1 00:00:02,720 --> 00:00:16,560 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. 2 00:00:18,640 --> 00:00:21,760 Speaker 2: Hello and welcome to another episode of the Ovlocks podcast. 3 00:00:21,840 --> 00:00:25,119 Speaker 2: I'm Tracy Alloway and I'm Jill Whysntal Joe. Another day, 4 00:00:25,200 --> 00:00:26,680 Speaker 2: another emergency episode. 5 00:00:26,760 --> 00:00:28,920 Speaker 3: I mean, we're back to emergency episodes and this is 6 00:00:28,960 --> 00:00:30,040 Speaker 3: obviously one of the big ones. 7 00:00:30,240 --> 00:00:33,800 Speaker 2: Yeah, so we are recording this on August twenty sixth, 8 00:00:33,840 --> 00:00:37,520 Speaker 2: and we had news overnight that President Donald Trump intends 9 00:00:37,600 --> 00:00:42,600 Speaker 2: to fire Lisa Cook from the Federal Reserve Board. Obviously, 10 00:00:42,640 --> 00:00:46,479 Speaker 2: this feeds right into the debate over central bank independence 11 00:00:46,520 --> 00:00:48,559 Speaker 2: and what the president actually has a right to do 12 00:00:48,600 --> 00:00:52,520 Speaker 2: when it comes to hiring and firing. And the market 13 00:00:52,560 --> 00:00:56,000 Speaker 2: reaction this morning, Gold up a bit, the dollar down. 14 00:00:56,520 --> 00:00:59,480 Speaker 2: But what's really interesting is we have yields at the 15 00:00:59,560 --> 00:01:03,080 Speaker 2: long end of the treasury market picking up, which would 16 00:01:03,160 --> 00:01:07,000 Speaker 2: suggest there's more of a risk premium being built into 17 00:01:07,040 --> 00:01:07,560 Speaker 2: that market. 18 00:01:07,840 --> 00:01:08,440 Speaker 4: No, totally. 19 00:01:08,680 --> 00:01:13,560 Speaker 3: The concerns over fed independent sort of cast a whole 20 00:01:13,680 --> 00:01:17,160 Speaker 3: shadow of the recent Jackson Hole event. And of course, okay, 21 00:01:17,200 --> 00:01:19,240 Speaker 3: so we're recording this August twenty six This morning, we 22 00:01:19,280 --> 00:01:22,240 Speaker 3: put out an episode with Adam Posen which was sort 23 00:01:22,280 --> 00:01:27,199 Speaker 3: of about this surreal experience there where everybody knew that 24 00:01:27,240 --> 00:01:30,040 Speaker 3: the threat to central independence were the number one story 25 00:01:30,040 --> 00:01:32,760 Speaker 3: and monetary policy, and yet no one was really talking 26 00:01:32,800 --> 00:01:34,880 Speaker 3: about it. Maybe people were trying to lay low, trying 27 00:01:34,880 --> 00:01:37,520 Speaker 3: to act business as usual, and then we get this, 28 00:01:37,800 --> 00:01:40,679 Speaker 3: and so what was something that maybe people hoped to 29 00:01:41,440 --> 00:01:43,880 Speaker 3: imagine a way or sort of not. You know, look 30 00:01:43,920 --> 00:01:45,600 Speaker 3: at the other direction is now right here. 31 00:01:45,760 --> 00:01:48,560 Speaker 2: Well, we also had Trump tweeting that he wanted to 32 00:01:48,600 --> 00:01:52,200 Speaker 2: fire Lisa Cook while Powell was giving his speech, which 33 00:01:52,280 --> 00:01:56,600 Speaker 2: definitely underscores the tone of Jackson Hole recently. Okay, so 34 00:01:57,000 --> 00:01:59,760 Speaker 2: there's clearly a lot to talk about, including whether or 35 00:01:59,840 --> 00:02:02,400 Speaker 2: not Trump can actually do this from a legal perspective. 36 00:02:02,520 --> 00:02:04,760 Speaker 2: And I'm glad to say we have the perfect guests, 37 00:02:04,840 --> 00:02:08,080 Speaker 2: someone we have spoken to before on this exact topic 38 00:02:08,120 --> 00:02:10,400 Speaker 2: of central bank independence. We're going to be speaking with 39 00:02:10,480 --> 00:02:14,000 Speaker 2: Lev menand professor at Columbia Law School and also the 40 00:02:14,040 --> 00:02:17,320 Speaker 2: author of the Fed Unbound. Lev thanks so much for 41 00:02:17,360 --> 00:02:18,360 Speaker 2: coming on the show. 42 00:02:18,160 --> 00:02:19,880 Speaker 4: Again, Thanks for having me back. 43 00:02:20,440 --> 00:02:22,680 Speaker 2: So I'm going to start with a very simple question. 44 00:02:23,560 --> 00:02:28,840 Speaker 2: Is there any precedent in history for a president firing 45 00:02:28,919 --> 00:02:31,440 Speaker 2: someone from the Federal Reserve Board in this way? 46 00:02:31,919 --> 00:02:34,880 Speaker 4: No, there have been no firings of members of the 47 00:02:34,880 --> 00:02:37,040 Speaker 4: FED Board by the President since the FED Board was 48 00:02:37,040 --> 00:02:40,800 Speaker 4: first created by Congress in nineteen thirteen, and there haven't 49 00:02:40,800 --> 00:02:46,360 Speaker 4: been any attempts by presidents to remove any officers of 50 00:02:46,400 --> 00:02:50,800 Speaker 4: the United States for cause in over a century. And 51 00:02:50,880 --> 00:02:53,640 Speaker 4: so we're in on chartered waters here in a number 52 00:02:53,639 --> 00:02:54,640 Speaker 4: of different respects. 53 00:02:55,160 --> 00:02:59,440 Speaker 3: We're going to get into the ostensible reasons for the firing. 54 00:02:59,560 --> 00:03:04,240 Speaker 3: Obviously leave, but as lawyers, what does fore cause mean? 55 00:03:05,919 --> 00:03:09,560 Speaker 4: So for cause? One of the legal questions here is 56 00:03:09,880 --> 00:03:14,280 Speaker 4: what constitutes cause under the statute and in federal law, 57 00:03:14,400 --> 00:03:19,560 Speaker 4: in independent agency law. Usually Congress specifies the causes, and 58 00:03:19,600 --> 00:03:23,560 Speaker 4: there are three common ones. Inefficiency, neglective duty, and malfeasance 59 00:03:23,600 --> 00:03:26,480 Speaker 4: in office. These are the classic causes. The Federal Reserve 60 00:03:26,560 --> 00:03:30,600 Speaker 4: Act is unusual for not specifying specific causes but saying 61 00:03:30,960 --> 00:03:35,360 Speaker 4: simply for cause. So one issue here is is it 62 00:03:35,600 --> 00:03:40,080 Speaker 4: just the standard causes or do other things count? And 63 00:03:40,120 --> 00:03:42,640 Speaker 4: that's really important