Lots of confusion here about the relevant legal issues. The Fed presents a much trickier question than other administrative agencies. Article II, Section 1 says: “The executive Power shall be vested in a President of the United States of America.” So if a government body exercises the “executive power,” it does so as a delegate of the President.
The FTC, for example, exercises classic “executive power.” It sues people for violating antitrust and consumer protection laws. It doesn’t get more “executive power” than that.
The Fed, by contrast, for the most part doesn’t exercise “executive power.” The Fed influences private conduct indirectly through open market operations as a bank. The Fed has ancillary functions in making and enforcing bank regulations, but arguably those are separable. That makes the independence of the Fed a much trickier question.
At the other extreme would be someone like the CEO of Amtrak. He can’t exercise the power of the state to prosecute you. It’s a train company that functions like any other company and happens to be government owned.
On the other hand, a major responsibility of the FTC commissioners is to develop regulations for interstate commerce, a power that is solely granted to Congress. Allowing the President to disregard the rules Congress specified when delegating that power to the FTC is usurping Congress's regulatory powers and giving them to the President. At best you could argue that the laws that created the FTC commingle congressional and executive power in an untenable manner, and it will need to be restructured. But in the meanwhile, you still have to justify why congress limiting the executive's enforcement power is worse that the executive usurping congress's regulatory power. And more-so why it is necessary to do so in an injunction, when it contradicts long-standing precedent.
No, that cuts the other way. The only reason we allow the FTC to create regulations with the force of law is by pretending that regulations are just an expression of how the executive will exercise its delegated discretion in enforcing the law. That makes rulemaking a quintessential “executive power.”
Your argument amounts to the idea that, because Congress has done one wrong thing (allow the executive branch to make laws) it should be permitted to do a second wrong thing (allow the Article I “executive power” to be exercised independently of the President). That makes no sense. You can’t reward Congress for doing an unconstitutional thing by letting them do a second unconstitutional thing.
How does the fed exist then, if not through executive power? The 10th amendment only allows the federal government to exercise powers expressly granted in the constitution.
Yes, but Article I, Section 8 says: “[The Congress shall have Power . . . ] To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”
McCulloch v. Maryland held that was broad enough to encompass chartering a federal bank: https://www.oyez.org/cases/1789-1850/17us316. Now, you have a point that it’s hard to see what enumerated power is served by creating a national bank. But I think it fairly falls within the enumerated power of providing for “the common defense and general welfare of the United States.” Remember, the huge issue at the time was how to pay for the military and what to do with all the war debt states had taken on. The first national bank was created to deal with that. So the central bank fit into the concept of the “general welfare of the United States” in a much more specific way than is usually imagined. That is to say, it doesn’t require a strained reading of “general welfare of the United States” that would be broad enough to basically gut the concept of enumerated powers. Instead, at the time, the management of the nation’s finances was seen as an existential threat to the new government as a whole.
I think the issue there is article I, unlike article II, expressly states what the legislative branch consists of. And it states it consists of the house and the senate. Nothing else.
So the reading of a bank that excecutes the law establishing it, I don't know how it could fall under anything but article ii. From your explanation, that wouldn't violate McCulloch v. Maryland authorization of the executive to execute the law.
Oh, I see what you’re saying. Article I, II, and III, create “Congress,” the “President,” and the “Supreme Court.” Those are the constitutional organs of the government, and are invested with the legislative, executive, and judicial powers, respectively.
The constitution assumes you can create various offices and departments associated with each of these organs, without spelling it out. But nothing turns on where anything “sits.” The question is whether any entity is exercising the “executive power,” or “legislative power,” or “judicial power.” For example, one of the first things Congress did in 1789 was to create the Marshall’s Service to provide security to courts. These were actually created as a body in the judicial branch. https://en.wikipedia.org/wiki/United_States_Marshals_Service. But they don’t exercise the “judicial power.” They exercise executive power—law enforcement.
