC but not at the Central Bank.

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Speaker 2: We have the perfect guests. We're going to be speaking

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Speaker 2: with levmanand he is of course a Columbia law professor

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Speaker 2: who's been on a number of times before. He also

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Speaker 2: just wrote a paper called the Federal Reserve Exception to

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Speaker 2: the Slaughter Rule.

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Speaker 3: There we go, yep.

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Speaker 2: And we're also going to be speaking with Nathan Tankas

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Speaker 2: he is the president of Notes on the Crises and

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Speaker 2: has been writing a lot about the FED and also

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Speaker 2: government agencies more broadly.

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Speaker 3: And also a repeat, a repeat guess, also a repeat

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Speaker 3: guest friend the pod.

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Speaker 2: All right, so thank you very much for coming back

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Speaker 2: on odd lots.

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Speaker 5: Thank you for having me. And I want to make

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Speaker 5: it very clear at the jump that I am in

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Speaker 5: no way associated with Joe's opinions about Hamilton. It's horrible history,

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Speaker 5: and by association, I'm not going to subscribe to the

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Speaker 5: musical itself is good absent the content, just I respect.

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Speaker 2: Chuck it all out, lev Do you want to disclose

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Speaker 2: your Hamilton musical opinions upfront?

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Speaker 6: I went and I enjoyed it.

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Speaker 3: Okay, that's all you. Okay, that's it. All right, No more,

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Speaker 3: that's that's it.

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Speaker 5: That I might change my mind.

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Speaker 2: All right, Why don't we just begin, like we need

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Speaker 2: a bit of context and background on this, So let's

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Speaker 2: start with something called Humphrey's executor which seems to come

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Speaker 2: up quite a bit in these cases.

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Speaker 3: What is it exactly?

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Speaker 6: Humphrey's Executors is a Supreme Court decision from nineteen thirty

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Speaker 6: five unanimous Supreme Court decision rejecting President Roosevelt's attempt to

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Speaker 6: remove a member of the Federal Trade Commission without cause.

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Speaker 6: And the Court said, Congress passed the law said you

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Speaker 6: can only remove members of the Federal Trade Commission for inefficiency,

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Speaker 6: neglective duty, or malfeasance in office, and you don't have

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Speaker 6: some inherent constitutional authority to override or ignore that law.

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Speaker 6: Now Roosevelt had reason to think he did. The Supreme

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Speaker 6: Court had decided in nineteen twenty six split decision that

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Speaker 6: the president was allowed to fire a postmaster without the

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Speaker 6: consent of the Senate, which the statute required, and Chief

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Speaker 6: Justice Taff wrote this long opinion saying the president has

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Speaker 6: these inherent powers, and everybody interpreted that opinion to mean

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Speaker 6: Federal Trade Commission, you could fire those people. And so

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Speaker 6: Roosevelt was just like, I'm doing what Taff said presidents

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Speaker 6: could do. And the Court was like, no, no, no, no, no.

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Speaker 6: That's okay for a purely executive officer. But we're going

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Speaker 6: to cabin that Meyer's decision. And if the agency or

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Speaker 6: the government official has functions that are quasi judicial or

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Speaker 6: quasi legislative, like the Federal Trade Commission and like a

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Speaker 6: whole bunch of other agencies, then it's totally appropriate for

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Speaker 6: Congress to put limits on the president's power to remove

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Speaker 6: these officers, and the president doesn't have any inherent constitutional authority.

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Speaker 6: Ever since that decision, the presidentialists have been aggrieved. Humphrey's

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Speaker 6: Executor it unfairly limited Myers and this conception of this

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Speaker 6: sort of president who can oversee the whole executive branch.

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Speaker 6: And in a way, what we're experiencing is the great

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Speaker 6: victory of the anti Humphrey's Executor crowd who have been

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Speaker 6: fighting to get back their version of Myers from nineteen

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Speaker 6: twenty six all this time.

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Speaker 2: Can I just ask really quickly so this you know

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Speaker 2: the court decision back then. Did one of the things

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Speaker 2: you hear is like, the reason you don't want the

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Speaker 2: president to be able to fire heads of agencies is

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Speaker 2: because you want some continuity with you know, technical staff

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Speaker 2: who are working at these things, and you don't want

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Speaker 2: a president who, for instance, I don't know, on the

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Speaker 2: night that he's leaving office, just decides to like fire

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Speaker 2: everyone for the incoming president. Did they cite public good

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Speaker 2: or anything in their decision.

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Speaker 6: I can't emphasize this enough. The Meyer's decision was radicalism,

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Speaker 6: and it was the court striking a sort of wild

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Speaker 6: blow at Congress and at the rule of law to

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Speaker 6: say that the president can just override these statutes. And

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Speaker 6: Humphrey's executor was walking back something that the Court really

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Speaker 6: should have never done. And what's gotten sort of overlooked,

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Speaker 6: I think in recent years is the extent to which

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Speaker 6: these by partisan, multi member commissions, the Federal Trade Commission.

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Speaker 6: These are lower case C conservative institutions. They're meant to

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Speaker 6: stabilize the law, to the law, to prevent polarization, to

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Speaker 6: allow people to make long term investments. This is about

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Speaker 6: our capital markets being attractive. And what we do here

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Speaker 6: is we now mean that every four years you can

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Speaker 6: get a major shift in policy. You don't see that

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Speaker 6: anywhere discussed by the majority in the recent cases or

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Speaker 6: by Taft in nineteen twenty six.

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Speaker 5: I do want to tackle the like the specific thing

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Speaker 5: in your question. Basically, what you're referring to is a

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Speaker 5: a kind of policy justification for insulating officers from direct

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Speaker 5: presidential removal. But that's not necessarily the legal framework which

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Speaker 5: in which this is structured. Like you know now, they're

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Speaker 5: obviously policy, it's inextricable. They're policy justifications for various things,

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Speaker 5: but at root it was the question of what legal like,

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Speaker 5: what legal powers does Congress have to structure things in

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Speaker 5: the executive branch without just sort of the direct command

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Speaker 5: of the executive branch. And to bring up that point

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Speaker 5: about Myers and Humphrey's executor, this quasi judicial language and

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Speaker 5: quasi legislative language was an attempt to kind of thread

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Speaker 5: the needle between not fully overturning Myers, but getting the

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Speaker 5: substantive policy thing that you would want to carve out

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Speaker 5: and make and make that more limited. And in a

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Speaker 5: lot of ways that attempt to make a decision where

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Speaker 5: what they wanted, where removal protections were quote unquote consistent

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Speaker 5: with Myers are in some ways why we're in the

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Speaker 5: situation we are in today. And of course we can

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Speaker 5: talk more about that.

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Speaker 6: You know.

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Speaker 4: One of the funny things about this conversation to me

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Speaker 4: is like, Okay, so we have these various governmental entities

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Speaker 4: that sit somewhere between the legislative branch and the executive branch,

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Speaker 4: and one of them is the FED. Now, it just

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Speaker 4: so happens that in this is how I see it,

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Speaker 4: It just so happens that in the world of economics,

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Speaker 4: in the world of academic economics, there is a particular

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Speaker 4: premium that academic economists play on so called independent monetary policy.

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Speaker 4: Is that just sort of a coincidence? Like, you know,

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Speaker 4: I don't know, Like I mean, I imagine.

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Speaker 3: Academics like that.

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Speaker 4: I of all kinds of independent bodies that are outside

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Speaker 4: the realm of quote politics. But it's sort of funny

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Speaker 4: to me that the FED does on some level sit

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Speaker 4: in the same realm as like the Federal Communications Commission. Legally,

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Speaker 4: I don't think that there is the same degree of

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Speaker 4: like it is very important that from a functioning standpoint,

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Speaker 4: communications regulation is independent. You don't hear that same sort

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Speaker 4: of talk the way you hear from academic economists. Is

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Speaker 4: it just sort of a fluke arrangement that the FED

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Speaker 4: sits in the sort of regulatory sandbogs that happens to

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Speaker 4: align with how many purely econ folks think the FED

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Speaker 4: should be set up.

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Speaker 5: I don't think it's a fluke, but I don't think

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Speaker 5: it has actually much to do with laws, an I

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Speaker 5: think it's an ideological thing. I think, you know, as

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Speaker 5: we'll get into in more conversations abou quote unquote history

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Speaker 5: and tradition, there's this invocation of this longer legacy, and

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Speaker 5: we both love and I have huge problems with this invocation.

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Speaker 5: But nevertheless, it is true that there's these institutions, the

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Speaker 5: First and Second Bank of the United States, the Bank

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Speaker 5: of North America, that were founded that had various things

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Speaker 5: that insulated them from presidential or even at times congressional control.

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Speaker 5: And there's of course a huge history of these kinds

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Speaker 5: of these kinds of institutions which people now look back

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Speaker 5: on and call central banks, even though that wasn't the

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Speaker 5: conception of the time in Europe. And you know, economists

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Speaker 5: are very familiar with those histories because they're proto central banks,

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Speaker 5: so that that's what's important in their minds. And economists,

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Speaker 5: you know, if you're theorizing in the nineteen fifties or

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Speaker 5: nineteen sixties, if you're you can in or any of

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Speaker 5: these big economists, it doesn't occur to them to like

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Speaker 5: maybe I should read administrative lawyers. In terms of thinking

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Speaker 5: about how these things are structured. Economists always have this

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Speaker 5: weird thing where they're talking about things that we refer to,

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Speaker 5: but it's different. It's like a different thing in their models,

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Speaker 5: and they're just named the same like a central bank

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Speaker 5: in an economics model is very different than a central

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Speaker 5: bank in actual legal reality. One of the things that

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Speaker 5: I've really emphasized for a number of years about this point,

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Speaker 5: up until these recent Supreme Court decisions, as a legal matter,

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Speaker 5: the Federal Reserve had the weakest protections against removal of

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Speaker 5: any of the independent agencies. And if you thought like

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Speaker 5: that economists cared at all about administrative law, that economists

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Speaker 5: actually thought that these legal protections mattered, you would think

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Speaker 5: that they were advocate for the strongest removal protections being

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Speaker 5: at the Fed. But no one ever cared because it

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Speaker 5: was all this norm thing. You know, in March nineteen

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Speaker 5: fifty one, you know, two people handshake, they release a

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Speaker 5: press release called, you know, the Fed Treasury Accord, and

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Speaker 5: you know, that's good enough for economists, because for economists

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Speaker 5: it's all this sort of like vague credibility stuff rather

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Speaker 5: than legal institutions.

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Speaker 6: I think an important part of a context here is

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Speaker 6: the post Vulcar Shock development in the economics profession of

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Speaker 6: a whole literature that says you need an independent central

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Speaker 6: bank in order to provide monetary stability. And that literature

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Speaker 6: was very influential, and the United States government spent decades,

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Speaker 6: and so to the IMF going around the world and

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Speaker 6: persuading other countries to change their laws to make their

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Speaker 6: central banks independent of their finance ministries. And this is

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Speaker 6: somewhat contingent that this literature created a bit of a

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Speaker 6: dissonance that we were about to say, actually, this thing

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Speaker 6: the United States has been promoting around the world for

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Speaker 6: decades now, it's unconstitutional here in the United States. This

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Speaker 6: created an incredible dissonance. It's not to say that non

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Speaker 6: partisan communications policy isn't important, or that legal stability in

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Speaker 6: our capital markets regulation by having a bipartisan commission structure

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Speaker 6: for the SEC isn't important. It's just that there wasn't

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Speaker 6: this enormous amount of academic attention and then sort of

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Speaker 6: proselytizing globally about it. Nor is there much of a

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Speaker 6: sense here. I think that we already have a very

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Speaker 6: political bureaucracy in the United States, you know, the Treasury Department,

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Speaker 6: layers upon layers of people are political appointments, and in

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Speaker 6: a lot of our other advanced economies, like it's just

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Speaker 6: taken for granted that communications possible is done by civil

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Speaker 6: servants by and large.