because the standard causes all have to 64 00:03:42,680 --> 00:03:46,160 Speaker 4: do with your conduct in carrying out your job, malfeasance 65 00:03:46,240 --> 00:03:48,680 Speaker 4: in office as opposed to malfeasans out of office. There 66 00:03:48,720 --> 00:03:52,400 Speaker 4: was an intent by Congress not to include private misconduct 67 00:03:52,400 --> 00:03:55,920 Speaker 4: as a ground for presidential removal from office. And so 68 00:03:56,040 --> 00:03:59,760 Speaker 4: one question here is whether private misconduct even counts. I 69 00:04:00,000 --> 00:04:02,400 Speaker 4: think something that's very clear. We should just say up front, 70 00:04:02,640 --> 00:04:06,400 Speaker 4: allegations of private misconduct definitely don't count. That does not 71 00:04:06,480 --> 00:04:08,400 Speaker 4: come within the statute. And that's one of the reasons 72 00:04:08,440 --> 00:04:13,560 Speaker 4: Isa say why because of all the due process concerns 73 00:04:13,560 --> 00:04:17,280 Speaker 4: that are associated, right, an allegation isn't sufficient for a 74 00:04:17,279 --> 00:04:21,120 Speaker 4: removal four cause because four cause requires a determination that 75 00:04:21,240 --> 00:04:26,240 Speaker 4: misconduct took place. An allegation isn't sufficient for determination. You know, 76 00:04:26,279 --> 00:04:29,440 Speaker 4: an allegation is totally sufficient to fire the Secretary of 77 00:04:29,440 --> 00:04:31,920 Speaker 4: the Treasury because that person serves as the pleasure of 78 00:04:31,960 --> 00:04:34,080 Speaker 4: the president, and the president can say I fired the 79 00:04:34,120 --> 00:04:37,400 Speaker 4: secretary because the secretary there are allegations that the secretary 80 00:04:37,400 --> 00:04:40,360 Speaker 4: engagement of his conduct. That's totally sufficient. But Lisa Cook 81 00:04:40,480 --> 00:04:42,320 Speaker 4: is not an official that serves as the pleasure of 82 00:04:42,360 --> 00:04:45,679 Speaker 4: the president. Lisa Cook is closer to being a federal judge, 83 00:04:46,080 --> 00:04:49,320 Speaker 4: an official who has a tenure in office, a vested 84 00:04:49,400 --> 00:04:52,080 Speaker 4: legal right to serve in their position, and to take 85 00:04:52,120 --> 00:04:55,000 Speaker 4: that away, the president has to follow a process and 86 00:04:55,040 --> 00:04:57,440 Speaker 4: have a ground and make a conclusion, and none of 87 00:04:57,440 --> 00:04:59,320 Speaker 4: that has happened here, which is another reason that this 88 00:04:59,400 --> 00:05:00,479 Speaker 4: is an illegal firing. 89 00:05:00,839 --> 00:05:03,120 Speaker 2: So just before we go any further, give us a 90 00:05:03,160 --> 00:05:06,919 Speaker 2: recap of the accusations against Lisa Cook, because, as you 91 00:05:06,960 --> 00:05:09,640 Speaker 2: point out, they feed into the debate over whether this 92 00:05:09,720 --> 00:05:12,880 Speaker 2: could count as malfeasan's particularly in office. 93 00:05:13,360 --> 00:05:15,680 Speaker 4: Yeah, okay, so I will do that. I just think 94 00:05:15,680 --> 00:05:17,360 Speaker 4: we should note at the sort of at the top 95 00:05:17,400 --> 00:05:19,360 Speaker 4: that there's a way in which while this is about 96 00:05:19,400 --> 00:05:21,680 Speaker 4: Lisa Cook, it's also not about Lisa Cook at all. 97 00:05:22,080 --> 00:05:23,840 Speaker 4: This is about jaypal This is about the rest of 98 00:05:23,880 --> 00:05:27,560 Speaker 4: the board. This is about the president's determination to subordinate 99 00:05:27,720 --> 00:05:29,600 Speaker 4: one of the most powerful parts of the government as 100 00:05:29,640 --> 00:05:32,680 Speaker 4: part of a larger campaign to control as much of 101 00:05:32,680 --> 00:05:37,159 Speaker 4: the government as possible. And the move against Cook is 102 00:05:37,480 --> 00:05:41,200 Speaker 4: a preview of coming events for other board members if 103 00:05:41,240 --> 00:05:46,279 Speaker 4: in fact the firing is able to take effect. Okay, 104 00:05:46,279 --> 00:05:49,040 Speaker 4: So what is the specific case against Cook. It has 105 00:05:49,120 --> 00:05:53,760 Speaker 4: to do with two mortgages that she took out before 106 00:05:54,000 --> 00:05:57,280 Speaker 4: she became a governor of the Federal Reserve. And so 107 00:05:57,320 --> 00:06:00,479 Speaker 4: it appears as though the administration has been digging around 108 00:06:00,520 --> 00:06:04,599 Speaker 4: in mortgage records and they found I don't know whether 109 00:06:04,640 --> 00:06:08,320 Speaker 4: they were looking at Lisa Cook in particular, or government officials. 110 00:06:08,720 --> 00:06:13,880 Speaker 4: They found that Lisa Cook had two mortgage applications, both 111 00:06:13,920 --> 00:06:17,880 Speaker 4: of which claimed that she intended to make the property 112 00:06:18,000 --> 00:06:22,599 Speaker 4: that was collateral for the loan her primary residents. And 113 00:06:22,680 --> 00:06:26,760 Speaker 4: so the allegation is that this is mortgage fraud. Of course, 114 00:06:26,839 --> 00:06:31,400 Speaker 4: fraud requires an intent, and so on its face, just 115 00:06:31,480 --> 00:06:34,479 Speaker 4: the two documents is not sufficient to convict somebody of 116 00:06:34,520 --> 00:06:36,919 Speaker 4: a crime. Nor can you be sort of convicted of 117 00:06:36,960 --> 00:06:40,400 Speaker 4: a crime, you know, on the Twitter sphere. The ordinary 118 00:06:40,760 --> 00:06:43,839 Speaker 4: way in which it would get worked out whether there 119 00:06:44,120 --> 00:06:49,279 Speaker 4: was fraud here is there would be a private government 120 00:06:49,560 --> 00:06:54,159 Speaker 4: investigation by prosecutors. They could get an indictment, etc. None 121 00:06:54,200 --> 00:06:57,479 Speaker 4: of that has happened. Right, This is guilty until proven innocent, 122 00:06:58,000 --> 00:07:00,919 Speaker 4: and it doesn't seem to even be the goal of 123 00:07:00,920 --> 00:07:05,480 Speaker 4: the administration