So the Fed “sits” in the executive branch. But that doesn’t necessarily mean it exercises the “executive power” within the meaning of Article I, Section 1.
Wikipedia link provided says Marshalls are part of the DoJ, which is the executive branch.
>The constitution assumes you can create various offices and departments associated with each of these organ
Definitely a valid point. But the legislative is unique in that the constitution explicitly defines what can exercise the legislative power, and it's defined as consisting of the house and senate. The executive and judiciary has no such restriction.
At bottom it's kind of a kludge, which the US has unfortunately waited until now to test in the courts.
There are a lot of reasons why letting the executive control the Fed would be massively destabilizing. None of those reasons go to the constitutionality of the matter, so courts have generally chosen to sort of handwave it - and the executive hasn't really forced the issue.
Won't be able to depend on those factors much longer...
The phrase "power of the purse" does not appear in the constitution.
The idea that the members of the board of the federal reserve are structurally very distinct from appointed members of the NLRB or the FTC is ridiculous. It is just calvinball from the fact that the conservatives like the stability offered by the fed and don't like most of the other independent agencies that do things like empower unions and fine people committing financial fraud.
Article I expressly states the legislative branch "consist of a Senate and House of Representatives." So the fed can't be part of the legislative branch.
Further, having a bank that is not directly controlled by Government dates back to the first Congress (Washington, Hamilton):
> The suspicion of this would most probably be a canker, that would continually corrode the vitals of the credit of the Bank, and would be most likely to prove fatal in those situations, in which the public good would require, that they should be most sound and vigorous. It would indeed be little less, than a miracle, should the credit of the Bank be at the disposal of the Government, if in a long series of time, there was not experienced a calamitous abuse of it. It is true, that it would be the real interest of the Government not to abuse it; its genuine policy to husband and cherish it with the most guarded circumspection as an inestimable treasure. But what Government ever uniformly consulted its true interest, in opposition to the temptations of momentary exigencies? What nation was ever blessed with a constant succession of upright and wise Administrators?
Alright, you have a point here, as rayiner also pointed out.
The legislative powers more accurately are vested in only congress and senate, and not only that are defined as consisting of the house and senate.
Therefore the CBO exists in a rather odd area, where it cannot exercise any power unless it moves into the execute branch, or it somehow uses executive power.
The fed exists through its charter by Congress in the Federal Reserve Act of 1913. Clearly congress gets to define organs of government by law, no one seriously tries to make a 10th amendment case that Congress can't define organs of government.
The argument here is about independence. Can Congress define an organ of government (part of the executive branch as commonly understood) such that the president doesn't have the ability to directly administer it? Or is the president the head of all executive authority?
Similarly no one doubts that the intent of Congress was to do so here. And almost everyone thinks this has been a good thing, as macroeconomic policy can and has done terrible things in the hands of political actors in the past.
Pretty significant decision coming up - whether or not the president has total discretion in determining a for-cause dismissal. If they rule in his favor we'll quickly see the board replaced and the other cases involving removed independent agency heads will be more or less moot.
They went out of their way to tell Trump that the Fed is unique and special. Now we find out if they are willing to limit executive discretion to save the economy.
Unfortunately the recent rulings from the Supreme Court suggest that they will favor unlimited executive power whenever possible, at least when Trump is involved. Stare decisis doesn't apply when you have a 6-3 majority and a 930 page agenda to complete before the inevitable midterm backlash.
Somewhat related in rulings about the President's control of various agencies is the unitary executive, which has gained popularity (like originalism) in right-leaning circles in recent years (thanks Scalia):
Pre-Trump, one famous SCOTUS ruling determined that some agencies were / acted 'in between' branches:
> What the Court held in Humphrey’s Executor is that if an agency is of the latter kind—that is, the agency’s job description involves a mixture of quasi-legislative and quasi-judicial functions that are not within the President’s explicit Article II powers—then it is up to Congress to determine whether this kind of agency’s heads serve at the President’s pleasure. If such an agency’s role is essentially “to carry into effect legislative policies embodied in statute,” then Congress may protect its members against discharge except for good cause.