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Speaker 3: If I could just ask a quick follow up to that.

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Speaker 4: One of the things that we've heard in the wake

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Speaker 4: of the decision is that if Congress had known that

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Speaker 4: the President would have been able to remove people at

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Speaker 4: will or just automatically fire people from say the FCC

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Speaker 4: or the FTC, they wouldn't have arranged these entities as

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Speaker 4: they did. What was it about these particular realms because

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Speaker 4: other agencies of regulatory responsibilities too, What was it about

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Speaker 4: these particular realms where they thought, it's particularly important that

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Speaker 4: these we have sort of co equal.

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Speaker 3: Ownership al most of them.

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Speaker 6: So the first one of these independent, multi member regulatory

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Speaker 6: commissions was called the Interstate Commerce commem In and Congress

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Speaker 6: created it in eighteen eighty seven. And Congress envisioned it

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Speaker 6: as like a specialized court, because up until that point,

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Speaker 6: railroad regulation was enforced through the federal courts. You would

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Speaker 6: have a bunch of statutes and then you would bring

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Speaker 6: cases against the railroads and federal judges would decide them.

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Speaker 6: And Congress was dissatisfied by the ability of generalist judges

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Speaker 6: to adjudicate these disputes. They came to think, actually, we

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Speaker 6: need specialists who are experts in railroads, who have some

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Speaker 6: understanding of these complex modern markets who are going to

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Speaker 6: develop the law that our common law based system of

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Speaker 6: economic regulation was obsolete. And that's sort of the germ

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Speaker 6: of what became the modern American administrative state with these

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Speaker 6: sort of court like bodies. And so the Federal Reserve Board,

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Speaker 6: which is created in nineteen thirteen, is an interstate Commerce

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Speaker 6: Commission style body for banking. They're supposed to be judges

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Speaker 6: of the banking system who have the ability to adapt

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Speaker 6: the banking law to circumstances case by case in a

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Speaker 6: way that wouldn't work very well if we were to

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Speaker 6: use the federal judiciary and prosecution and have statutes cash

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Speaker 6: down in that manner. And that was how Congress actually

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Speaker 6: came to this, and so communications these are advanced economic

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Speaker 6: sectors that need specialist judgment applied. Of course, through the

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Speaker 6: twentieth century, these agencies evolve, they start to pivot towards

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Speaker 6: rule making, and you know, they do less and less

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Speaker 6: of their policy making through adjudication through case by case.

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Speaker 6: You know, that's an unfair method of competition. Company X,

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Speaker 6: let's have a sort of in house FTC assessment. They

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Speaker 6: start to write general rules and you know, obviously we're

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Speaker 6: very familiar now, like capital rules, that's like a big

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Speaker 6: area where the FED is active. But the stress tests

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Speaker 6: you can think of actually as sort of this type

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Speaker 6: of adjudication. This body was set up four in nineteen

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Speaker 6: thirteen expert judgment does this large bank have enough capital?

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Speaker 6: And that was a judgment that Congress felt was quasi

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Speaker 6: judicial so can't be partisan, there's due process, but sufficiently

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Speaker 6: technical that it wasn't something you wanted. The article three

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Speaker 6: judges trying to figure out I think what LIV brings

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Speaker 6: up really highlights that, like economic motivations and a belief

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Speaker 6: that you're dealing with very advanced economic issues, has primarily

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Speaker 6: been the driver for these multi member independent commissions, And

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Speaker 6: if anything, I would say that that was a weakness

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Speaker 6: that people were especially motivated in that case and less

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Speaker 6: motivated by, say science having an independent framework.

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Speaker 5: I wrote about this in a piece that only published

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Speaker 5: last year, but I wrote for lev in another publication

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Speaker 5: in twenty twenty one where if you look at twenty

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Speaker 5: twenty or twenty twenty one, it's not at all clear

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Speaker 5: that the independence of the Federal Reserve was more important

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Speaker 5: than the independence of the CDC. If we're talking about

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Speaker 5: credible commitments about forward guidance. Those ideas would have been

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Speaker 5: much more helpful and much more important at the CDC

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Speaker 5: than at the Federal Reserve at that time. And furthermore,

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Speaker 5: as of our experience at that time highlighted the ability

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Speaker 5: of say Fauci or whoever, to speak fully independently of

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Speaker 5: the President in articulating what the latest best science of

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Speaker 5: I mean talking in a very literal sense. Hundreds of thousands,

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Speaker 5: potentially millions of thaves the difference, and.

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Speaker 6: Right then Nay then brought up the science because if

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Speaker 6: you were building the government from scratch, in light of

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Speaker 6: the experience we're having right now in the second Trump term,

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Speaker 6: you would think that the way we hand out NIH

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Speaker 6: and NSF grants, which is critical to our research universities functioning,

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Speaker 6: should be independent of partisan politics. But when it was

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Speaker 6: set up, it's just, you know, it's part of the

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Speaker 6: executive branch, and so norms were underguarding that, and so

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Speaker 6: no one had looked closely before, you know, at whether

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Speaker 6: that was the right structure. And so the fact that

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Speaker 6: the FED had this structure that was like the ICC

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Speaker 6: is somewhat historically contingent. At the end of the.

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Speaker 5: Day, Trump's a great stress test, Yeah.

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Speaker 6: Stress test for the constitutional system.

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Speaker 2: Before we go any further, let's just talk about the

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Speaker 2: court's reasoning behind the carve out. Okay, So I'm going

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Speaker 2: to put you on the spot and just ask you

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Speaker 2: to summarize, and then we can ask you a bunch

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Speaker 2: of questions about why why they went that way, but

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Speaker 2: what history and tradition, what did they mean exactly?

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Speaker 6: So they have this case called the United States versus Raheemi,

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Speaker 6: which is a Second Amendment case.

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Speaker 2: And this is the crazy thing. There's like a gun

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Speaker 2: case connected to the independency.

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Speaker 6: Supporting the carve out. So last year, some listeners might recall,

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Speaker 6: some court watchers might recall that there was this decision

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Speaker 6: will Cox where they gave us a single sentence saying

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Speaker 6: sort of indicated to the president, you know, we're kind

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Speaker 6: of looking the other way as you remove all these

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Speaker 6: other government officials, but the Fed will be different. And

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Speaker 6: then that gave rise to the Cook case as a

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Speaker 6: as a four cause removal. They've made some innovations since then,

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Speaker 6: and the big innovation is to bring in Second Amendment doctrine.

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Speaker 6: And the way the Second Amendment doctrine works briefly, is

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Speaker 6: that they understand the Second Amendment meant to be this

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Speaker 6: absolute right to bear arms, and then the question as well,

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Speaker 6: there must be some abrogations of those rights. It's such

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Speaker 6: open text, we can't possibly enforce it that way. How

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Speaker 6: do we know when it's okay to abrogate that?

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Speaker 3: So you're not allowed to nuclear weapons exactly.

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Speaker 6: And so they say, well, we look to the sorts

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Speaker 6: of regulations that took place in the founding period, and

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Speaker 6: then we understand that that is those exceptions are okay,

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Speaker 6: and so there's now Second amendmateur Its prudence has turned

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Speaker 6: into this wild like game with hiring all these early

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Speaker 6: American historians and all these arguments about.

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Speaker 3: What type of firearm rules there.

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Speaker 6: Were in the seventeen eighties to try to decide what

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Speaker 6: analogus Congress is allowed to have or states are allowed

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Speaker 6: to have today. Never mind that this is not how

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Speaker 6: the Second a Mement was understood in the seventeen eighties

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Speaker 6: or any of that. This is all sort of this,

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Speaker 6: This is all recent development in Second Amendment world too,

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Speaker 6: and has created all sorts of weird dynamics. Now the

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Speaker 6: Court's as saying, that's how we're going to understand an

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Speaker 6: exception to our new categorical rule in slaughter that says

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Speaker 6: president can fire any executive officer. And you know, basically

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Speaker 6: everybody in the government is an executive officer. So they

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Speaker 6: need an exception, and they say, oh, we're going to

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Speaker 6: look for you know, is there an analog just like

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Speaker 6: in our second Amendment? You know, is there a history

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Speaker 6: and tradition that's where the language comes from from?

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Speaker 3: Rahemis everyone to the library? Everyone in the library?

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Speaker 6: Is there a history and tradition of this? Okay, there's

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Speaker 6: so many weird things about this, one of which is

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Speaker 6: nobody looked to see if there was a history and

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Speaker 6: tradition for the FTC in the Slaughter case. So they

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Speaker 6: decide that without mentioning this, and then the cookcase they're like, well,

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Speaker 6: you know, let's look to see and then raw law.

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Speaker 6: Here brings us back to Alexander Hamilton VOI La, there

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Speaker 6: is a history and tradition because Alexander Hamilton said independent

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Speaker 6: monetary policy, that's very important. I'm gonna have a.

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Speaker 2: Lot of thoughts, but we must do what Hamilton says.

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Speaker 6: We must do what Hamilton says.

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Speaker 3: I have like a sort of philosophical question.

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Speaker 4: So and maybe I'm going to ask you to put

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Speaker 4: yourselves in the minds of these sort of like executive

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Speaker 4: branch maximalists, and you know, we should probably have one on.

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Speaker 4: We will have one on at some point, But I

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Speaker 4: understand what the letter of the law says, and following

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Speaker 4: the Constitution, advice and consent of the Senate and so

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Speaker 4: forth for all these positions, whether we're talking about just

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Speaker 4: normal cabinet level members or not, if you sort of

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Speaker 4: take the sort of maximalist executive branches, and what is

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Speaker 4: even the defense of the Senate getting to say, no,

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Speaker 4: you can't have that person be your Defense secretary, you

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Speaker 4: can't have your person be your Department of Energy secretary. Like,

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Speaker 4: what is even the logic there at that point? If

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Speaker 4: these are going to be true employees of the president.

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Speaker 6: One real tension in what's known as formalist separation of

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Speaker 6: powers theory is the fact that and they can't they

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Speaker 6: can't really get around this. The Constitution is blending functions

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Speaker 6: across departments as they would have called it back then,

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Speaker 6: not branches all over the place. So you're mentioning the

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Speaker 6: fact that the appointment's power, by the plain tax of

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Speaker 6: the Constitution is shared with the Senate. It's a joint appointment.

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Speaker 6: The vice President of the United States, an executive officer

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Speaker 6: serves as the president of the Senate. The president can

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Speaker 6: veta legislation all over the place. Powers are blended. Formalist

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Speaker 6: separation of powers theory basically accommodates this by saying the

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Speaker 6: constitution structure requires that these powers be completely separated, except

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Speaker 6: where it explicitly says they can be blended.

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Speaker 3: And they can't really.

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Speaker 5: To make a defense of this, so, you know, unitary

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Speaker 5: executive theory voice mind everything. So yeah, the Constitution says

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Speaker 5: that we can't quite get around that. But all they're

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Speaker 5: saying is the appointment is the appointment. So there is

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Speaker 5: a a entry, you know, of course, a proper you know,

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Speaker 5: legislative supervision, and what they are supervising is the entry.

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Speaker 5: It would be absurd to say that like that once

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Speaker 5: he's they've entered the executive branch and have become employees

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Speaker 5: of the president, that the president can't remove them and

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Speaker 5: fire them. There is no removal There is no well

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Speaker 5: there's removal protection, but there is no principle where like

439
00:27:07,119 --> 00:27:10,760
Speaker 5: there's a formal process for the Senate to look over

440
00:27:11,000 --> 00:27:15,800
Speaker 5: oversight of firing firing a cabinet head. So this is

441
00:27:15,880 --> 00:27:19,280
Speaker 5: the only process we have, and you know, the Founders,

442
00:27:19,359 --> 00:27:22,359
Speaker 5: in their infinite wisdom, decided that this was the proper

443
00:27:22,520 --> 00:27:24,720
Speaker 5: role of the Senate in this process.