to run a proper proceeding to determine whether 124 00:07:05,520 --> 00:07:08,400 Speaker 4: this private misconduct took place. The point is to point 125 00:07:08,400 --> 00:07:10,640 Speaker 4: to this private misconduct and say, now I can fire 126 00:07:10,720 --> 00:07:13,680 Speaker 4: you from the federal reserve. And that's where there's just 127 00:07:13,680 --> 00:07:17,400 Speaker 4: a big disconnect because allegations of private misconduct, there's just 128 00:07:17,440 --> 00:07:21,480 Speaker 4: no precedent that supports a removal for cause from a 129 00:07:21,520 --> 00:07:24,440 Speaker 4: government position. On that basis, and the President has pointed 130 00:07:24,480 --> 00:07:26,160 Speaker 4: to none, and the White House is pointed to none. 131 00:07:26,400 --> 00:07:28,320 Speaker 4: Mostly what they're pointing to and what this is going 132 00:07:28,400 --> 00:07:32,160 Speaker 4: to ultimately be a case about, is their inherent constitutional 133 00:07:32,200 --> 00:07:35,360 Speaker 4: authority as president, which is what the Court has allowed 134 00:07:35,840 --> 00:07:39,720 Speaker 4: the President to invoke in a number of other instances 135 00:07:39,760 --> 00:07:43,120 Speaker 4: to ignore statutes, to ignore law, and to trample on 136 00:07:43,680 --> 00:07:46,680 Speaker 4: people's rights. And so that's going to be That's part 137 00:07:46,720 --> 00:07:48,520 Speaker 4: of why also this is a big case, because this 138 00:07:48,600 --> 00:07:50,360 Speaker 4: is not just a big case for the Federal Reserve. 139 00:07:50,680 --> 00:07:52,320 Speaker 4: It's also just a big case for the rule of 140 00:07:52,400 --> 00:07:54,640 Speaker 4: law in our system and the extent to which we 141 00:07:54,680 --> 00:07:56,800 Speaker 4: are a government of laws and not of people. 142 00:07:57,240 --> 00:08:00,840 Speaker 3: These are extremely important things that we have to get across. 143 00:08:01,000 --> 00:08:03,680 Speaker 3: What happens now in terms of like the questions, because 144 00:08:03,680 --> 00:08:05,760 Speaker 3: she's gonna fight it. I believe her lawyers put out 145 00:08:05,760 --> 00:08:09,040 Speaker 3: a statement last night. What's your understanding of how things 146 00:08:09,040 --> 00:08:11,400 Speaker 3: could play out in terms of like even her going 147 00:08:11,440 --> 00:08:14,640 Speaker 3: to her office at the building and being included meetings, 148 00:08:14,680 --> 00:08:16,680 Speaker 3: because these processes take time. If it's going to go 149 00:08:16,760 --> 00:08:17,400 Speaker 3: to Supreme Court. 150 00:08:17,480 --> 00:08:20,560 Speaker 4: Yeah, this is a very messy moment. And so the 151 00:08:21,160 --> 00:08:27,920 Speaker 4: initial clarification will come from the courts, because presumably Lisa 152 00:08:27,920 --> 00:08:32,439 Speaker 4: Cook's lawyers will seek a preliminary injunction reinstating her from 153 00:08:32,520 --> 00:08:35,160 Speaker 4: federal district court in the same way that Gwyn Wilcox 154 00:08:35,160 --> 00:08:39,440 Speaker 4: a the NLRB did that Badoya at the FTC did 155 00:08:39,480 --> 00:08:42,960 Speaker 4: when they were removed earlier this year. Right, So we 156 00:08:43,080 --> 00:08:45,960 Speaker 4: know how that process kind of works. But there's this 157 00:08:46,000 --> 00:08:50,760 Speaker 4: period of time between when the president tries to fire 158 00:08:50,840 --> 00:08:55,280 Speaker 4: someone who is statutorily protected from being fired by the president, 159 00:08:55,720 --> 00:08:58,960 Speaker 4: and the federal courts make a decision about whether that 160 00:08:59,000 --> 00:09:00,920 Speaker 4: person's going to get to continue to work in their 161 00:09:01,000 --> 00:09:05,920 Speaker 4: job while the litigation is going on. Where who knows? 162 00:09:06,360 --> 00:09:10,800 Speaker 4: So right now to your question, the Federal Reserve Board 163 00:09:10,960 --> 00:09:14,880 Speaker 4: and Jay Powell as the active executive officer of the Board, 164 00:09:15,800 --> 00:09:19,040 Speaker 4: is in a difficult position where they have to decide 165 00:09:19,679 --> 00:09:24,040 Speaker 4: does she still have her office And they're under an 166 00:09:24,080 --> 00:09:28,439 Speaker 4: independent obligation to follow the law. Right, they don't get 167 00:09:28,440 --> 00:09:31,320 Speaker 4: to just say the President told me so. They swore 168 00:09:31,360 --> 00:09:33,320 Speaker 4: to uphold the law. So they have to make their 169 00:09:33,360 --> 00:09:36,480 Speaker 4: own determination about whether she was in fact fired by 170 00:09:36,520 --> 00:09:39,360 Speaker 4: a social media post. Right, that didn't follow any of 171 00:09:39,400 --> 00:09:42,959 Speaker 4: the proper process, and it's an invalid firing. On its 172 00:09:42,960 --> 00:09:46,160 Speaker 4: face and under existing law, it doesn't have any legal effect. 173 00:09:46,200 --> 00:09:47,800 Speaker 4: Maybe Supreme Court is going to change the law like 174 00:09:47,840 --> 00:09:51,760 Speaker 4: they've done before, but I think Powell here has to 175 00:09:51,840 --> 00:09:55,040 Speaker 4: let her in the building and that's going to create 176 00:09:55,200 --> 00:10:00,839 Speaker 4: a separate showdown between the board, its lawyers, how as 177 00:10:00,920 --> 00:10:03,640 Speaker 4: active executive officer of the Board, and the president. 178 00:10:04,120 --> 00:10:07,640 Speaker 2: That's interesting. So there's two parallel legal arguments going on, 179 00:10:07,640 --> 00:10:10,240 Speaker 2: one at the FED and one in the court system. 180 00:10:10,280 --> 00:10:12,080 Speaker 2: Just going back to the court system for a second, 181 00:10:12,600 --> 00:10:16,839 Speaker 2: we have, of course, had firings at other agencies this year, 182 00:10:17,000 --> 00:10:20,600 Speaker 2: and as part of those, the Supreme Court basically carved 183 00:10:20,640 --> 00:10:24,600 Speaker 2: out an exception for the FED, saying that I think 184 00:10:24,800 --> 00:10:26,840 Speaker 2: it's uniquely structured, and. 185 00:10:27,120 --> 00:10:28,160 Speaker 3: It's different because it's different. 