Telling that the Supreme Court will let Trump fire the FTC head (despite precedent against the exact same situation) but not the Fed governor. You can see the court just outright ruling based on the preferences and not law.
The kind of ruling at issue (on what preliminary measures to take to while a case is being adjudicated) are, under the law, based on a wide variety of considerations beyond the merits of the underlying case (though a judegement of likelihood of success on the merits is one of the factors, it is not the only one.)
The concrete impact of the act to be allowed or constrained is, very much, a part of that analysis, so situations which are otherwise legally similar in terms of the underlying issues but where the potential impacts in the interim of adjudication are different can very easily have very different outcomes at this level without judicial favoritism or misconduct.
Which isn't to say that there aren't problems with recent Supreme Court decisions in this area, just than you need more than “cases with similar underlying legal questions have different outcomes on preliminary orders governing what is allowed before the case is resolved” to make that case.
> Which isn't to say that there aren't problems with recent Supreme Court decisions in this area
The problems aren’t with the recent decisions, but the 1930s ones. I don’t think there’s a decision on the books today that was more clearly wrongly decided than Humphrey’s Executor. I mean:
> The commission is to be nonpartisan, and it must, from the very nature of its duties, act with entire impartiality. It is charged with the enforcement of no policy except the policy of the law. Its duties are neither political nor executive, but predominantly quasi-judicial and quasi-legislative.
The concession in italics should have made this a slam dunk case in the other direction. Enforcement of the law is the quintessential executive power. An English peasant in the 1600s could have gotten this one right. And where does the constitution say anything about Congress being able to create “quasi-judicial and quasi-legislative” bodies? The founders spilled all this ink to make three branches of government, but they really meant “j/k mix them all up into one unelected body if you want!”
That may be the case but it’s hard to look at recent rulings by the Supreme Court and direction of things happening within the executive as anything other than “anything for my friends, for everyone else the law”, whether that’s overturning Roe v Wade (and probably Griswald too sooner rather than later) or overturning the meaning of the words “well organized militia” in usurping the legislation’s ability to regulate private firearms.
Having different playbooks for players to follow depending on whether one team is for you or against is an interesting approach but one that’s been tried many times before and not one that will leave this country unified or in a better shape than it was found.
The examples you picked aren’t great to support your point. An alien with a copy of the Constitution and the Federalist Papers would easily discern that the document intends to afford greater protection to the right to bear arms than some right to bodily autonomy. As to these particular cases, even prominent liberals have questioned the soundness of the original decisions.
The Second Amendment says: “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”
There is nothing complicated about the prefatory clause. If the amendment read: “News reporting, being necessary to the public debate of a free State, the right of the people to free speech shall not be infringed,” nobody would say that only professional news reporters have a right to free speech. They would say that “the right of the people to free speech” refers to a preexisting right that belongs to “the people” and the introductory clause provides the rationale for protecting it. The meaning isn’t even confusing when you recall that, at the time, militias were “bring your own firearm.” You don’t even need to open up the Federalist Papers and read Hamilton’s writing on European monarchs disarming their people.
In contrast, there concededly is no “right of privacy” in the Constitution. Griswold turned to “emanations from penumbras” to find such a right. Nobody left of center would apply similar reasoning to find economic rights in the “emanations from penumbras” of the Contract Clause. This is such a case—Lochner—and folks on both sides agree it’s wrong. Griswold and Roe are just Lochner applied to sexual liberties rather than economic ones.
Even most left of center folks would struggle to write an opinion like Griswold and Roe today. They’re relics of an age when the Supreme Court was like a Yankee WASP version of Iran’s Guardian Council, ensuring compliance of temporal law with higher moral law.