444
00:27:25,560 --> 00:27:28,399
Speaker 6: Yeah, the tension is just that if you think that

445
00:27:28,480 --> 00:27:32,960
Speaker 6: the president is there to check Congress by executing the

446
00:27:33,040 --> 00:27:35,720
Speaker 6: law as the president sees fit and not as Congress

447
00:27:35,800 --> 00:27:40,440
Speaker 6: forces the president, then you're going to experience attention from

448
00:27:40,520 --> 00:27:44,280
Speaker 6: the fact that the president can't make the appointments the

449
00:27:44,320 --> 00:27:47,879
Speaker 6: president wants to help the president carry out the president's duty,

450
00:27:48,760 --> 00:27:52,399
Speaker 6: the president is stuck getting the Senate to consent, otherwise

451
00:27:52,920 --> 00:27:57,879
Speaker 6: that person can't serve. And that does reflect a sense

452
00:27:58,080 --> 00:27:59,280
Speaker 6: that the president is not.

453
00:27:59,400 --> 00:28:01,560
Speaker 3: Absolute in law execution.

454
00:28:02,520 --> 00:28:06,480
Speaker 6: And you might think that it follows naturally that Congress

455
00:28:06,640 --> 00:28:13,040
Speaker 6: can shape the executive branch through limits on removal, but

456
00:28:13,359 --> 00:28:17,720
Speaker 6: that is what this court just said Congress can't do

457
00:28:17,920 --> 00:28:21,280
Speaker 6: except for the FED. Because let's just go back to

458
00:28:21,320 --> 00:28:24,840
Speaker 6: it for a second. Because Alexander Hamilton thought independent monetary

459
00:28:24,920 --> 00:28:29,480
Speaker 6: policy was important, which is true. But the huge mistake

460
00:28:29,560 --> 00:28:33,639
Speaker 6: that they're making, just a fundamental logical failure here, is

461
00:28:34,240 --> 00:28:37,520
Speaker 6: that the First Bank of the United States, which is

462
00:28:37,560 --> 00:28:42,920
Speaker 6: what Alexander Hamilton was advocating for was a investor owned

463
00:28:43,120 --> 00:28:49,200
Speaker 6: commercial bank. It was not in any way abrogating the

464
00:28:49,320 --> 00:28:54,160
Speaker 6: president's rights to remove executive officers. Nobody at the first

465
00:28:54,200 --> 00:28:56,480
Speaker 6: Bank of the United States was an executive officer. It's

466
00:28:56,560 --> 00:28:59,080
Speaker 6: not a government body, it's not a regulator, it's not

467
00:28:59,240 --> 00:29:03,960
Speaker 6: part of the government. The government originally subscribed to twenty

468
00:29:04,000 --> 00:29:06,440
Speaker 6: percent of the shares but then sold them. It was

469
00:29:06,520 --> 00:29:10,480
Speaker 6: a it was a private commercial bank. And so it's

470
00:29:10,560 --> 00:29:14,520
Speaker 6: just a misapplication of the Second Amendment Rahemia analysis. You know,

471
00:29:14,680 --> 00:29:17,320
Speaker 6: in the Raheemi analysis, you're looking for a restriction on

472
00:29:17,600 --> 00:29:20,280
Speaker 6: gun rights that existed at the founding and trying to

473
00:29:20,400 --> 00:29:23,480
Speaker 6: have an analog. There was no restriction as reflected in

474
00:29:23,520 --> 00:29:26,240
Speaker 6: the Bank of the United States on the president's removal

475
00:29:26,400 --> 00:29:31,440
Speaker 6: power over executive officers. Alexander Hamilton didn't want a government bank,

476
00:29:32,760 --> 00:29:34,840
Speaker 6: and that in his report on a national bank, he

477
00:29:34,960 --> 00:29:36,960
Speaker 6: says a government bank is a bad idea. We need

478
00:29:37,040 --> 00:29:41,400
Speaker 6: an invest your owned bank. And so they're just they're

479
00:29:41,480 --> 00:29:42,520
Speaker 6: misreading Hamilton.

480
00:29:42,920 --> 00:29:43,080
Speaker 1: Well.

481
00:29:43,160 --> 00:29:46,400
Speaker 2: On a related note, so Hamilton says that we need

482
00:29:46,560 --> 00:29:49,200
Speaker 2: independent monetary policy, right, but I don't think he says

483
00:29:49,240 --> 00:29:53,560
Speaker 2: we need independent banking regulation at any point in time,

484
00:29:53,600 --> 00:29:56,240
Speaker 2: because I don't think we really had a banking regulator

485
00:29:56,760 --> 00:29:58,160
Speaker 2: back then, didn't.

486
00:29:57,920 --> 00:30:01,800
Speaker 5: Have bank Yeah, exactly, And that's a really important point. Yeah,

487
00:30:01,880 --> 00:30:04,400
Speaker 5: the first bank really is the Bank of North America,

488
00:30:04,920 --> 00:30:08,480
Speaker 5: which is a state chartered institution that it gets like

489
00:30:08,600 --> 00:30:12,160
Speaker 5: actually multiple state charters and sort of like stitches together

490
00:30:12,360 --> 00:30:15,719
Speaker 5: a monetary power out of that very articles of confederation.

491
00:30:17,160 --> 00:30:20,240
Speaker 5: That's another point. It was founded before the Constitution, and

492
00:30:21,000 --> 00:30:23,200
Speaker 5: you only start getting banks of New York and all

493
00:30:23,240 --> 00:30:26,120
Speaker 5: this stuff in the eighteen nineties, and like you don't

494
00:30:26,160 --> 00:30:30,080
Speaker 5: get you know, general incorporation for state chartered banks until

495
00:30:31,080 --> 00:30:34,880
Speaker 5: they have the late eighteen thirties, and so it's a

496
00:30:34,960 --> 00:30:38,160
Speaker 5: total miss Like it's a total misunderstanding. And as you're

497
00:30:38,200 --> 00:30:41,680
Speaker 5: pointing out all sorts of things, security regulation, financial regulation

498
00:30:42,160 --> 00:30:45,480
Speaker 5: is cut out of history and tradition by virtue of

499
00:30:45,600 --> 00:30:48,920
Speaker 5: just like that was the developmental point of the seventeen eighties.

500
00:30:49,400 --> 00:30:52,240
Speaker 2: Well, what I was getting at is, Okay, you have

501
00:30:52,440 --> 00:30:57,520
Speaker 2: this decision citing Hamilton on monetary policy. You don't have

502
00:30:58,320 --> 00:31:01,880
Speaker 2: anything to back up the sort of like regulatory aspect

503
00:31:01,960 --> 00:31:04,120
Speaker 2: of it. So could we end up in a situation

504
00:31:04,320 --> 00:31:08,120
Speaker 2: where someone ends up saying that actually, the FED has

505
00:31:08,360 --> 00:31:13,640
Speaker 2: improper authority over regulation and not monetary policy.

506
00:31:13,720 --> 00:31:14,480
Speaker 5: They're already saying it.

507
00:31:14,680 --> 00:31:17,680
Speaker 6: Yeah, So there are people saying that. Here's the tricky situation.

508
00:31:19,320 --> 00:31:22,920
Speaker 6: The Federal Reserve Board of Governors, which is the seven member,

509
00:31:23,160 --> 00:31:27,080
Speaker 6: multi member commission that Congress created in nineteen thirteen, which

510
00:31:27,680 --> 00:31:31,520
Speaker 6: is a government body whose officers are principal officers of

511
00:31:31,600 --> 00:31:35,960
Speaker 6: the United States, who have limits on their removal that

512
00:31:36,080 --> 00:31:38,480
Speaker 6: the President the Court has now said has to respect.

513
00:31:39,560 --> 00:31:44,320
Speaker 6: That body is not a bank. It has no balance sheet.

514
00:31:44,480 --> 00:31:48,040
Speaker 6: It can make no loans. It does not have what

515
00:31:48,120 --> 00:31:50,080
Speaker 6: we think of as the Fed's balance sheet. It can

516
00:31:50,200 --> 00:31:54,600
Speaker 6: make no loans. It is a government agency and it

517
00:31:55,240 --> 00:32:03,920
Speaker 6: regulates banks, and it conduct quote unquote monetary policy, which

518
00:32:03,960 --> 00:32:06,360
Speaker 6: is overnight interest rate policy. That's how the Federal Reserve

519
00:32:06,480 --> 00:32:12,680
Speaker 6: pursues its section to a mandate currently through regulation of

520
00:32:13,000 --> 00:32:17,480
Speaker 6: the Federal Reserve Banks, which are government chartered banks, but

521
00:32:17,560 --> 00:32:21,720
Speaker 6: they're nominally outside of the government. They're membership cooperatives owned

522
00:32:21,800 --> 00:32:24,880
Speaker 6: by the investor owned banks like JP Morgan Chase. So

523
00:32:25,000 --> 00:32:27,480
Speaker 6: the Federal Reserve Bank of New York that is a

524
00:32:27,560 --> 00:32:31,040
Speaker 6: bank that is outside of the government. The Federal Reserve

525
00:32:31,080 --> 00:32:34,160
Speaker 6: Board of Governors, that is a government regulator that is

526
00:32:34,400 --> 00:32:38,640
Speaker 6: inside of the government. And all the Board of Governors

527
00:32:38,680 --> 00:32:41,280
Speaker 6: does is regulate stuff, and so it carries out monetary

528
00:32:41,320 --> 00:32:46,160
Speaker 6: policy through regulations, and it also does bank regulations, but

529
00:32:46,320 --> 00:32:50,520
Speaker 6: those are all monetary policy in a broader sense. They're

530
00:32:50,600 --> 00:32:58,400
Speaker 6: not used to adjust monetary conditions for macroeconomic reasons generally,

531
00:32:58,480 --> 00:33:01,000
Speaker 6: but they could be. And currently what the what the

532
00:33:01,280 --> 00:33:07,200
Speaker 6: Trump administration is doing is relaxing the equity capital requirements

533
00:33:07,240 --> 00:33:11,480
Speaker 6: on banks. This is stimulative. This is monetary stimulus. That's

534
00:33:11,520 --> 00:33:13,680
Speaker 6: not why they're doing it, but it is stimulating the

535
00:33:13,760 --> 00:33:16,960
Speaker 6: economy right now. And the Court has no easy way

536
00:33:17,000 --> 00:33:19,360
Speaker 6: out of that, which is why you have this weird

537
00:33:19,400 --> 00:33:24,520
Speaker 6: footnote six in the Cook opinion. Yeah, there's a lot

538
00:33:24,600 --> 00:33:27,320
Speaker 6: of great weird footnotes in these opinions, and footnote six

539
00:33:27,440 --> 00:33:31,080
Speaker 6: the you know, Chief Justice Roberts, you know, is saying, well,

540
00:33:31,920 --> 00:33:34,480
Speaker 6: our exception for the FED is, as the Federal Reserve

541
00:33:34,560 --> 00:33:37,960
Speaker 6: is currently constituted and with its existing enforcement authorities, it's

542
00:33:38,080 --> 00:33:42,000
Speaker 6: just just to head off at the pass. The idea

543
00:33:42,160 --> 00:33:44,520
Speaker 6: that well, let's go power by power and see whether

544
00:33:44,600 --> 00:33:47,920
Speaker 6: these are actually each power the FED has is like

545
00:33:48,440 --> 00:33:53,440
Speaker 6: consistent with Alexander Hamilton's vision, because if you start doing that,

546
00:33:53,640 --> 00:33:56,760
Speaker 6: like things start to get really messy and confusing.