186 00:10:28,320 --> 00:10:30,520 Speaker 2: It's different because it's different because we said, yeah, there's 187 00:10:30,559 --> 00:10:32,920 Speaker 2: a carve out. Would that come into play here or 188 00:10:32,960 --> 00:10:34,640 Speaker 2: could they just cancel. 189 00:10:34,320 --> 00:10:37,920 Speaker 4: The carve out? So the carve out isn't direct to 190 00:10:38,000 --> 00:10:42,120 Speaker 4: this issue. Okay. So there are these other independent agencies, 191 00:10:42,200 --> 00:10:46,240 Speaker 4: just like the FED, Federal Trade Commission, SEC, National Labor 192 00:10:46,280 --> 00:10:49,120 Speaker 4: Relations Board, and they all say that people have ten 193 00:10:49,160 --> 00:10:50,760 Speaker 4: year in office for a term of years and the 194 00:10:50,800 --> 00:10:54,000 Speaker 4: president can only remove for cause and we were talking 195 00:10:54,000 --> 00:10:57,600 Speaker 4: about how usually those causes are specified. What the President 196 00:10:57,640 --> 00:11:00,520 Speaker 4: did earlier this year is say, I don't need to 197 00:11:00,520 --> 00:11:02,960 Speaker 4: follow that statute. I don't have any cause to remove you. 198 00:11:03,480 --> 00:11:06,520 Speaker 4: I'm just going to remove you as if you serve 199 00:11:06,600 --> 00:11:09,640 Speaker 4: at pleasure because under the Constitution, I can do that. 200 00:11:10,080 --> 00:11:11,720 Speaker 4: And that case we're not to the Supreme Court, and 201 00:11:11,720 --> 00:11:13,840 Speaker 4: that's what you're referring to in that case is called Wilcox. 202 00:11:13,920 --> 00:11:16,760 Speaker 4: And in May the Court said, yeah, you're probably gonna 203 00:11:16,760 --> 00:11:19,840 Speaker 4: win on that President, because we're into this theory of 204 00:11:19,840 --> 00:11:24,199 Speaker 4: your inherent powers that's pretty much unmoored from the American 205 00:11:24,280 --> 00:11:27,679 Speaker 4: legal tradition. But we're going to probably endorse it when 206 00:11:27,720 --> 00:11:29,800 Speaker 4: we get this case on the merits next year. And 207 00:11:29,880 --> 00:11:32,200 Speaker 4: so in the meantime, all these people are out of jobs. 208 00:11:32,480 --> 00:11:34,640 Speaker 4: And then they said out of nowhere because the case 209 00:11:34,679 --> 00:11:38,160 Speaker 4: doesn't involve the Federal Reserve at all, they say, oh, 210 00:11:38,200 --> 00:11:40,120 Speaker 4: by the way, just in case anybody is like watching, 211 00:11:40,160 --> 00:11:42,560 Speaker 4: who's wondering, like, can I fire people at the Federal Reserve? 212 00:11:43,000 --> 00:11:46,119 Speaker 4: We think the Federal Reserve probably is a different situation. 213 00:11:46,440 --> 00:11:49,440 Speaker 4: But that's with respect to whether the cause language is 214 00:11:49,520 --> 00:11:51,839 Speaker 4: binding on the president. And so the president read that 215 00:11:52,320 --> 00:11:55,320 Speaker 4: this is actually all downstream of the Wilcox order from 216 00:11:55,360 --> 00:11:58,600 Speaker 4: the Court because the White House lawyer said, Okay, now 217 00:11:58,600 --> 00:12:01,239 Speaker 4: we're going to go out and try to find causes 218 00:12:01,640 --> 00:12:04,760 Speaker 4: that we can sort of manufacture, cook up and push 219 00:12:04,800 --> 00:12:08,960 Speaker 4: the envelope on this legal provision. And so the Court 220 00:12:09,040 --> 00:12:14,199 Speaker 4: didn't protect the Federal Reserve from this in Wilcox and 221 00:12:14,280 --> 00:12:17,880 Speaker 4: sometimes invited the White House to try this. And so 222 00:12:18,000 --> 00:12:21,439 Speaker 4: now the case we'll go back to the Supreme Court, presumably, 223 00:12:21,720 --> 00:12:24,160 Speaker 4: and the Supreme Court will have to say does this 224 00:12:24,280 --> 00:12:27,440 Speaker 4: for cause thing? Is it for real or is it 225 00:12:27,559 --> 00:12:29,960 Speaker 4: just a paper requirement? Is it just pro formed because 226 00:12:29,960 --> 00:12:33,400 Speaker 4: the President is treating it like it's nothing more than 227 00:12:33,440 --> 00:12:36,720 Speaker 4: putting out a press release alongside the removal, which is 228 00:12:37,040 --> 00:12:40,440 Speaker 4: definitely not how Congress understood it when they wrote the 229 00:12:40,440 --> 00:12:44,760 Speaker 4: Federal Reserve Act, or how this was litigated in the 230 00:12:44,800 --> 00:12:47,720 Speaker 4: past when this was a bigger issue in American government. 231 00:12:48,480 --> 00:12:52,160 Speaker 3: This is really important clarification that when Trump fired some 232 00:12:52,200 --> 00:12:54,920 Speaker 3: of those other people, they were trying to establish the 233 00:12:54,960 --> 00:12:57,679 Speaker 3: notion that these sort of so called like independent agencies 234 00:12:57,840 --> 00:13:01,080 Speaker 3: were actually just constitutionally illegitimate. There was a specific point 235 00:13:01,120 --> 00:13:05,520 Speaker 3: there exactly, and so there was no pretext for invoking 236 00:13:05,559 --> 00:13:07,640 Speaker 3: the cause, because that was the goal. The goal was 237 00:13:07,679 --> 00:13:12,320 Speaker 3: to establish their illegitimacy, not to necessarily change the partisan 238 00:13:12,520 --> 00:13:15,560 Speaker 3: makeup per se, though maybe that was the case in 239 00:13:15,600 --> 00:13:19,120 Speaker 3: the case of the FED. I mean, you say that 240 00:13:19,240 --> 00:13:24,200 Speaker 3: this firing was downstream from the Wilcox decision, But wasn't. 241 00:13:24,280 --> 00:13:27,560 Speaker 3: I mean, the four cause ability has never like, the 242 00:13:27,640 --> 00:13:30,800 Speaker 3: idea that you could fire for cause has always been there, 243 00:13:30,840 --> 00:13:34,040 Speaker 3: right Like, they didn't need the carve out from Wilcox 244 00:13:34,240 --> 00:13:36,800 Speaker 3: to fire someone for cause, even if even if we 245 00:13:36,920 --> 00:13:39,360 Speaker 3: dispute that this actually rises to that level. 