An alien given a copy of the constitution knows that the constitution is not an enumeration of rights that people have, but carve outs specifically where the federal government can supersede the power of the individual and more importantly local governments.
The right to bodily autonomy as such is implicitly protected by the 9th amendment which states the constitution is not a set of positive enumeration of rights granted but instead limits placed on the power of government to take away all rights which are inherently ours.
Whether you find those rights because you want to look for it in the 4th amendment limits on governments right to invade your privacy is largely irrelevant.
I’ll also point out that regardless of the arguments on the 2nd amendment, historically regulation of arms was completely allowed and even today that’s allowed (eg you can’t get a nuclear weapon). And ignoring that is very interesting considering the current SCOTUS’s random “historic tradition” argument from conservatives.
The fig lead that they will use to justify this distinction was hinted at in Seila Law, another case when they allowed the firing of members of independent agencies: they will say that the Federal Reserve has a "long tradition of independence" that distinguishes it from newer agencies, even though they are all operated under the same law.
If that distinction sounds preposterous to you, then congratulations, you reached the same conclusion that Justice Jackson reached when she complained that the conservative majority is playing "Calvinball" to reach results-based decisions regardless of statute, precedent, and the Constitution.
For those who didn't grow up in the 90s, Calvinball is a reference to a fictional sport from the comic strip Calvin and Hobbes, in which the sport's rules are made up and change constantly.
The FTC is a government agency whereas the Fed is not. Part of the question being adjudicated here is how much control the president has over the Fed, since it's a quasi government body at most, and a 99% independent body at least.
Sure, the board is a board of federally appointed individuals. But the board is a subsection of the federal reserve systems. And even the board is kind of odd in it's structure, because the governors have staggered appointments and serve a term.
The whole federal reserve is also privately funded, and doesn't get money from congress.
From the outside it may appear like a regular federal agency, but it is very different from the FTC, DEA, FDA, DOE, etc.
> Sure, the board is a board of federally appointed individuals.
No, its a federal agency. Explicitly.
> But the board is a subsection of the federal reserve systems.
Yes, the Federal Reserve System is a different thing from the Board with a sui generis relation to the government, which would maybe be relevant if the personnel action involved some part of the system which was not the Board, but we are talking about a personnel action pertaining to the Board.
> And even the board is kind of odd in it's structure, because the governors have staggered appointments and serve a term.
That’s not at all special (particularly when comparing to the FTC), but typical of “independent” federal agencies (including the FTC), which tend to have fixed terms that are longer than a Presidential term (7 years for the FTC, 14 for the Fed Board), staggered terms, and an explicit statutory limits on the number of members of the body that can be from one political party.
This comment doesn't make sense in the context of a decision that went against the administration.
Justice Jackson said:
> This is Calvinball jurisprudence with a twist. Calvinball has only one rule: There are no fixed rules.6 We seem to have two: that one, and this Administration always wins.
Justice Jackson's quip was part of a different dissenting opinion. It doesn't make sense here because the decision regarding Cook, which went against the administration.
It's like claiming a game is rigged when your team won.
> You can see the court just outright ruling based on the preferences and not law.
And my reply was:
> The Supreme Court is playing "Calvinball" now, and that's not me saying it but (a member of) the Supreme Court saying it.
Who the Court decided for in the OP linked article is completely irrelevant to my reply.
It was merely reinforcing the idea that the Court appears to many to be making up the rules as they go along to suit their preferences, which is quite analogous to the rules for Calvinball.
My reply was not worded as, nor meant to be, an indication that I disagree with their ruling in the OP article.
How they ruled on any single specific matter is irrelevant to the case that they've made a lot of rulings lately which are at odds with precedents including some of their own.
You replied to a two sentence comment. One of the sentences was about this case and the one that followed (which you quote in your most recent reply) appears to be about this case as well. When you take it out of context, it could be about this case or about the current court in general.