547
00:33:56,520 --> 00:33:58,640
Speaker 5: And Clarton Thomas does that. I do want to pick

548
00:33:58,720 --> 00:34:01,560
Speaker 5: up since you said the balance sheet thing, and before

549
00:34:01,600 --> 00:34:04,480
Speaker 5: we started, Tracy asked for like really getting into the

550
00:34:04,520 --> 00:34:07,640
Speaker 5: secretion details, and this is like a big hobby horse

551
00:34:07,680 --> 00:34:10,520
Speaker 5: of mine, as you know, to really like emphasize the

552
00:34:10,640 --> 00:34:14,359
Speaker 5: point that Leve is making. So you know, I cut in, well,

553
00:34:14,400 --> 00:34:16,000
Speaker 5: they do have a balance sheet, And what I meant

554
00:34:16,080 --> 00:34:20,800
Speaker 5: by that was is technically speaking, the Federal Reserve Board

555
00:34:21,560 --> 00:34:27,720
Speaker 5: is and subsequently also the FMC is funded by assessments

556
00:34:27,880 --> 00:34:30,400
Speaker 5: on the Federal Reserve Banks, so you can kind of

557
00:34:30,440 --> 00:34:33,040
Speaker 5: think of it as similar to the assessments for the

558
00:34:33,160 --> 00:34:36,880
Speaker 5: FDIC Fund, but instead of it being on commercial banks,

559
00:34:36,920 --> 00:34:40,120
Speaker 5: it is on the Federal reserve banks themselves, and so

560
00:34:40,280 --> 00:34:43,000
Speaker 5: they have these assessments and they can determine the assessments

561
00:34:43,040 --> 00:34:45,919
Speaker 5: at wherever they want. And this is really actually really

562
00:34:45,960 --> 00:34:49,560
Speaker 5: important because one of the most unique thing about the

563
00:34:49,960 --> 00:34:56,839
Speaker 5: Federal Reserve Board is its complete h it's complete autonomy

564
00:34:56,920 --> 00:35:00,560
Speaker 5: from the appropriations process. And the basis of that complete

565
00:35:00,600 --> 00:35:04,800
Speaker 5: autonomy is when they want more funds. They have complete

566
00:35:04,840 --> 00:35:08,920
Speaker 5: autonomy to raise the assessments on the Federal Reserve banks. Now,

567
00:35:09,000 --> 00:35:10,840
Speaker 5: formally this is an assessment. You kind of think, oh,

568
00:35:10,880 --> 00:35:13,279
Speaker 5: we're just taking some money from here, taking for money there.

569
00:35:13,800 --> 00:35:16,640
Speaker 5: But if you think about it, the Federal Reserve banks

570
00:35:16,640 --> 00:35:20,400
Speaker 5: are creating money. And so whenever they hit in an

571
00:35:20,400 --> 00:35:25,360
Speaker 5: assessment and order up some order up some more assessment payments,

572
00:35:25,520 --> 00:35:29,399
Speaker 5: they're essentially directing the Federal Reserve Banks to create money

573
00:35:29,840 --> 00:35:32,759
Speaker 5: and credit the Federal Reserve Board's bank account. The Federal

574
00:35:32,760 --> 00:35:35,480
Speaker 5: Reserve Board has a bank account with the Federal Reserve

575
00:35:35,560 --> 00:35:39,480
Speaker 5: Bank and runs its spending, pays its payroll out of that,

576
00:35:39,880 --> 00:35:42,839
Speaker 5: and that's what keeps it complete. Separation, keeps the own

577
00:35:42,920 --> 00:35:45,040
Speaker 5: b out, keeps the White House out. And this has

578
00:35:45,040 --> 00:35:47,680
Speaker 5: been a recurring argument where literally was like, well, if

579
00:35:47,680 --> 00:35:49,600
Speaker 5: you don't do this, they won't be able to They

580
00:35:49,680 --> 00:35:51,360
Speaker 5: might not they might run out of the budget to

581
00:35:51,440 --> 00:35:54,239
Speaker 5: process checks. We want them to process check So we've

582
00:35:54,280 --> 00:35:57,840
Speaker 5: got to give them unlimited freedom from appropriations. And that

583
00:35:58,080 --> 00:36:02,759
Speaker 5: unlimited freedom of appropriations was obviously founded on being independent

584
00:36:02,840 --> 00:36:07,840
Speaker 5: of the president. Because if you have unlimited freedom from appropriations,

585
00:36:08,400 --> 00:36:12,120
Speaker 5: and you can and you have direct control of the

586
00:36:12,239 --> 00:36:15,359
Speaker 5: Federal Reserve Board. It's not the Federal Reserve banks. It's

587
00:36:15,400 --> 00:36:18,279
Speaker 5: literally the board part where you can just raise assessments

588
00:36:18,360 --> 00:36:21,359
Speaker 5: as you want and spend, spend, spend. So there's been

589
00:36:21,360 --> 00:36:24,440
Speaker 5: a big hobby burst that they kind of have total

590
00:36:24,520 --> 00:36:29,000
Speaker 5: freedom of fiscal policy notionally over their operational expenses. But

591
00:36:29,120 --> 00:36:31,240
Speaker 5: that can be, of course defined in all sorts of ways.

592
00:36:31,440 --> 00:36:34,279
Speaker 4: This sort of is a nice brings me to the

593
00:36:34,400 --> 00:36:38,520
Speaker 4: question that I had on my mind. So can a

594
00:36:38,600 --> 00:36:40,759
Speaker 4: random person file a front of the court brief like

595
00:36:40,920 --> 00:36:42,080
Speaker 4: or do you have to be like a lawyer or

596
00:36:42,120 --> 00:36:43,960
Speaker 4: something like that? Could I have could one of us

597
00:36:44,080 --> 00:36:45,920
Speaker 4: like file an amicus.

598
00:36:45,680 --> 00:36:48,239
Speaker 6: Curity law to represent you?

599
00:36:48,680 --> 00:36:52,280
Speaker 4: So let's say this comes up again. Here's an argument.

600
00:36:52,360 --> 00:36:55,440
Speaker 4: Let's say I want to find a car voute and

601
00:36:55,560 --> 00:36:57,919
Speaker 4: I want to find something more compelling than this weird

602
00:36:58,160 --> 00:37:03,200
Speaker 4: second Amendment thing. What is wrong with the argument that says, look,

603
00:37:03,520 --> 00:37:07,279
Speaker 4: regulatory policy is monetary policy, so there's no separating those

604
00:37:07,360 --> 00:37:10,000
Speaker 4: because they've read the FED and bound central banking and

605
00:37:10,120 --> 00:37:16,960
Speaker 4: time of crises by livingment on and monetary policy can

606
00:37:17,080 --> 00:37:20,360
Speaker 4: be recast as a quasi fiscal policy. We see it

607
00:37:20,640 --> 00:37:25,280
Speaker 4: in various ways in which loans get directed to specific sectors.

608
00:37:25,320 --> 00:37:28,880
Speaker 4: We certainly saw that during COVID, we saw the rescue

609
00:37:28,920 --> 00:37:33,239
Speaker 4: of Silicon Valley Bank, et cetera. Monetary policy alone, and

610
00:37:33,680 --> 00:37:35,839
Speaker 4: you know, there are ways to structure loans that are

611
00:37:35,960 --> 00:37:40,560
Speaker 4: essentially fiscal allocations. There's not a bright line between monetary

612
00:37:40,600 --> 00:37:44,080
Speaker 4: and fiscal policy. We've clearly established that the power of

613
00:37:44,160 --> 00:37:45,920
Speaker 4: the purse rests in Congress.

614
00:37:46,040 --> 00:37:46,960
Speaker 3: This is a known thing.

615
00:37:47,680 --> 00:37:51,920
Speaker 4: Why not make an argument that no monetary policy is

616
00:37:51,960 --> 00:37:56,239
Speaker 4: fiscal policy. Fiscal policy is Congress, and therefore it's just

617
00:37:56,400 --> 00:37:58,000
Speaker 4: not like these other things.

618
00:37:58,120 --> 00:37:59,840
Speaker 3: So I suggested that the court do this.

619
00:38:00,080 --> 00:38:03,200
Speaker 6: And a lar View article that I guess was published

620
00:38:03,280 --> 00:38:08,080
Speaker 6: about may first called the unitary executive in the Federal Reserve.

621
00:38:09,040 --> 00:38:12,360
Speaker 6: What is distinctive about the Federal Reserve Board, and this

622
00:38:12,520 --> 00:38:16,480
Speaker 6: does tie exactly to what Nathan was saying, is that

623
00:38:17,080 --> 00:38:21,680
Speaker 6: its independence implicates the ability of the legislature to use

624
00:38:21,800 --> 00:38:23,960
Speaker 6: the power of the purse to check the executive, which

625
00:38:24,080 --> 00:38:28,040
Speaker 6: was actually at the heart of the framer's understanding of

626
00:38:28,080 --> 00:38:32,120
Speaker 6: the separation of powers. Alexander Hamilton said, we're going to

627
00:38:32,160 --> 00:38:34,520
Speaker 6: be safe under this constitution because the sword is in

628
00:38:34,600 --> 00:38:36,400
Speaker 6: one hand and the purse is in the office, we.

629
00:38:36,440 --> 00:38:40,920
Speaker 4: Could clearly, like if it were entirely under the president completely.

630
00:38:41,840 --> 00:38:44,680
Speaker 4: We know from COVID, we know from the GFC, we

631
00:38:44,800 --> 00:38:47,120
Speaker 4: know from Miss VB, we know from other things that

632
00:38:47,239 --> 00:38:50,480
Speaker 4: there would be all kinds of ways to structure things

633
00:38:50,640 --> 00:38:54,400
Speaker 4: under the form of lending and loans and nominal monetary

634
00:38:54,480 --> 00:38:57,000
Speaker 4: policy that could have fiscal functions.

635
00:38:57,200 --> 00:38:58,839
Speaker 5: Yeah, I mean I've been getting to this a lot

636
00:38:59,160 --> 00:39:01,960
Speaker 5: of the last few years and trying to get memos

637
00:39:02,040 --> 00:39:06,040
Speaker 5: and justifications from this from the FED and specifically from

638
00:39:06,080 --> 00:39:09,000
Speaker 5: the Federals or Bank of New York and specifically around

639
00:39:09,080 --> 00:39:12,279
Speaker 5: Like it's very under talked about, but they made a

640
00:39:12,400 --> 00:39:15,640
Speaker 5: lot made use of a lot of non recourse loans,

641
00:39:16,239 --> 00:39:20,920
Speaker 5: and a non recourse loan is just you know, if

642
00:39:20,920 --> 00:39:23,279
Speaker 5: you're making a lot of recourse loan and it's much

643
00:39:23,360 --> 00:39:26,680
Speaker 5: above the current asset value, it's essentially a purchase, and

644
00:39:27,280 --> 00:39:30,640
Speaker 5: that power is extraordinary high. Like there's nothing on the

645
00:39:30,680 --> 00:39:35,600
Speaker 5: books that could prevent a unitary executive FED from making

646
00:39:35,840 --> 00:39:39,520
Speaker 5: non recourse loans or where they're beeutifully accepting it as

647
00:39:39,600 --> 00:39:44,040
Speaker 5: collateral for Trump coins and just buy Trump points, you know, out.

648
00:39:44,040 --> 00:39:48,760
Speaker 6: Deeply threatens the actual constitutional scheme to let the president

649
00:39:49,120 --> 00:39:54,080
Speaker 6: have access to the money printing machine. And Alexander Hamilton

650
00:39:54,400 --> 00:39:58,520
Speaker 6: was referencing this, and this goes back really to like

651
00:39:58,719 --> 00:40:02,840
Speaker 6: Magna karda, the Anglo American legal tradition, the idea that

652
00:40:02,960 --> 00:40:05,799
Speaker 6: the way we ensure we don't have a tyrannical executive

653
00:40:06,280 --> 00:40:10,560
Speaker 6: is that the legislature controls access to supply. And Sir

654
00:40:10,640 --> 00:40:14,080
Speaker 6: Paul Tucker, the former Deputy Governor of the Bank of England,

655
00:40:14,200 --> 00:40:18,160
Speaker 6: has been making this argument for many years now that

656
00:40:18,800 --> 00:40:22,440
Speaker 6: that's really the logic. Now, why didn't the court embrace it?