246 00:13:39,559 --> 00:13:41,719 Speaker 4: Yeah, I think this is a great question, and it's 247 00:13:41,760 --> 00:13:45,360 Speaker 4: come up a few times in conversations that I've had. 248 00:13:45,960 --> 00:13:48,920 Speaker 4: I think the thing to understand about the Wilcox Order 249 00:13:49,760 --> 00:13:52,800 Speaker 4: is how radical it was for the Supreme Court to 250 00:13:52,880 --> 00:13:57,440 Speaker 4: say that this bedrock precedent on which the US government 251 00:13:57,559 --> 00:14:02,600 Speaker 4: is designed is probably invalid, and therefore the president can 252 00:14:02,600 --> 00:14:05,000 Speaker 4: fire all these people don't get to work while they 253 00:14:05,000 --> 00:14:07,760 Speaker 4: litigate their cases. They're out of their jobs. And so 254 00:14:08,000 --> 00:14:13,360 Speaker 4: the Court in Wilcox embraced such a broad conception of 255 00:14:13,400 --> 00:14:21,160 Speaker 4: the presidency in such a sort of unorthodox, unmoored fashion 256 00:14:21,920 --> 00:14:26,960 Speaker 4: that the main signal from that isn't that the FED 257 00:14:27,080 --> 00:14:29,880 Speaker 4: is protected, but it's that this court is going to 258 00:14:30,440 --> 00:14:34,680 Speaker 4: bend over backwards for very broad conception of the president's power. 259 00:14:34,720 --> 00:14:38,040 Speaker 4: And so when you read that as a lawyer for 260 00:14:38,120 --> 00:14:42,360 Speaker 4: the president, what you think is, Okay, they don't want 261 00:14:42,400 --> 00:14:45,840 Speaker 4: to be tagged with concluding that central bank independence is 262 00:14:45,960 --> 00:14:49,200 Speaker 4: on its face legally invalid in the United States. But 263 00:14:49,840 --> 00:14:52,400 Speaker 4: they also are going to let us do what we want. 264 00:14:52,840 --> 00:14:55,560 Speaker 4: And so the thing to do is to now push 265 00:14:55,600 --> 00:14:59,200 Speaker 4: on this for cause and act like it's not actually 266 00:14:59,480 --> 00:15:02,400 Speaker 4: a very Garris bar, and we'll get what we want. 267 00:15:02,720 --> 00:15:06,360 Speaker 4: Because it was so surprising that they got what they 268 00:15:06,400 --> 00:15:10,160 Speaker 4: want with respect to the FTC and the NRB. And 269 00:15:10,240 --> 00:15:13,120 Speaker 4: so there's this sense that people had after Willcox, oh, 270 00:15:13,160 --> 00:15:16,120 Speaker 4: the Court is protecting the FED. But the real message 271 00:15:16,400 --> 00:15:20,360 Speaker 4: in Willcox that overrode that sense of protection is the 272 00:15:20,440 --> 00:15:23,240 Speaker 4: Court's going to come up with reasons when push comes 273 00:15:23,280 --> 00:15:26,120 Speaker 4: to shove, not to pen in the president. 274 00:15:41,520 --> 00:15:44,360 Speaker 2: Why do you think the Trump administration wants to exert 275 00:15:44,440 --> 00:15:47,520 Speaker 2: control over the Federal Reserve, Because you know, we just 276 00:15:47,560 --> 00:15:50,480 Speaker 2: had a speech from Jerome Powell at Jackson Hole where 277 00:15:50,520 --> 00:15:53,720 Speaker 2: he opened the door to interest rate cuts in September, 278 00:15:53,880 --> 00:15:56,960 Speaker 2: So it would seem things are sort of heading in 279 00:15:57,040 --> 00:16:00,520 Speaker 2: the direction that Trump wants, even though I point out 280 00:16:00,520 --> 00:16:03,040 Speaker 2: there's a tension there because he says the economy is great, 281 00:16:03,040 --> 00:16:07,160 Speaker 2: but also he wants great cuts. Why is this important 282 00:16:07,160 --> 00:16:07,680 Speaker 2: to him? 283 00:16:07,800 --> 00:16:07,920 Speaker 1: So? 284 00:16:07,960 --> 00:16:13,120 Speaker 4: The Federal Reserve is the most powerful agency in the 285 00:16:13,160 --> 00:16:17,320 Speaker 4: federal government, and alongside the Supreme Court in the White House, 286 00:16:18,200 --> 00:16:21,720 Speaker 4: those are the three most powerful government bodies in the 287 00:16:21,840 --> 00:16:26,120 Speaker 4: United States in twenty twenty five. And the Fed's power 288 00:16:26,320 --> 00:16:31,120 Speaker 4: has expanded dramatically since the two thousand and eight financial crisis, 289 00:16:31,800 --> 00:16:35,680 Speaker 4: and it has turned its balance sheet into an active 290 00:16:35,720 --> 00:16:41,480 Speaker 4: policy tool. And that means that it is a very 291 00:16:42,560 --> 00:16:46,440 Speaker 4: shiny prize for a president that does not want to 292 00:16:46,480 --> 00:16:50,840 Speaker 4: have to go to Congress for appropriations to carry out 293 00:16:50,920 --> 00:16:55,240 Speaker 4: various policies. Here you have an infinitely extensible balance sheet. 294 00:16:55,400 --> 00:17:01,000 Speaker 4: Now it's meant to be used to ensure stable monetary 295 00:17:01,000 --> 00:17:05,000 Speaker 4: expansion over time, but what we've seen is it can 296 00:17:05,040 --> 00:17:07,200 Speaker 4: be put to other uses. I think some of those 297 00:17:07,240 --> 00:17:10,480 Speaker 4: are legally questionable, but you can imagine a president who 298 00:17:10,520 --> 00:17:15,680 Speaker 4: doesn't believe in following laws, believes an inherent executive authority 299 00:17:15,720 --> 00:17:20,000 Speaker 4: with control over an infinitely extensible central bank balance sheet 300 00:17:21,280 --> 00:17:23,879 Speaker 4: can do all sorts of different stuff. So this is 301 00:17:23,920 --> 00:17:27,119 Speaker 4: a very shiny prize. Even beyond interest rate policy, I 302 00:17:27,160 --> 00:17:31,080 Speaker 4: think I wouldn't under emphasize the interest rate policy component. Yes, 303 00:17:31,200 --> 00:17:34,760 Speaker 4: Trump wants lower rates, and there's an indication that rates 304 00:17:34,800 --> 00:17:37,120 Speaker 4: will be lowered at the next meeting, but not by 305 00:17:37,160 --> 00:17:40,240 Speaker 4: the amount Trump is demanding. Trump wants to run a 306 00:17:40,280 --> 00:17:44,679 Speaker 4: boom economy, overheated economy, and in order to do that, 307 00:17:44,720 --> 00:17:49,400 Speaker 4: he wants to create very easy credit conditions and loose 308 00:17:49,440 --> 00:17:53,560 Speaker 4: monetary policy and monetary expansion. And the FED is not 309 00:17:53,600 --> 00:17:55,320 Speaker 4: going to do that on its own. He's going to 310 00:17:55,359 --> 00:17:57,600 Speaker 4: have to take over the institution if he wants them 311 00:17:57,600 --> 00:18:00,200 Speaker 4: to do that. The whole institution is designed not to 312 00:18:00,240 --> 00:18:05,200 Speaker 4: engage in such a boom and boss type of macroeconomic management. 