But anyone reading the parent comment and your comment would have no idea that in your mind, you were replying to a general reading of the second sentence.
It's also worth noting that none of Justice Jackson's colleagues (even the other liberal ones) joined her outraged dissent. It was essentially 8-1 against. The current decision proves that she was in fact incorrect.
> not sure what that tells you exactly. Preference for what, monetary policy as opposed to commerce?
SCOTUS does not care about regulatory or labor protections, because the Justices are friends with and receive payments from the billionaire class (Leonard Leo, Charles Koch, Erik Prince) who benefit from weaker protections.
On the other hand, a corrupt Fed could lead to rampant inflation, which would devalue their 401k.
In other words, SCOTUS is motivated by self interest, not rule of law or justice.
When the Court does what people like, they're ruling according to the law. When they do what people don't like, they're judicial activists ruling by preference.
When the Court does what people like, they're a legitimate and vital check on government power. When it does what people don't like, they're unelected politicans in robes.
Notionally, under a law created by Congress. But the Constitution defines the Executive Branch as being under control of the Chief Executive. But again, Congress has been able to cede their rights and privileges under law to other people/groups.
I’m not disputing that Congress can cede power to the Executive Branch. Rulemaking and regulatory agencies like the FTC and FCC are great examples of this.
I will argue that the inconsistency in the Supreme Court’s rulings are creating an environment where some independent agencies will receive special consideration based on their function. This sets up an environment where Congress loses out on the collaborative benefits and safeguards of independent agencies in favor of the courts further empowering the Executive.
The problem with the Supreme Court’s rulings isn’t “inconsistency.” It’s that it completely fucked up the precedent in the 1930s and allowed an unconstitutional fourth branch of government to be created.
“Unconstitutional” is a loaded term that fails to convey any meaningful insight if you consider the Supreme Court only has power because they declared it so.
That said, there isn’t a fourth branch of government and the strict boundaries of branches is a rather… elementary understanding how our government works.
If an independent agency is “unconstitutional” and a fourth branch, how would you define our Armed Forces in practice?
> the Supreme Court only has power because they declared it so.
The Supreme Court has power because the express grant of power in Article III; the idea that they could somehow fulfill their role in adjudicating cases and controversies arising under the Constitution and laws of the United States without both deciding what those writings mean and deciding whether something purporting to be a law of the United States was, in fact, an act authorized by the Constitution when that is precisely the source of the controversy before them is patently absurd.
Right, both the FTC and the Fed (and others) are independent agencies created by congress with leaders selected by the president and approved by the senate.
The argument is all of this violates the constitution. There has not yet been a clear principle articulated by the court for treating them differently.
The Federal Reserve Board of Governors is absolutely part of the federal government, and under statute is the same kind of part of the federal government as the FTC is.
The Federal Reserve System is a bit more complicated than the Board of Governors (but is also effectively part of the federal government, but a sui generis, highly corporatist part of the federal government, with direct involvement in an unusual manner by powerful private entities.)
> THe FTC is part of the Federal Gov't whereas the Federal Reserve is not.
I think you know that blanket statements of this type are at best inaccurate and not helpful to the discussion. The Fed is an entity created by federal statute and staffed by presidential appointees, so it's at least a little misleading to say that it's not part of the federal government.
It's not a matter of if, but when, Trump gets control over the Fed.
We all know he will immediately slam the interest rate lever to 0%. What happens after that is unknown but it won't happen overnight. So now you have a window where the dams break and money starts flowing everywhere but nothing is off the rails yet.
What would you do if you had 60-90 days to take advantage of this?
The correct answer is probably "buy foreign currency".
A sneakier answer is probably "short stuff". That will probably get you creamed.
What everyone is going to do is "get as much of that free money as you can, and worry about the rest later". At the end they'll make a ton of profit but be sad that they didn't predict the market peak, so it will feel like a loss.
If the interest rates slam to 0, we already saw what happens.