657
00:40:22,480 --> 00:40:25,000
Speaker 6: Why didn't the court embrace it? Well, one problem is

658
00:40:25,320 --> 00:40:28,880
Speaker 6: it's really inconsistent with their theory of the constitution separation

659
00:40:29,000 --> 00:40:32,880
Speaker 6: of powers, which is a formalist theory, because it says

660
00:40:33,360 --> 00:40:39,280
Speaker 6: things that impede functionally on Congress's power of the purse, well,

661
00:40:39,800 --> 00:40:42,759
Speaker 6: we can't allow the president to control them. Well, you know,

662
00:40:43,040 --> 00:40:45,160
Speaker 6: the Board of Governors of the Federal Reserve System isn't

663
00:40:45,200 --> 00:40:49,680
Speaker 6: the only part of the federal bureaucracy that implicates Congress's

664
00:40:49,760 --> 00:40:53,640
Speaker 6: power of the purse. And so there's a very important

665
00:40:54,320 --> 00:40:57,720
Speaker 6: Supreme Court case from the nineteen eighties called Bauscher v. Sinar,

666
00:40:57,760 --> 00:41:01,960
Speaker 6: which was about the emergency deficit reduction where Congress was

667
00:41:02,040 --> 00:41:05,320
Speaker 6: trying to ensure that the government didn't spend over certain

668
00:41:05,400 --> 00:41:08,520
Speaker 6: spending levels to help bring down the deficit in the

669
00:41:08,600 --> 00:41:11,080
Speaker 6: nineteen eighties, and as part of that law, and it

670
00:41:11,160 --> 00:41:15,000
Speaker 6: was a bipartisan compromise with the Reagan administration, an officer

671
00:41:15,120 --> 00:41:19,080
Speaker 6: called the Controller General, who the president cannot remove at will,

672
00:41:19,640 --> 00:41:23,160
Speaker 6: was given the authority to calculate certain caps. And the

673
00:41:23,280 --> 00:41:26,600
Speaker 6: Court struck that down said the Controller General cannot have

674
00:41:26,760 --> 00:41:30,920
Speaker 6: that power because that's an executive function and this is

675
00:41:30,960 --> 00:41:34,160
Speaker 6: an officer the president doesn't have the right remove it.

676
00:41:34,160 --> 00:41:36,440
Speaker 6: And during that period, people thought we were going to

677
00:41:36,480 --> 00:41:38,239
Speaker 6: have a resurgence of Miyers, so we just had in

678
00:41:38,320 --> 00:41:40,200
Speaker 6: slaughter they thought was going to happen in the eighties.

679
00:41:41,680 --> 00:41:44,200
Speaker 6: And the Court is committed to that they don't want

680
00:41:44,239 --> 00:41:47,719
Speaker 6: to give Congress the power of the purse in that

681
00:41:47,880 --> 00:41:51,439
Speaker 6: way that you're suggesting, because it would mean that other

682
00:41:51,600 --> 00:41:54,960
Speaker 6: functions besides the Federal Reserve Board would need to be

683
00:41:55,080 --> 00:41:57,840
Speaker 6: protected from presidential plenary power.

684
00:41:59,040 --> 00:42:01,399
Speaker 5: That I think is really a point that really needs

685
00:42:01,480 --> 00:42:04,480
Speaker 5: to be hammered, which is coming out of the New

686
00:42:04,560 --> 00:42:07,680
Speaker 5: Deal all certainly partly the progressive error, but especially the

687
00:42:07,800 --> 00:42:10,000
Speaker 5: New Deal. We kind of had a compact in the

688
00:42:10,080 --> 00:42:13,400
Speaker 5: twentieth century in the United States where we were going

689
00:42:13,480 --> 00:42:20,000
Speaker 5: to have this expert administrative state that was insulated from

690
00:42:20,040 --> 00:42:24,160
Speaker 5: the president with various removal powers. Congress would have great

691
00:42:24,280 --> 00:42:27,200
Speaker 5: power to structure how the federal government worked, how the

692
00:42:27,239 --> 00:42:31,080
Speaker 5: administrative agencies worked, but this would be balanced by broad

693
00:42:31,800 --> 00:42:34,239
Speaker 5: scope for judicial review, so there'd be a lot of

694
00:42:34,360 --> 00:42:38,719
Speaker 5: judicial review for actions. This comes out the Administrative Procedure Act,

695
00:42:38,920 --> 00:42:41,120
Speaker 5: which I believe it's in nineteen forty six yep. And

696
00:42:41,920 --> 00:42:44,080
Speaker 5: so there was and there are other acts that are

697
00:42:44,120 --> 00:42:45,919
Speaker 5: around them, but these are kind of the central things.

698
00:42:45,960 --> 00:42:51,560
Speaker 5: So we created this system. And at the basic political level,

699
00:42:51,680 --> 00:42:54,680
Speaker 5: you have to see that this compact, this New Deal

700
00:42:54,880 --> 00:43:00,440
Speaker 5: legal order was something that the presidentialist, that the urgeoning

701
00:43:00,520 --> 00:43:03,760
Speaker 5: proto unitary executive theorist hate. You know, if you listen

702
00:43:03,880 --> 00:43:09,919
Speaker 5: to people around like the Trump administration, bruhaha, they talk

703
00:43:10,040 --> 00:43:12,560
Speaker 5: explicitly about how they want to kill the fourth branch

704
00:43:12,600 --> 00:43:15,160
Speaker 5: of government, by which they mean the administrative state that

705
00:43:15,480 --> 00:43:18,759
Speaker 5: they see this is the big albatross. Wilson is like

706
00:43:18,960 --> 00:43:23,520
Speaker 5: the biggest evil for having introduced this, Like that's we

707
00:43:23,719 --> 00:43:27,399
Speaker 5: really can't underestimate that drive. And then on the political level,

708
00:43:27,640 --> 00:43:31,160
Speaker 5: in terms of tech and tech sw swing to the right.

709
00:43:32,280 --> 00:43:37,080
Speaker 5: They the people who are bringing this presidentialist stuff, are

710
00:43:37,160 --> 00:43:40,839
Speaker 5: finding a very receptive audience in the newly radicalized right

711
00:43:40,880 --> 00:43:45,840
Speaker 5: wing tech world because they have had they they have

712
00:43:46,120 --> 00:43:50,080
Speaker 5: were shocked and bewildered by Gary Gensler and Lena Khan.

713
00:43:50,640 --> 00:43:53,800
Speaker 5: And as a result, like you know, and they're also

714
00:43:53,960 --> 00:43:57,280
Speaker 5: all on X the everything app and you know, cooking

715
00:43:57,320 --> 00:44:01,360
Speaker 5: themselves in signal group chats, and they're looking at this

716
00:44:01,560 --> 00:44:05,960
Speaker 5: and they can't possibly see the kind of common sense

717
00:44:06,080 --> 00:44:09,200
Speaker 5: reasons that say Lev and I might think think that

718
00:44:09,520 --> 00:44:12,399
Speaker 5: what Gary Gensler was doing on crypto, which we both

719
00:44:12,440 --> 00:44:14,319
Speaker 5: think of as insufficient, I think it's fair to say,

720
00:44:14,680 --> 00:44:18,400
Speaker 5: and what Lea, what Lena was doing as nothing but

721
00:44:18,719 --> 00:44:23,880
Speaker 5: a bureaucratic deep state conspiracy against the leading lights developing.

722
00:44:24,000 --> 00:44:26,440
Speaker 5: And so this is I think a big part of

723
00:44:26,520 --> 00:44:29,480
Speaker 5: the political story of the second Trump administration has been

724
00:44:29,520 --> 00:44:34,000
Speaker 5: the merging of these long time federal society far right

725
00:44:34,120 --> 00:44:38,359
Speaker 5: think tanks with UH with with new converts who act

726
00:44:38,480 --> 00:44:41,920
Speaker 5: with the zeal of the converted to just rip apart

727
00:44:42,280 --> 00:44:45,839
Speaker 5: the you know, quote unquote fourth Estate, the fourth administrator,

728
00:44:46,040 --> 00:44:47,600
Speaker 5: the fourth UH branch brand.

729
00:45:03,880 --> 00:45:06,040
Speaker 2: Okay, So we've been doing a lot of looking back,

730
00:45:06,400 --> 00:45:09,440
Speaker 2: which is fair because apparently history and tradition is now

731
00:45:09,600 --> 00:45:13,440
Speaker 2: relevant in ways we perhaps didn't expect. But I want

732
00:45:13,440 --> 00:45:16,560
Speaker 2: to make sure we address the looking forward, all right,

733
00:45:16,600 --> 00:45:19,280
Speaker 2: So we have this carve out for the FED, including

734
00:45:19,600 --> 00:45:25,400
Speaker 2: its enforcement abilities. Apparently is it safe. Everyone's safe? FED safe,

735
00:45:25,680 --> 00:45:26,800
Speaker 2: independence is preserved.

736
00:45:26,840 --> 00:45:30,920
Speaker 6: Now the FED is not safe. This is not a

737
00:45:31,040 --> 00:45:33,680
Speaker 6: good situation that the FED has found itself in. The

738
00:45:33,960 --> 00:45:37,080
Speaker 6: FED is an endangered species. Now it might be the

739
00:45:37,360 --> 00:45:43,480
Speaker 6: only independent agency that's constitutionally permissible. The Court has gone

740
00:45:43,520 --> 00:45:47,960
Speaker 6: out of its way to de legitimize independence and nonpartisan administration,

741
00:45:48,560 --> 00:45:53,040
Speaker 6: and then inexplicably they've said, but it's okay for monetary policy.

742
00:45:54,080 --> 00:46:00,319
Speaker 6: They're undermining the norms that support actually independent agencies doing

743
00:46:00,400 --> 00:46:01,279
Speaker 6: this and.

744
00:46:01,880 --> 00:46:02,560
Speaker 3: The carve out.

745
00:46:03,040 --> 00:46:05,560
Speaker 6: The Cook decision is five to four, and there are

746
00:46:05,680 --> 00:46:10,520
Speaker 6: only two out of nine justices that think the outcome

747
00:46:10,640 --> 00:46:14,240
Speaker 6: makes sense. So seven justices think differently.

748
00:46:14,680 --> 00:46:16,520
Speaker 3: There's the three discrepancy.

749
00:46:16,719 --> 00:46:21,960
Speaker 6: Yeah, So Justice Kagan, Justice Sotomayor, and Justice Jackson joined

750
00:46:22,080 --> 00:46:25,040
Speaker 6: Roberts in Kavanaugh to make the five in favor of

751
00:46:25,120 --> 00:46:27,840
Speaker 6: Lisa Cook. But they of course are dissenting in Slaughter.

752
00:46:27,920 --> 00:46:30,400
Speaker 6: They're the three justices dissenting there. They don't think slaughter

753
00:46:30,520 --> 00:46:33,000
Speaker 6: makes sense. So they don't think the FED. They don't

754
00:46:33,120 --> 00:46:35,120
Speaker 6: the car vette doesn't make sense of them. They just

755
00:46:35,160 --> 00:46:40,600
Speaker 6: think the FED is constitutional, just like the FDC is constitutional.