313 00:18:05,280 --> 00:18:07,479 Speaker 4: And that's actively what he wants, and I think what 314 00:18:07,520 --> 00:18:10,560 Speaker 4: we will get, and the markets are only very slowly 315 00:18:10,600 --> 00:18:11,280 Speaker 4: waking up to that. 316 00:18:12,720 --> 00:18:15,760 Speaker 3: Yeah, it does seem well, I mean who knows. I mean, 317 00:18:15,760 --> 00:18:17,760 Speaker 3: you look at some of the the way asset prices 318 00:18:17,800 --> 00:18:20,159 Speaker 3: are flying. Maybe the market is cluded to. 319 00:18:20,440 --> 00:18:22,679 Speaker 4: Maybe the market is included. Yes, because the way this 320 00:18:22,760 --> 00:18:25,359 Speaker 4: goes is we get asset bubble, right, we get a 321 00:18:25,359 --> 00:18:28,439 Speaker 4: lot of leverage in the financial system because we deregulate 322 00:18:28,480 --> 00:18:32,160 Speaker 4: bank balance sheets and we lower shorter interest rates. That's 323 00:18:32,160 --> 00:18:36,360 Speaker 4: gonna lead to lots of credit expansion. Yeah, and that's 324 00:18:36,400 --> 00:18:38,800 Speaker 4: gonna be an inflationary boom. The reason why we don't 325 00:18:38,840 --> 00:18:41,359 Speaker 4: run the economy like that normally is it ends in tears. 326 00:18:42,320 --> 00:18:45,080 Speaker 4: There's gonna be a bus later. But you know, as 327 00:18:45,280 --> 00:18:48,240 Speaker 4: I believe it was Chuck Prince once said, when the 328 00:18:48,320 --> 00:18:50,399 Speaker 4: music is playing, keep dancing. 329 00:18:50,480 --> 00:18:53,320 Speaker 2: Maybe the bust will be four years later, right, and 330 00:18:53,359 --> 00:18:56,600 Speaker 2: Trump won't necessarily care if he's out of the presidency. 331 00:18:56,600 --> 00:18:59,320 Speaker 4: We could certainly go for years. You know, we've seen 332 00:18:59,840 --> 00:19:05,600 Speaker 4: a rationally exuberant markets led by actual underline structural credit expansion, 333 00:19:06,440 --> 00:19:08,520 Speaker 4: feel bubbles for for a long period of time. 334 00:19:08,680 --> 00:19:09,960 Speaker 3: By the way, I think if I were like a 335 00:19:10,000 --> 00:19:12,720 Speaker 3: banker or a lender or a professional trader, I wouldn't 336 00:19:12,720 --> 00:19:13,960 Speaker 3: know I would get out right at the top. 337 00:19:14,040 --> 00:19:15,960 Speaker 4: I just have that I could do it. 338 00:19:15,960 --> 00:19:16,800 Speaker 3: It's like, let's keep it. 339 00:19:16,760 --> 00:19:18,879 Speaker 2: Going, and why doesn't everyone do that. 340 00:19:19,000 --> 00:19:21,119 Speaker 3: I know it's a bubble or boom, but I just 341 00:19:21,200 --> 00:19:23,440 Speaker 3: have this feeling that I would be able to time 342 00:19:23,440 --> 00:19:25,000 Speaker 3: the top podcast. 343 00:19:25,040 --> 00:19:27,280 Speaker 4: That's how you know, that's where you get your special insight. 344 00:19:27,760 --> 00:19:32,280 Speaker 3: Could the question of whether Powell, and again you know, 345 00:19:32,359 --> 00:19:34,640 Speaker 3: who knows what's going to happen today, let Cook back 346 00:19:34,640 --> 00:19:38,120 Speaker 3: into the building. Could that be a pretext for an 347 00:19:38,160 --> 00:19:39,600 Speaker 3: attack on Powell himself? 348 00:19:40,440 --> 00:19:45,439 Speaker 4: Absolutely, I mean I think that this president or the 349 00:19:45,480 --> 00:19:49,119 Speaker 4: White House more generally, has floated any number of possible 350 00:19:49,680 --> 00:19:54,120 Speaker 4: sort of constructed cases to remove officials, and so they 351 00:19:54,160 --> 00:19:58,760 Speaker 4: obviously floated the renovations. But a failure to follow a 352 00:19:58,800 --> 00:20:02,720 Speaker 4: presidential order. Everything the president says is not law. This 353 00:20:02,840 --> 00:20:05,760 Speaker 4: is a common misconception, but this president thinks it is law, 354 00:20:06,000 --> 00:20:08,119 Speaker 4: and so it would be easy for the president to 355 00:20:08,119 --> 00:20:08,840 Speaker 4: say this is law. 356 00:20:08,920 --> 00:20:10,879 Speaker 3: But you know, I'm sure these are the types of 357 00:20:10,920 --> 00:20:13,640 Speaker 3: things that people debate forever in law schools, and well, 358 00:20:13,680 --> 00:20:16,040 Speaker 3: every time we talk to Laures, I'm reminded it's like 359 00:20:16,680 --> 00:20:19,440 Speaker 3: all laws just what people agree as law at any 360 00:20:19,480 --> 00:20:23,800 Speaker 3: given moment, right including the most anything can be anything 361 00:20:23,800 --> 00:20:27,320 Speaker 3: can be reinterpreted, anything can be contrived, anything can be 362 00:20:27,359 --> 00:20:29,840 Speaker 3: turned into a loophole. Like at the end, like the 363 00:20:29,880 --> 00:20:34,000 Speaker 3: only thing Butcherson written laws is some sort of stomach 364 00:20:34,119 --> 00:20:35,280 Speaker 3: to enforce them. 365 00:20:35,359 --> 00:20:39,840 Speaker 4: Right, Yes, law is a social coordin any mechanism, and 366 00:20:40,160 --> 00:20:42,280 Speaker 4: in order for it to work, we have to have 367 00:20:42,320 --> 00:20:45,080 Speaker 4: the shared understanding and follow it. And that's why things 368 00:20:45,119 --> 00:20:48,680 Speaker 4: like this have such high stakes, because when a government 369 00:20:48,760 --> 00:20:52,600 Speaker 4: actor flagrantly violates what the prior understanding is, it sort 370 00:20:52,600 --> 00:20:56,440 Speaker 4: of tears at the fabric of law as a consensus 371 00:20:56,480 --> 00:20:57,399 Speaker 4: building mechanism. 