Everyone closest to the money printer funnel becomes wildly rich buying appreciating assets on negative real interest rates.
As you get further from the sphere of influence with first shot at the money spigot, the worse off you are. The guy at the very end just gets a diluted jar of nothingness.
The American economy is a $30 trillion freight train. All the decisions being made right now, no matter how small or large, will probably take multiple decades before cumulatively showing their full effect. We can probably all see where things are headed in the long term, but the best move right now is to close your eyes and enjoy the party.
Buy as much property as banks will loan you the money for. You'll borrow the money cheap and then inflation will rocket, meaning the property will gain value while the bank is left holding the bag due to the dwindling value of the money you owe them.
This will only work if mortgage rates actually drop hand in hand with the fed rate, BTW. And that isn't always guaranteed as the primary risk for a lender is inflation, so if high inflation is obvious and predicted as a consequence, mortgage rates will remain high to compensate.
If I knew before, I'd buy long bonds. (Or maybe medium would be better?)
Maybe the larger problem is that I'd expect, after that 60-90 days, the value of the dollar will get destroyed. So you made a ton of money during that 60-90 days. Now where are you going to put it?
Your desire to time the market typhoon caused by the abandonment of decades of US world monetary leadership is confounded by the need to time the market squall due to the current US government shutdown. And quite frankly also to time the impending crash from AI overvaluations in the stock market.
Just buckle up folks. Ain't no one getting out of this clean.
Lots of confusion here about the relevant legal issues. The Fed presents a much trickier question than other administrative agencies. Article II, Section 1 says: “The executive Power shall be vested in a President of the United States of America.” So if a government body exercises the “executive power,” it does so as a delegate of the President.
The FTC, for example, exercises classic “executive power.” It sues people for violating antitrust and consumer protection laws. It doesn’t get more “executive power” than that.
The Fed, by contrast, for the most part doesn’t exercise “executive power.” The Fed influences private conduct indirectly through open market operations as a bank. The Fed has ancillary functions in making and enforcing bank regulations, but arguably those are separable. That makes the independence of the Fed a much trickier question.
At the other extreme would be someone like the CEO of Amtrak. He can’t exercise the power of the state to prosecute you. It’s a train company that functions like any other company and happens to be government owned.
On the other hand, a major responsibility of the FTC commissioners is to develop regulations for interstate commerce, a power that is solely granted to Congress. Allowing the President to disregard the rules Congress specified when delegating that power to the FTC is usurping Congress's regulatory powers and giving them to the President. At best you could argue that the laws that created the FTC commingle congressional and executive power in an untenable manner, and it will need to be restructured. But in the meanwhile, you still have to justify why congress limiting the executive's enforcement power is worse that the executive usurping congress's regulatory power. And more-so why it is necessary to do so in an injunction, when it contradicts long-standing precedent.
No, that cuts the other way. The only reason we allow the FTC to create regulations with the force of law is by pretending that regulations are just an expression of how the executive will exercise its delegated discretion in enforcing the law. That makes rulemaking a quintessential “executive power.”
Your argument amounts to the idea that, because Congress has done one wrong thing (allow the executive branch to make laws) it should be permitted to do a second wrong thing (allow the Article I “executive power” to be exercised independently of the President). That makes no sense. You can’t reward Congress for doing an unconstitutional thing by letting them do a second unconstitutional thing.
How does the fed exist then, if not through executive power? The 10th amendment only allows the federal government to exercise powers expressly granted in the constitution.
Yes, but Article I, Section 8 says: “[The Congress shall have Power . . . ] To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”
McCulloch v. Maryland held that was broad enough to encompass chartering a federal bank: https://www.oyez.org/cases/1789-1850/17us316. Now, you have a point that it’s hard to see what enumerated power is served by creating a national bank. But I think it fairly falls within the enumerated power of providing for “the common defense and general welfare of the United States.” Remember, the huge issue at the time was how to pay for the military and what to do with all the war debt states had taken on. The first national bank was created to deal with that. So the central bank fit into the concept of the “general welfare of the United States” in a much more specific way than is usually imagined. That is to say, it doesn’t require a strained reading of “general welfare of the United States” that would be broad enough to basically gut the concept of enumerated powers. Instead, at the time, the management of the nation’s finances was seen as an existential threat to the new government as a whole.