756
00:46:40,880 --> 00:46:43,680
Speaker 6: And so the only two justices that think that the

757
00:46:44,000 --> 00:46:48,239
Speaker 6: FTC is not constitutional but the FED is uh at

758
00:46:48,320 --> 00:46:51,279
Speaker 6: least who have announced themselves. Thomas has gone out and

759
00:46:51,360 --> 00:46:54,879
Speaker 6: said I think the FED has to go. The other

760
00:46:54,960 --> 00:46:57,160
Speaker 6: ones have not fully put their cards on the table,

761
00:46:57,200 --> 00:47:00,440
Speaker 6: but they voted against Lisa Cook. And so even if

762
00:47:00,440 --> 00:47:04,600
Speaker 6: they ultimately endorse some carve out, they thought that Trump

763
00:47:04,640 --> 00:47:06,640
Speaker 6: should be able to remove her during the pendency of

764
00:47:06,680 --> 00:47:11,280
Speaker 6: the litigation, which means whatever central bank independence they ultimately

765
00:47:11,320 --> 00:47:14,160
Speaker 6: potentially endorse, if they were to ultimately join on the

766
00:47:14,280 --> 00:47:19,160
Speaker 6: carve out, would be like not serious independence. So it's

767
00:47:19,760 --> 00:47:24,279
Speaker 6: only Kavanaugh and Roberts that really buy this equilibrium, which

768
00:47:24,320 --> 00:47:27,920
Speaker 6: suggests this is an unstable equilibrium that's very dependent on

769
00:47:28,000 --> 00:47:31,320
Speaker 6: the current composition of the court, and that you know,

770
00:47:31,840 --> 00:47:35,440
Speaker 6: Roberts and Kavanaugh are young ish by by by the

771
00:47:35,600 --> 00:47:40,279
Speaker 6: US government standards, but they will not serve forever, and

772
00:47:40,800 --> 00:47:46,600
Speaker 6: it is hard to imagine that this equilibrium will outlast them,

773
00:47:46,719 --> 00:47:50,600
Speaker 6: given all of the skepticism on both sides about the

774
00:47:50,719 --> 00:47:54,320
Speaker 6: carve out and the way in which now the Federal

775
00:47:54,400 --> 00:47:58,040
Speaker 6: Reserve Board sticks up like a sore thumb in the

776
00:47:58,040 --> 00:48:02,920
Speaker 6: administrative state, almost like attract attention. The presidentialists want to

777
00:48:03,000 --> 00:48:07,560
Speaker 6: finally win, and it's gonna be hard to get the

778
00:48:07,680 --> 00:48:13,000
Speaker 6: Democrats to accept that. The you know that the court

779
00:48:13,120 --> 00:48:16,040
Speaker 6: has just run over all these other agencies, but you know,

780
00:48:16,320 --> 00:48:18,479
Speaker 6: stand back from the Federal Reserve Board.

781
00:48:19,160 --> 00:48:22,080
Speaker 5: In my piece two weeks ago, my piece's title is

782
00:48:22,320 --> 00:48:27,200
Speaker 5: just agency independence. In one agency, Humphrey's executor is cowering

783
00:48:27,280 --> 00:48:30,480
Speaker 5: in the basement of the Ecchos building, and that like

784
00:48:30,640 --> 00:48:34,719
Speaker 5: basically communicates my perspective on this is that like this

785
00:48:34,960 --> 00:48:37,840
Speaker 5: is it's you know, five to four, it's so close

786
00:48:38,080 --> 00:48:40,120
Speaker 5: it doesn't make sense. I mean, I gotta give it

787
00:48:40,239 --> 00:48:43,839
Speaker 5: to the Clarence like he's right, it doesn't make any sense.

788
00:48:44,320 --> 00:48:46,959
Speaker 5: Like I'm on the other side of where he's gonna

789
00:48:47,000 --> 00:48:49,400
Speaker 5: take the conclusion that it doesn't make any sense. But

790
00:48:49,520 --> 00:48:51,319
Speaker 5: it doesn't make any sense. And I wanted to pick

791
00:48:51,400 --> 00:48:55,160
Speaker 5: up that point about protections. You know, this case also

792
00:48:55,280 --> 00:48:59,200
Speaker 5: deals with the question of, like how much protection there

793
00:48:59,280 --> 00:49:02,560
Speaker 5: actually is is at the Federal Reserve, you know, obviously

794
00:49:02,640 --> 00:49:05,720
Speaker 5: specifically for Lisa Kick, but for everyone, because it's important

795
00:49:05,719 --> 00:49:08,719
Speaker 5: to keep in mind, this whole thing that we've been

796
00:49:08,719 --> 00:49:11,400
Speaker 5: talking about has not been about the president's ability to

797
00:49:11,800 --> 00:49:15,319
Speaker 5: fire an agency head. It has been about the presidency's

798
00:49:15,360 --> 00:49:19,080
Speaker 5: ability to fire an agency head without cause. What Humphrey's,

799
00:49:19,280 --> 00:49:22,319
Speaker 5: what killing Humphrey's Executor removes is that you don't need

800
00:49:22,480 --> 00:49:27,319
Speaker 5: cause to fire an agency head. But just because there

801
00:49:27,440 --> 00:49:33,000
Speaker 5: is cause doesn't mean that like it's hunky dory, because

802
00:49:33,000 --> 00:49:35,160
Speaker 5: we have to define what causes. And this is one

803
00:49:35,160 --> 00:49:38,080
Speaker 5: of the biggest ironies is is the FED went from

804
00:49:38,160 --> 00:49:42,360
Speaker 5: the agency with the least uh with the least removal

805
00:49:42,440 --> 00:49:46,680
Speaker 5: protections because they didn't define cause in the Act. Although

806
00:49:46,719 --> 00:49:49,920
Speaker 5: I think that's because Humphrey's Executor came out just a

807
00:49:50,000 --> 00:49:52,880
Speaker 5: few months before and they literally waited on passing the

808
00:49:52,960 --> 00:49:55,480
Speaker 5: bill to see the Act, so they I think they

809
00:49:55,600 --> 00:49:58,640
Speaker 5: thought it was kind of obvious that they meant this

810
00:49:58,800 --> 00:50:01,800
Speaker 5: general tradition, and of course unfortunately it's not obvious. But anyway,

811
00:50:02,400 --> 00:50:05,800
Speaker 5: now they've gone from the agency with the independent agency

812
00:50:05,840 --> 00:50:08,520
Speaker 5: with the least removal protections to the most just by

813
00:50:08,640 --> 00:50:10,000
Speaker 5: mowing down everyone else.

814
00:50:10,800 --> 00:50:14,080
Speaker 4: And they're like in the trench, you know, speaking of

815
00:50:14,200 --> 00:50:18,279
Speaker 4: the FED sort of hanging on the thinnest of reeds here,

816
00:50:19,000 --> 00:50:23,880
Speaker 4: which is okay. On setting again second Amendment, Hamilton, you

817
00:50:23,960 --> 00:50:28,080
Speaker 4: find some story. It's not even really you know, there's

818
00:50:28,120 --> 00:50:31,439
Speaker 4: only two people who even buy this story at this point,

819
00:50:31,520 --> 00:50:35,879
Speaker 4: given what's changed at the FDC. One of the comments was, well,

820
00:50:36,800 --> 00:50:39,839
Speaker 4: the FED is very important for financial stability. That if

821
00:50:39,880 --> 00:50:41,680
Speaker 4: you like that, you mess that, If you mess with

822
00:50:41,760 --> 00:50:45,000
Speaker 4: the FED, there can have big repercussions, which I think

823
00:50:45,040 --> 00:50:48,120
Speaker 4: most people would probably agree with. But that doesn't sound

824
00:50:48,239 --> 00:50:52,720
Speaker 4: anything like a doctrine that is like could be embedded

825
00:50:52,760 --> 00:50:54,879
Speaker 4: at law. Oh it would really be it would really

826
00:50:54,920 --> 00:50:58,719
Speaker 4: be destabilizing. Yeah, right, Like that doesn't strike me as

827
00:50:58,800 --> 00:51:01,480
Speaker 4: like the type of language that it's like there's like

828
00:51:01,560 --> 00:51:03,560
Speaker 4: a real you know, there's nothing in the constitution. I

829
00:51:03,640 --> 00:51:06,640
Speaker 4: don't think that specifically says like, oh, when it gets

830
00:51:06,680 --> 00:51:09,759
Speaker 4: a little dicey for the financial markets, then some of

831
00:51:09,800 --> 00:51:11,160
Speaker 4: these things are irony.

832
00:51:11,560 --> 00:51:14,840
Speaker 5: Is that this what you're talking about actually has a

833
00:51:15,080 --> 00:51:19,480
Speaker 5: very rich history and tradition in US constitutional law, and

834
00:51:19,520 --> 00:51:22,439
Speaker 5: this is something I've been focused on for a long while,

835
00:51:22,560 --> 00:51:26,000
Speaker 5: which is, you know, okay, in the constitution, in the

836
00:51:26,080 --> 00:51:29,680
Speaker 5: constitutional times, the term bill of credit is what they

837
00:51:30,160 --> 00:51:35,239
Speaker 5: refused for money today. Very famously, states were banned from

838
00:51:35,560 --> 00:51:38,919
Speaker 5: issuing bills of credit. There was a whole debate about

839
00:51:38,920 --> 00:51:41,279
Speaker 5: whether the federal government should or should not the power

840
00:51:41,440 --> 00:51:47,440
Speaker 5: wasn't included, but wasn't explicitly barred. But then there was

841
00:51:47,480 --> 00:51:50,160
Speaker 5: the question of like, well, we have no money. And

842
00:51:50,640 --> 00:51:54,240
Speaker 5: the solution that came about was to start chartering banks.

843
00:51:54,400 --> 00:51:57,040
Speaker 5: That's how we started state chartering banks in the first place.

844
00:51:57,280 --> 00:51:59,480
Speaker 5: A lot of the first petitions are like, we need

845
00:51:59,560 --> 00:52:02,120
Speaker 5: a medium to pay taxes, so give us a medium

846
00:52:02,160 --> 00:52:05,719
Speaker 5: to pay taxes and issue bills of credit. But a

847
00:52:05,800 --> 00:52:07,600
Speaker 5: lot of people, a lot of smart people at the time,

848
00:52:08,480 --> 00:52:13,320
Speaker 5: looked at this and went, well, wait, we're banning the

849
00:52:13,440 --> 00:52:16,440
Speaker 5: states from issuing bills of credit, but they're allowed to

850
00:52:16,680 --> 00:52:20,520
Speaker 5: charter banks. That looks like they issue bills of credit.

851
00:52:21,239 --> 00:52:24,759
Speaker 5: And this book was a huge Supreme Court concept because

852
00:52:24,760 --> 00:52:30,879
Speaker 5: there are people are arguing a treasure secretary. Crawford, who's

853
00:52:30,920 --> 00:52:33,160
Speaker 5: a treasure secretary. They're in the world for eighteen twelve

854
00:52:33,480 --> 00:52:37,240
Speaker 5: would say when he was a Georgia Georgia senator. Believe

855
00:52:37,280 --> 00:52:42,560
Speaker 5: it's senator maybe congressman that you know what what someone does,

856
00:52:42,760 --> 00:52:45,360
Speaker 5: they do by you know, what someone does by another,

857
00:52:45,520 --> 00:52:47,080
Speaker 5: they do by their own hands. So they don't have

858
00:52:47,160 --> 00:52:49,120
Speaker 5: the power. Essentially, if they don't have the if they

859
00:52:49,120 --> 00:52:52,000
Speaker 5: don't have the power themselves, they can't delegate the power, Okay.

860
00:52:52,040 --> 00:52:54,960
Speaker 5: And that's the idea of like with you know, giving

861
00:52:55,440 --> 00:52:57,680
Speaker 5: state charter banks the ability to issue bills of credit,

862
00:52:58,080 --> 00:52:59,880
Speaker 5: you're delegating a power you have no right to deal.

863
00:53:00,360 --> 00:53:02,000
Speaker 6: I feel like you're trying to work in here a

864
00:53:02,080 --> 00:53:04,919
Speaker 6: claim that the state banks are unconstitutional. Uh.