372 00:20:57,520 --> 00:21:00,960 Speaker 3: By the way eleven twenty six headline and just flashing 373 00:21:01,160 --> 00:21:03,320 Speaker 3: through the terminal, lawyer for Fence Cook says you will 374 00:21:03,320 --> 00:21:05,000 Speaker 3: file lawsuit challenging firing. 375 00:21:05,040 --> 00:21:09,600 Speaker 2: So that's confirmed, clearly, still a live issue. Just to recap, 376 00:21:10,440 --> 00:21:13,240 Speaker 2: I just want someone to lay out this argument very clearly, 377 00:21:13,400 --> 00:21:15,440 Speaker 2: and you tend to do that. 378 00:21:15,560 --> 00:21:15,760 Speaker 1: Love. 379 00:21:16,160 --> 00:21:19,119 Speaker 2: You tend to do it very well. So why is 380 00:21:19,200 --> 00:21:21,639 Speaker 2: central bank independence important? 381 00:21:22,640 --> 00:21:26,120 Speaker 4: This is a big question that could probably support an 382 00:21:26,280 --> 00:21:29,520 Speaker 4: entire episode, and I think you guys have we have 383 00:21:29,560 --> 00:21:32,880 Speaker 4: explored other times, and you've explored it with some other guests. 384 00:21:32,920 --> 00:21:37,159 Speaker 4: I saw your episode with Corolla Binder. Central bank independence 385 00:21:37,200 --> 00:21:40,000 Speaker 4: is important for the reasons that the economists put forward, 386 00:21:40,400 --> 00:21:44,320 Speaker 4: which have to do with credibility and long term decision 387 00:21:44,320 --> 00:21:50,439 Speaker 4: making being best furthered by special purpose officials. Right, you 388 00:21:50,440 --> 00:21:54,119 Speaker 4: don't want to overload people with competing priorities you're going 389 00:21:54,200 --> 00:21:56,920 Speaker 4: to get less quality policy. And so that's why you 390 00:21:56,960 --> 00:21:59,320 Speaker 4: have a fourteen year term of office here, because we 391 00:21:59,440 --> 00:22:02,560 Speaker 4: want FED officials making long term decisions. We don't want 392 00:22:02,600 --> 00:22:06,280 Speaker 4: short term decisions about changes in the money supply. And 393 00:22:06,359 --> 00:22:09,959 Speaker 4: so all of that's true. There's a time in consistency problem. 394 00:22:10,320 --> 00:22:13,919 Speaker 4: This is a long term policy making domain. But I 395 00:22:13,960 --> 00:22:17,480 Speaker 4: actually think right now it's important to emphasize something that's 396 00:22:17,920 --> 00:22:21,320 Speaker 4: not actually a big part or really any part of 397 00:22:21,320 --> 00:22:23,720 Speaker 4: the economics literature, and that has to do with the 398 00:22:23,760 --> 00:22:28,840 Speaker 4: separation of powers and democracy. And you don't want to 399 00:22:28,880 --> 00:22:32,639 Speaker 4: concentrate too much power in a government in any one person. 400 00:22:32,800 --> 00:22:37,399 Speaker 4: And that's actually a foundational idea in the American constitutional system. Arguably, 401 00:22:37,760 --> 00:22:41,120 Speaker 4: the founder went too far in separating powers. They made 402 00:22:41,119 --> 00:22:43,600 Speaker 4: it very difficult for the government to do stuff. And 403 00:22:43,680 --> 00:22:47,320 Speaker 4: what's happened here is we've concentrated power in the president 404 00:22:47,800 --> 00:22:51,120 Speaker 4: in a way that would have all of the framers 405 00:22:51,119 --> 00:22:54,920 Speaker 4: of the constitution rolling in their graves and to allow 406 00:22:55,000 --> 00:22:58,879 Speaker 4: the executive to control the money supply. That's literally an 407 00:22:58,920 --> 00:23:01,080 Speaker 4: issue that led to the glory of revolution in sixteen 408 00:23:01,119 --> 00:23:03,560 Speaker 4: eighty eight. It's one of the key concerns of the 409 00:23:03,600 --> 00:23:06,760 Speaker 4: founders is to separate control of the money supply from 410 00:23:06,760 --> 00:23:10,880 Speaker 4: the executive And so central bank independence is also about 411 00:23:11,480 --> 00:23:15,960 Speaker 4: good government and preventing tyranny. And Alexander Hamilton said this 412 00:23:16,040 --> 00:23:19,480 Speaker 4: in his report on a National Bank, And so it's 413 00:23:19,520 --> 00:23:24,240 Speaker 4: not just about having optimal long term monetary policy, it's 414 00:23:24,320 --> 00:23:28,600 Speaker 4: also about preventing one person from controlling way too much. 415 00:23:28,800 --> 00:23:29,000 Speaker 1: You know. 416 00:23:29,359 --> 00:23:32,280 Speaker 3: For the maybe the last fifteen years, or maybe from 417 00:23:32,280 --> 00:23:35,359 Speaker 3: twenty ten through twenty through COVID, there was like a 418 00:23:35,440 --> 00:23:39,200 Speaker 3: left critique of central bank independence, but it was very 419 00:23:39,280 --> 00:23:41,040 Speaker 3: you know, it seemed to be very focused on this 420 00:23:41,160 --> 00:23:45,160 Speaker 3: idea that the central bank, by having this like you know, 421 00:23:45,400 --> 00:23:49,960 Speaker 3: a was just not democratically accountable, that it was accountable 422 00:23:50,000 --> 00:23:52,680 Speaker 3: to the interests of money holders to not lose the 423 00:23:52,760 --> 00:23:55,440 Speaker 3: value of their money, that that was constraining the rebound 424 00:23:55,520 --> 00:24:00,359 Speaker 3: of labor, et cetera. Are those critiques suddenly vanishing because 425 00:24:00,480 --> 00:24:04,160 Speaker 3: it feels more important to make the argument that you're making. 