I think the issue there is article I, unlike article II, expressly states what the legislative branch consists of. And it states it consists of the house and the senate. Nothing else.
So the reading of a bank that excecutes the law establishing it, I don't know how it could fall under anything but article ii. From your explanation, that wouldn't violate McCulloch v. Maryland authorization of the executive to execute the law.
Oh, I see what you’re saying. Article I, II, and III, create “Congress,” the “President,” and the “Supreme Court.” Those are the constitutional organs of the government, and are invested with the legislative, executive, and judicial powers, respectively.
The constitution assumes you can create various offices and departments associated with each of these organs, without spelling it out. But nothing turns on where anything “sits.” The question is whether any entity is exercising the “executive power,” or “legislative power,” or “judicial power.” For example, one of the first things Congress did in 1789 was to create the Marshall’s Service to provide security to courts. These were actually created as a body in the judicial branch. https://en.wikipedia.org/wiki/United_States_Marshals_Service. But they don’t exercise the “judicial power.” They exercise executive power—law enforcement.
So the Fed “sits” in the executive branch. But that doesn’t necessarily mean it exercises the “executive power” within the meaning of Article I, Section 1.
Wikipedia link provided says Marshalls are part of the DoJ, which is the executive branch.
>The constitution assumes you can create various offices and departments associated with each of these organ
Definitely a valid point. But the legislative is unique in that the constitution explicitly defines what can exercise the legislative power, and it's defined as consisting of the house and senate. The executive and judiciary has no such restriction.
At bottom it's kind of a kludge, which the US has unfortunately waited until now to test in the courts.
There are a lot of reasons why letting the executive control the Fed would be massively destabilizing. None of those reasons go to the constitutionality of the matter, so courts have generally chosen to sort of handwave it - and the executive hasn't really forced the issue.
Won't be able to depend on those factors much longer...
> How does the fed exist then, if not through executive power?
First, the Fed is not entirely government, as chartered banks are shareholders.
Second, the Fed is / can be construed under 'power of the purse', which is under the jurisdiction of Congress.
The phrase "power of the purse" does not appear in the constitution.
The idea that the members of the board of the federal reserve are structurally very distinct from appointed members of the NLRB or the FTC is ridiculous. It is just calvinball from the fact that the conservatives like the stability offered by the fed and don't like most of the other independent agencies that do things like empower unions and fine people committing financial fraud.
Article I expressly states the legislative branch "consist of a Senate and House of Representatives." So the fed can't be part of the legislative branch.
Agencies can exist under the bailiwick of Congress, e.g.:
* https://en.wikipedia.org/wiki/Congressional_Budget_Office
Further, having a bank that is not directly controlled by Government dates back to the first Congress (Washington, Hamilton):
> The suspicion of this would most probably be a canker, that would continually corrode the vitals of the credit of the Bank, and would be most likely to prove fatal in those situations, in which the public good would require, that they should be most sound and vigorous. It would indeed be little less, than a miracle, should the credit of the Bank be at the disposal of the Government, if in a long series of time, there was not experienced a calamitous abuse of it. It is true, that it would be the real interest of the Government not to abuse it; its genuine policy to husband and cherish it with the most guarded circumspection as an inestimable treasure. But what Government ever uniformly consulted its true interest, in opposition to the temptations of momentary exigencies? What nation was ever blessed with a constant succession of upright and wise Administrators?
* https://founders.archives.gov/documents/Hamilton/01-07-02-02...
Alright, you have a point here, as rayiner also pointed out.