865
00:53:06,960 --> 00:53:09,520
Speaker 5: I am not making that claim. What I'm saying is

866
00:53:09,560 --> 00:53:14,600
Speaker 5: that there's a lot of historical evidence that Chief Justice

867
00:53:14,680 --> 00:53:18,839
Speaker 5: Joseph's Story or Justice Story believed that was the case,

868
00:53:19,239 --> 00:53:21,800
Speaker 5: but thought it would be too destabilizing to do it,

869
00:53:22,120 --> 00:53:26,440
Speaker 5: because you would then just buy fiat eliminate the main

870
00:53:26,719 --> 00:53:30,120
Speaker 5: monetary medium for the country by knocking down his unconstitutional

871
00:53:31,239 --> 00:53:35,920
Speaker 5: all the state chartered banks. And instead they find some

872
00:53:36,200 --> 00:53:39,360
Speaker 5: flimsy justification for why these things aren't bills of credit.

873
00:53:39,880 --> 00:53:43,160
Speaker 5: And there's evidence that seems to be that he would

874
00:53:43,200 --> 00:53:46,239
Speaker 5: say this stuff in correspondence with Daniel Webster, who would

875
00:53:46,239 --> 00:53:48,600
Speaker 5: write it in his Constitutional writings, but it was a

876
00:53:48,719 --> 00:53:51,759
Speaker 5: kind of like surreptitious. We all think this, but we

877
00:53:51,880 --> 00:53:55,320
Speaker 5: can't really say it explicitly out loud so much because

878
00:53:55,760 --> 00:53:59,400
Speaker 5: it would destroy the antebellum American monetary system.

879
00:53:59,520 --> 00:54:04,040
Speaker 6: Where you're just means that necessity trump's law in certain circumstances.

880
00:54:03,400 --> 00:54:06,560
Speaker 5: Or necessity becomes substance of law, no matter how much

881
00:54:06,600 --> 00:54:09,960
Speaker 5: people think they're formalist, even two centuries ago.

882
00:54:10,440 --> 00:54:13,360
Speaker 6: Yeah, I think it's right to say that, you know,

883
00:54:13,680 --> 00:54:18,960
Speaker 6: what makes a judicial decision legitimate or illegitimate. One factor

884
00:54:19,640 --> 00:54:23,680
Speaker 6: are shared legal understandings and legal arguments. And that's why

885
00:54:23,719 --> 00:54:26,320
Speaker 6: the Court puts out these opinions to try to persuade

886
00:54:26,440 --> 00:54:30,560
Speaker 6: the epistemic community of lawyers that what they're doing is

887
00:54:30,680 --> 00:54:33,480
Speaker 6: within the bounds of their discretion. It is consistent with.

888
00:54:35,200 --> 00:54:35,439
Speaker 1: Law.

889
00:54:35,920 --> 00:54:39,440
Speaker 6: But there's some other constraint which just has to do

890
00:54:39,560 --> 00:54:42,880
Speaker 6: with the outcome. Maybe they could tell a good law story,

891
00:54:43,000 --> 00:54:45,680
Speaker 6: but if the outcome causes us to lose a war

892
00:54:45,760 --> 00:54:49,400
Speaker 6: with a foreign nation or causes the economy to go

893
00:54:49,520 --> 00:54:54,040
Speaker 6: into recession, then that is delegitimating the decision. In a

894
00:54:54,160 --> 00:54:57,320
Speaker 6: sort of more brute force way. It's not about what

895
00:54:57,520 --> 00:55:01,000
Speaker 6: is our intellectual understanding of your argument, man, It's just like,

896
00:55:01,719 --> 00:55:05,880
Speaker 6: look at those results that can't be that can't be

897
00:55:06,000 --> 00:55:08,320
Speaker 6: a legitimate outcome. And I do think there is some

898
00:55:09,000 --> 00:55:16,760
Speaker 6: element here where the court would rather have an incoherent

899
00:55:17,440 --> 00:55:23,960
Speaker 6: legal explanation for the carve out than face the legitimacy

900
00:55:24,040 --> 00:55:26,560
Speaker 6: crisis that might occur. They don't know if it will,

901
00:55:26,640 --> 00:55:30,000
Speaker 6: but might occur if they had overruled fed independence, Trump

902
00:55:30,040 --> 00:55:33,479
Speaker 6: had fired everybody else on the board, and the market

903
00:55:33,520 --> 00:55:34,680
Speaker 6: had gone into a tailspin.

904
00:55:36,320 --> 00:55:38,200
Speaker 3: I have one very last tiny question.

905
00:55:39,400 --> 00:55:41,200
Speaker 4: I'm going to open up a huge can of worms,

906
00:55:41,239 --> 00:55:42,920
Speaker 4: but we only have a few seconds, so I'm going

907
00:55:43,000 --> 00:55:45,920
Speaker 4: to do the most trolley question a short time. Okay,

908
00:55:47,800 --> 00:55:50,480
Speaker 4: there was this position that you said that like tried

909
00:55:50,560 --> 00:55:55,720
Speaker 4: to limit the executive's ability to do independent of fiscal

910
00:55:55,800 --> 00:55:59,759
Speaker 4: policy outside of Congress. Isn't a good solution to that?

911
00:56:01,120 --> 00:56:04,800
Speaker 4: One way the executive could do fiscal policy without Congress

912
00:56:05,000 --> 00:56:07,719
Speaker 4: is fire everyone at the irs. You don't collect any

913
00:56:07,840 --> 00:56:12,080
Speaker 4: taxes suddenly, that's very stimulative. Isn't a good solution to

914
00:56:12,400 --> 00:56:15,879
Speaker 4: the debt ceiling, the dead ceiling? What I'm saying isn't

915
00:56:15,960 --> 00:56:18,880
Speaker 4: this the defense of the debt ceiling, which we you know,

916
00:56:19,080 --> 00:56:22,480
Speaker 4: all all of us wise people hate that. It's a

917
00:56:22,560 --> 00:56:27,400
Speaker 4: way to prevent the executive from doing unilateral fiscal polity asolutely.

918
00:56:27,480 --> 00:56:30,520
Speaker 6: I mean, before the debt ceiling was in place, Congress

919
00:56:30,640 --> 00:56:34,920
Speaker 6: used to specifically authorize all of the debt issuance. When

920
00:56:35,000 --> 00:56:38,040
Speaker 6: Congress would do a spending program, they would join it

921
00:56:38,120 --> 00:56:39,080
Speaker 6: with a fund.

922
00:56:38,880 --> 00:56:42,040
Speaker 4: Saying the government, the executive could fire the irs and say, oh,

923
00:56:42,160 --> 00:56:45,320
Speaker 4: just take fifty one weeks of vacation, you don't collect

924
00:56:45,320 --> 00:56:46,000
Speaker 4: any taxes.

925
00:56:46,120 --> 00:56:47,759
Speaker 3: Suddenly you've done stimulus.

926
00:56:48,280 --> 00:56:50,560
Speaker 4: And the one thing that maybe in law that could

927
00:56:50,600 --> 00:56:52,960
Speaker 4: prevent that is the dead telling anyway, I don't want

928
00:56:52,960 --> 00:56:54,359
Speaker 4: to I'm not well.

929
00:56:54,320 --> 00:56:56,640
Speaker 5: Actually I think that, you know, just to take it

930
00:56:56,680 --> 00:56:58,440
Speaker 5: as a straight matter of law, I don't think that

931
00:56:58,520 --> 00:57:00,880
Speaker 5: would be a limiting principle, because I mean, this is

932
00:57:00,920 --> 00:57:04,200
Speaker 5: actually a very interesting thing because for it to work

933
00:57:04,239 --> 00:57:06,840
Speaker 5: the way you're describing, there would have to be some

934
00:57:07,200 --> 00:57:12,440
Speaker 5: mechanism to create removal protections for officials at the I R. S.

935
00:57:13,120 --> 00:57:17,120
Speaker 5: And because otherwise, if it's just like though the debt cealing, well,

936
00:57:17,160 --> 00:57:19,080
Speaker 5: the president can fire all the from the people from

937
00:57:19,080 --> 00:57:21,080
Speaker 5: the irs and just wait until it hits the debt

938
00:57:21,120 --> 00:57:23,840
Speaker 5: sealing that you know, society's going to collapse.

939
00:57:23,880 --> 00:57:27,120
Speaker 6: Well before you that's clear here it's illegal to fire

940
00:57:27,160 --> 00:57:30,240
Speaker 6: everybody there's civil servants, to go on.

941
00:57:30,360 --> 00:57:32,440
Speaker 3: Vacation, and to scroll Twitter all day.

942
00:57:32,520 --> 00:57:32,680
Speaker 6: Yeah.

943
00:57:32,800 --> 00:57:34,840
Speaker 5: Right, but but this is a bit But do you

944
00:57:34,920 --> 00:57:36,959
Speaker 5: want to actually because this does bring up a point

945
00:57:37,000 --> 00:57:39,440
Speaker 5: that I really talk about in my piece is that

946
00:57:40,520 --> 00:57:43,840
Speaker 5: if you if you're limiting removal protections from from the

947
00:57:44,160 --> 00:57:48,480
Speaker 5: from Congress, it also implies you can't that the courts

948
00:57:48,560 --> 00:57:52,800
Speaker 5: can't reach in and create removal protections among agencies. Okay,

949
00:57:53,000 --> 00:57:56,480
Speaker 5: And that's important because it means like, okay, if some

950
00:57:56,600 --> 00:57:59,960
Speaker 5: court says that what the federal government is doing is illegal,

951
00:58:00,600 --> 00:58:02,800
Speaker 5: and Trump just keeps on firing the guys who try

952
00:58:02,880 --> 00:58:05,720
Speaker 5: to follow what the courts say, then the law is

953
00:58:05,840 --> 00:58:09,560
Speaker 5: what Trump says. And there's a series of what are

954
00:58:09,600 --> 00:58:12,360
Speaker 5: called shadow docket decisions where they haven't given their reasoning,

955
00:58:12,840 --> 00:58:18,720
Speaker 5: where all sorts of injunctions and injunctory relief and ways

956
00:58:18,760 --> 00:58:23,160
Speaker 5: of stopping brazenly legal activity from the president have been

957
00:58:23,280 --> 00:58:27,480
Speaker 5: sidestep and when there's some money involved and just going no, no, no,

958
00:58:27,720 --> 00:58:31,800
Speaker 5: you can't go through the Administrative Procedure Act and say, hey,

959
00:58:31,840 --> 00:58:34,280
Speaker 5: they didn't do the proper procedure, so we get to

960
00:58:34,320 --> 00:58:37,440
Speaker 5: stop this activity. You have to go to the Federal

961
00:58:37,520 --> 00:58:39,920
Speaker 5: Court of Claims and get a claim for money. But

962
00:58:39,960 --> 00:58:43,320
Speaker 5: a claim for money is not injunction. It's not getting

963
00:58:43,320 --> 00:58:45,200
Speaker 5: into government policy. All you can do is get the

964
00:58:45,280 --> 00:58:48,880
Speaker 5: money that you're supposed to have, not stop wildly on

965
00:58:49,000 --> 00:58:50,040
Speaker 5: constitutional activity.

966
00:58:50,080 --> 00:58:54,440
Speaker 6: There's a really deep issue here that you guys are raising,

967
00:58:54,640 --> 00:58:57,040
Speaker 6: which has to do with the rule of law. And

968
00:58:57,320 --> 00:59:01,320
Speaker 6: you may know a case Marbury versus mad very famous

969
00:59:01,440 --> 00:59:04,440
Speaker 6: case eighteen oh three, which has to do with President

970
00:59:04,560 --> 00:59:10,240
Speaker 6: Thomas Jefferson's decision not to deliver a commission to a

971
00:59:10,400 --> 00:59:13,280
Speaker 6: man named Marbury to serve as a Justice of the

972
00:59:13,320 --> 00:59:17,080
Speaker 6: Peace in the District of Columbia, and it went all

973
00:59:17,120 --> 00:59:21,280
Speaker 6: the way up to Supreme Court and Chief Justice Marshall said,

974
00:59:22,680 --> 00:59:27,320
Speaker 6: the president can't not do what he's legally required to

975
00:59:27,400 --> 00:59:30,440
Speaker 6: do under the law, and the courts can man damus

976
00:59:30,600 --> 00:59:34,440
Speaker 6: is the word the president to do what he has required.