426 00:24:04,760 --> 00:24:07,199 Speaker 3: So I always felt those critiques were part right and 427 00:24:07,240 --> 00:24:10,199 Speaker 3: part wrong, okay, And the part that was right is 428 00:24:10,240 --> 00:24:12,960 Speaker 3: that the central bank in the United States was structured 429 00:24:13,000 --> 00:24:15,560 Speaker 3: in a way that made it too responsive to financial 430 00:24:15,560 --> 00:24:20,760 Speaker 3: interests and not responsive enough to the Congress and to 431 00:24:20,880 --> 00:24:24,439 Speaker 3: the American people's interest, and that led to an excessively 432 00:24:24,520 --> 00:24:28,520 Speaker 3: tight monetary policy over an extended period of time. But 433 00:24:29,119 --> 00:24:32,960 Speaker 3: the solution to that is not to have a federal 434 00:24:32,960 --> 00:24:35,679 Speaker 3: reserve under the control of the White House. That is 435 00:24:35,760 --> 00:24:40,199 Speaker 3: not a solution to an insufficiently democratic monetary policy. The 436 00:24:40,240 --> 00:24:44,240 Speaker 3: solution is to change the structure of the federal reserve 437 00:24:44,280 --> 00:24:50,520 Speaker 3: system and who influences those officials. And that means increasing 438 00:24:50,560 --> 00:24:54,399 Speaker 3: the influence of Congress. It might mean increasing opportunities for 439 00:24:54,480 --> 00:24:56,880 Speaker 3: judicial review. There's almost no judicial review of the FED. 440 00:24:57,240 --> 00:25:01,840 Speaker 4: It might mean removing the bankers from the boards of 441 00:25:01,880 --> 00:25:04,720 Speaker 4: the regional federal reserve banks. It might mean changing the 442 00:25:04,760 --> 00:25:08,440 Speaker 4: FED responsibilities and the statutory scheme that it's executing. There 443 00:25:08,440 --> 00:25:11,680 Speaker 4: are all sorts of ways to create an administrative agency 444 00:25:12,000 --> 00:25:16,040 Speaker 4: that is more responsive to democratic interests besides putting it 445 00:25:16,119 --> 00:25:19,800 Speaker 4: under the president. And actually putting an agency under the president, 446 00:25:20,119 --> 00:25:22,280 Speaker 4: we have actually a bunch of experience with what that 447 00:25:22,320 --> 00:25:26,080 Speaker 4: looks like, and that makes most policy as a general matter, 448 00:25:26,280 --> 00:25:30,720 Speaker 4: more favorable to wealthy business interests. And so there's definitely 449 00:25:30,720 --> 00:25:34,600 Speaker 4: a valid critique that central bank independence as we knew 450 00:25:34,640 --> 00:25:38,800 Speaker 4: it as central banks were constructed led to a bias 451 00:25:38,840 --> 00:25:42,800 Speaker 4: in central bank policy towards certain interests. But the solution 452 00:25:43,320 --> 00:25:46,239 Speaker 4: to that problem isn't let's bring in the president that 453 00:25:46,359 --> 00:25:50,119 Speaker 4: will make the central bank policy more appealing and appropriate. 454 00:25:50,680 --> 00:25:53,320 Speaker 2: Lov monand thank you so much for coming back on 455 00:25:53,400 --> 00:25:57,840 Speaker 2: odd Lots for yet another central bank independence episode. Appreciate it. 456 00:25:58,080 --> 00:25:58,920 Speaker 4: Thank you for having me. 457 00:26:12,400 --> 00:26:14,760 Speaker 2: Joe always good to get levin. I feel like he 458 00:26:14,840 --> 00:26:18,119 Speaker 2: explains the issue very very clearly. I guess we'll see 459 00:26:18,240 --> 00:26:21,640 Speaker 2: what happens both in the court system and also within 460 00:26:21,680 --> 00:26:23,960 Speaker 2: the FED itself, because I thought it was really interesting 461 00:26:24,040 --> 00:26:27,280 Speaker 2: this idea of like two parallel legal tracks here where 462 00:26:27,320 --> 00:26:30,359 Speaker 2: the FED is obligated to also follow the law and 463 00:26:30,440 --> 00:26:33,399 Speaker 2: so they need to figure out for themselves whether or 464 00:26:33,440 --> 00:26:34,600 Speaker 2: not the firing is legal. 465 00:26:35,240 --> 00:26:37,879 Speaker 3: Absolutely, I mean this is very serious, like sort of 466 00:26:37,960 --> 00:26:41,520 Speaker 3: high stakes immediate stuff that there are questions that are 467 00:26:41,560 --> 00:26:44,600 Speaker 3: not easily resolved by the time they get to the 468 00:26:44,680 --> 00:26:48,080 Speaker 3: Supreme Court. I also just found his argument very like 469 00:26:48,119 --> 00:26:52,399 Speaker 3: persuasive that like an allegation is not caused right like 470 00:26:53,040 --> 00:26:56,040 Speaker 3: setting aside, like you know what constitutes caused, and maybe 471 00:26:56,040 --> 00:26:59,760 Speaker 3: that is ambiguous in this particular case, et cetera. 472 00:27:00,280 --> 00:27:02,680 Speaker 2: All we have is an allegation, right, they're supposed to 473 00:27:02,720 --> 00:27:05,560 Speaker 2: be due process to figure out whether or not the 474 00:27:05,600 --> 00:27:09,160 Speaker 2: allegation is in fact true. Also an allegation that didn't 475 00:27:09,200 --> 00:27:13,280 Speaker 2: actually happen while Lisa Cook was in office, which also 476 00:27:13,320 --> 00:27:17,760 Speaker 2: plays into that malfeasance argument. I'm guessing we'll have plenty 477 00:27:17,840 --> 00:27:20,440 Speaker 2: more to talk about on this topic in the future, 478 00:27:20,720 --> 00:27:22,280 Speaker 2: so shall we leave it there for now? 479 00:27:22,359 --> 00:27:23,120 Speaker 4: Let's leave it there. 480 00:27:23,320 --> 00:27:25,680 Speaker 2: This has been another episode of the Odd Lots podcast. 481 00:27:25,800 --> 00:27:28,920 Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway and. 482 00:27:28,880 --> 00:27:31,320 Speaker 3: I'm Joe Wisenthal. You can follow me at the Stalwart. 483 00:27:31,520 --> 00:27:35,040 Speaker 3: Follow our guest levmanon He's at Levmanond, follow our producers 484 00:27:35,080 --> 00:27:38,359 Speaker 3: Kerman Rodriguez at Kerman armandesh Oll Bennett at Dashbot and 485 00:27:38,440 --> 00:27:41,440 Speaker 3: Kilbrooks at Kilbrooks. 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All you need to do is 495 00:28:05,520 --> 00:28:08,280 Speaker 2: find the Bloomberg channel on Apple Podcasts and follow the 496 00:28:08,320 --> 00:28:10,359 Speaker 2: instructions there. Thanks for listening.