977
00:59:35,760 --> 00:59:38,480
Speaker 6: And it was that decision up until Myers that was

978
00:59:38,640 --> 00:59:45,720
Speaker 6: understood to underwrite Congress's ability to limit removal power because Marbury,

979
00:59:46,000 --> 00:59:48,000
Speaker 6: president was not authorized to remove him. He had a

980
00:59:48,080 --> 00:59:51,600
Speaker 6: five year term, and to tell the executive branch. The

981
00:59:51,640 --> 00:59:53,919
Speaker 6: courts can tell the executive branch to follow the law.

982
00:59:54,200 --> 00:59:57,160
Speaker 6: Part of the problem with this unitary theory is it's

983
00:59:57,240 --> 01:00:01,640
Speaker 6: really troubling Marbury in this foundation, and that suggests the

984
01:00:01,720 --> 01:00:05,680
Speaker 6: president is under the law, has to follow the law,

985
01:00:06,120 --> 01:00:10,320
Speaker 6: and the court's job is to make the president and

986
01:00:10,440 --> 01:00:13,360
Speaker 6: the president's officers do that. And as we get away

987
01:00:13,400 --> 01:00:16,320
Speaker 6: from that, you can have these hypotheticals where you're thinking, oh,

988
01:00:16,480 --> 01:00:19,280
Speaker 6: they're just having the irs not follow the law. That

989
01:00:19,440 --> 01:00:22,520
Speaker 6: is unthinkable to the nineteenth century. In the nineteenth century

990
01:00:22,600 --> 01:00:26,400
Speaker 6: under Marburry, that's a plain case for mandamus, as Chief

991
01:00:26,520 --> 01:00:29,880
Speaker 6: Justice Marshall said, having the irs officers do nothing. But

992
01:00:30,080 --> 01:00:33,800
Speaker 6: now we actually think that maybe that's what are we

993
01:00:33,880 --> 01:00:36,640
Speaker 6: going to do, because in fact, there all are these

994
01:00:36,720 --> 01:00:39,400
Speaker 6: agencies not doing their jobs right now, and the courts

995
01:00:39,480 --> 01:00:43,640
Speaker 6: aren't making them do what Congress said to do. And

996
01:00:43,800 --> 01:00:46,760
Speaker 6: in that sense, we are sort of approaching a constitutional

997
01:00:46,880 --> 01:00:50,720
Speaker 6: crisis where we have a degradation in rule of law,

998
01:00:51,080 --> 01:00:53,880
Speaker 6: which is the idea of that Congress rights laws and

999
01:00:53,960 --> 01:00:56,320
Speaker 6: the rest of the government's job is to carry them out,

1000
01:00:56,640 --> 01:00:58,680
Speaker 6: not to come up with their own views about what

1001
01:00:58,840 --> 01:00:59,320
Speaker 6: the law.

1002
01:00:59,200 --> 01:01:03,880
Speaker 5: Should be lev Did Hamilton write Marlbarry? Did Hamilton write

1003
01:01:03,880 --> 01:01:04,880
Speaker 5: the decision in Marbury?

1004
01:01:04,960 --> 01:01:05,000
Speaker 2: No?

1005
01:01:05,120 --> 01:01:07,520
Speaker 5: No, no, well I don't see how this is relevant.

1006
01:01:09,680 --> 01:01:12,080
Speaker 2: All Right, that's a great place to leave it. Love

1007
01:01:12,160 --> 01:01:14,320
Speaker 2: and Nathan, thank you so much for coming back.

1008
01:01:14,440 --> 01:01:14,640
Speaker 5: Yeah.

1009
01:01:14,880 --> 01:01:29,120
Speaker 3: Thanks, Okay, that was great, Joe.

1010
01:01:29,280 --> 01:01:31,840
Speaker 2: Always good to end on a constitutional crisis. Note.

1011
01:01:32,640 --> 01:01:34,720
Speaker 3: I love talking to Nathan and Love.

1012
01:01:34,840 --> 01:01:37,640
Speaker 4: As you know, I love people who are just like

1013
01:01:38,560 --> 01:01:41,120
Speaker 4: I know a lot of facts and details, etc. And

1014
01:01:41,240 --> 01:01:47,520
Speaker 4: I think definitely when you're talking about deep constitutional history,

1015
01:01:48,200 --> 01:01:50,400
Speaker 4: you really want to you know, we can also say yeah,

1016
01:01:50,560 --> 01:01:54,400
Speaker 4: principle blah blah blah, independent monetary policy. When we're at

1017
01:01:54,440 --> 01:01:57,000
Speaker 4: this level, we really want to talk to people and

1018
01:01:57,120 --> 01:02:00,439
Speaker 4: we did who actually like know a lot of case

1019
01:02:00,560 --> 01:02:03,280
Speaker 4: law and know everything that brings to bear on this question.

1020
01:02:03,600 --> 01:02:03,800
Speaker 1: Yeah.

1021
01:02:04,920 --> 01:02:07,040
Speaker 2: I do think it's just wild to me that, like

1022
01:02:07,120 --> 01:02:09,800
Speaker 2: a Second Amendment case, yeah, like I would have I.

1023
01:02:09,840 --> 01:02:12,400
Speaker 4: Did not influence it, pick that together, but that is

1024
01:02:12,520 --> 01:02:15,080
Speaker 4: like it's a wild stream. It's like, Okay, here's an

1025
01:02:15,120 --> 01:02:18,720
Speaker 4: amendment and we've found a way to modify it based

1026
01:02:18,800 --> 01:02:23,320
Speaker 4: on tradition. Therefore, here is another thing in the Constitution

1027
01:02:24,160 --> 01:02:28,440
Speaker 4: that because they're precedent for using constitution in another case,

1028
01:02:28,840 --> 01:02:32,080
Speaker 4: or start using tradition in another constitutional case, we can

1029
01:02:33,200 --> 01:02:37,000
Speaker 4: revert to tradition here. I also thought it was very

1030
01:02:37,080 --> 01:02:42,400
Speaker 4: interesting Lev's point and like that. Okay, the decision to

1031
01:02:42,680 --> 01:02:45,600
Speaker 4: for now keep Lisa Cook in her job was a

1032
01:02:45,640 --> 01:02:49,600
Speaker 4: five to four decision, but really only two people on

1033
01:02:49,960 --> 01:02:54,520
Speaker 4: the nine member Supreme Court actually think that this arrangement

1034
01:02:54,760 --> 01:02:57,800
Speaker 4: is tenable where you can fire someone from the FTC

1035
01:02:58,080 --> 01:03:00,880
Speaker 4: but not the FED that easily. That does not that

1036
01:03:01,120 --> 01:03:04,040
Speaker 4: is a good reason to think that, like this is

1037
01:03:04,160 --> 01:03:05,960
Speaker 4: not a very stable equilibrium.

1038
01:03:06,160 --> 01:03:09,760
Speaker 2: Yeah, and also just the idea that like basically put

1039
01:03:09,800 --> 01:03:12,720
Speaker 2: another target on the Fed's back, right, like this is

1040
01:03:12,840 --> 01:03:16,760
Speaker 2: the only one. Everyone else is like subject to the

1041
01:03:16,840 --> 01:03:19,520
Speaker 2: whims of the president, I guess, and can be treated

1042
01:03:19,640 --> 01:03:23,280
Speaker 2: like an at will employee, but the FED has to

1043
01:03:23,360 --> 01:03:26,920
Speaker 2: be I guess preserved in amber. Yeah, because it's a

1044
01:03:26,960 --> 01:03:30,400
Speaker 2: precious antique. So you do like it, right, it stands out.

1045
01:03:30,800 --> 01:03:31,480
Speaker 3: It stands out.

1046
01:03:31,640 --> 01:03:35,640
Speaker 4: It is interesting Nathan's point sort of near the end

1047
01:03:35,800 --> 01:03:40,320
Speaker 4: about I guess it's not surprising in America, probably in

1048
01:03:40,400 --> 01:03:42,920
Speaker 4: any country. I guess it's not surprising in America that

1049
01:03:43,080 --> 01:03:46,400
Speaker 4: like there is a history of but it would be

1050
01:03:46,480 --> 01:03:48,360
Speaker 4: bad for financial markets, or it would be bad for

1051
01:03:48,560 --> 01:03:52,800
Speaker 4: the economy, setting aside the law as you know, and look,

1052
01:03:53,480 --> 01:03:57,960
Speaker 4: I think it's good that I think thinking about outcomes

1053
01:03:57,960 --> 01:04:01,560
Speaker 4: are probably good and as a way of like to

1054
01:04:02,280 --> 01:04:06,960
Speaker 4: Lev's point of maintaining the legitimacy of the judicial system

1055
01:04:07,360 --> 01:04:11,000
Speaker 4: that they don't pretend to be completely ignorant of, Like

1056
01:04:11,160 --> 01:04:11,840
Speaker 4: if we make.

1057
01:04:11,760 --> 01:04:14,520
Speaker 3: This decision, will things start to go off the rails.

1058
01:04:15,800 --> 01:04:17,880
Speaker 2: I'm going to end this conversation before you bring up

1059
01:04:17,920 --> 01:04:18,880
Speaker 2: the trillion dollar coin.

1060
01:04:19,000 --> 01:04:22,000
Speaker 3: No, I have nothing, all right? Shall you leave it there?

1061
01:04:22,080 --> 01:04:22,640
Speaker 3: Let's leave it there.

1062
01:04:22,800 --> 01:04:25,160
Speaker 2: This has been another episode of the Odd Loots podcast.

1063
01:04:25,280 --> 01:04:28,360
Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway and.

1064
01:04:28,440 --> 01:04:31,080
Speaker 4: I'm Joe Wisenthal. You can follow me at the Stalwart.

1065
01:04:31,400 --> 01:04:35,000
Speaker 4: Follow our producers Carmen Rodriguez at Carmen armandesh Ol Bennett

1066
01:04:35,000 --> 01:04:38,920
Speaker 4: at Dashbot, Calebrooks at Kelbrooks, and Kevin Lozano at Kevin

1067
01:04:39,000 --> 01:04:40,200
Speaker 4: Lloyd Lozano.

1068
01:04:40,120 --> 01:04:42,200
Speaker 3: And from our Odd Laws content. Go to Bloomberg dot

1069
01:04:42,240 --> 01:04:43,360
Speaker 3: com slash odd Laws.

1070
01:04:43,400 --> 01:04:45,800
Speaker 4: We have been Daily Newslayer and all of our episodes

1071
01:04:46,000 --> 01:04:47,880
Speaker 4: and You can chat about all of these topics twenty

1072
01:04:47,920 --> 01:04:51,440
Speaker 4: four to seven in our discord discord dot gg slash

1073
01:04:51,440 --> 01:04:52,920
Speaker 4: odd lots and if you.

1074
01:04:53,080 --> 01:04:54,960
Speaker 2: Enjoy odd Lots, if you like it when we talk

1075
01:04:55,000 --> 01:04:59,480
Speaker 2: about why a Second Amendment case now influences the shape

1076
01:04:59,560 --> 01:05:02,000
Speaker 2: and future of the FED, then please leave us a

1077
01:05:02,080 --> 01:05:05,800
Speaker 2: positive review on your favorite podcast platform. And remember, if

1078
01:05:05,840 --> 01:05:08,320
Speaker 2: you are a Bloomberg subscriber, you can listen to all

1079
01:05:08,360 --> 01:05:11,360
Speaker 2: of our episodes absolutely ad free. All you need to

1080
01:05:11,440 --> 01:05:14,080
Speaker 2: do is find the Bloomberg channel on Apple Podcasts and

1081
01:05:14,240 --> 01:05:16,760
Speaker 2: follow the instructions there. Thanks for listening.