The legislative powers more accurately are vested in only congress and senate, and not only that are defined as consisting of the house and senate.
Therefore the CBO exists in a rather odd area, where it cannot exercise any power unless it moves into the execute branch, or it somehow uses executive power.
The fed exists through its charter by Congress in the Federal Reserve Act of 1913. Clearly congress gets to define organs of government by law, no one seriously tries to make a 10th amendment case that Congress can't define organs of government.
The argument here is about independence. Can Congress define an organ of government (part of the executive branch as commonly understood) such that the president doesn't have the ability to directly administer it? Or is the president the head of all executive authority?
Similarly no one doubts that the intent of Congress was to do so here. And almost everyone thinks this has been a good thing, as macroeconomic policy can and has done terrible things in the hands of political actors in the past.
But the constitution is silent, thus the case.
Pretty significant decision coming up - whether or not the president has total discretion in determining a for-cause dismissal. If they rule in his favor we'll quickly see the board replaced and the other cases involving removed independent agency heads will be more or less moot.
Is it really an "if"? We all know which way the current Supreme Court will rule, and what the exact breakdown of votes will be.
They went out of their way to tell Trump that the Fed is unique and special. Now we find out if they are willing to limit executive discretion to save the economy.
Unfortunately the recent rulings from the Supreme Court suggest that they will favor unlimited executive power whenever possible, at least when Trump is involved. Stare decisis doesn't apply when you have a 6-3 majority and a 930 page agenda to complete before the inevitable midterm backlash.
Somewhat related in rulings about the President's control of various agencies is the unitary executive, which has gained popularity (like originalism) in right-leaning circles in recent years (thanks Scalia):
* https://archive.is/https://www.vox.com/scotus/397729/supreme...
* https://en.wikipedia.org/wiki/Unitary_executive_theory
Right-leaning folks are all for it:
* https://www.journals.uchicago.edu/doi/full/10.1086/714860
Others less so:
* https://scholarship.law.nd.edu/ndlr/vol98/iss1/3/
Pre-Trump, one famous SCOTUS ruling determined that some agencies were / acted 'in between' branches:
> What the Court held in Humphrey’s Executor is that if an agency is of the latter kind—that is, the agency’s job description involves a mixture of quasi-legislative and quasi-judicial functions that are not within the President’s explicit Article II powers—then it is up to Congress to determine whether this kind of agency’s heads serve at the President’s pleasure. If such an agency’s role is essentially “to carry into effect legislative policies embodied in statute,” then Congress may protect its members against discharge except for good cause.
* https://verfassungsblog.de/the-unbearable-lightness-of-the-u...
* https://en.wikipedia.org/wiki/Humphrey%27s_Executor_v._Unite...
Telling that the Supreme Court will let Trump fire the FTC head (despite precedent against the exact same situation) but not the Fed governor. You can see the court just outright ruling based on the preferences and not law.
The kind of ruling at issue (on what preliminary measures to take to while a case is being adjudicated) are, under the law, based on a wide variety of considerations beyond the merits of the underlying case (though a judegement of likelihood of success on the merits is one of the factors, it is not the only one.)
The concrete impact of the act to be allowed or constrained is, very much, a part of that analysis, so situations which are otherwise legally similar in terms of the underlying issues but where the potential impacts in the interim of adjudication are different can very easily have very different outcomes at this level without judicial favoritism or misconduct.
Which isn't to say that there aren't problems with recent Supreme Court decisions in this area, just than you need more than “cases with similar underlying legal questions have different outcomes on preliminary orders governing what is allowed before the case is resolved” to make that case.
> Which isn't to say that there aren't problems with recent Supreme Court decisions in this area
The problems aren’t with the recent decisions, but the 1930s ones. I don’t think there’s a decision on the books today that was more clearly wrongly decided than Humphrey’s Executor. I mean:
> The commission is to be nonpartisan, and it must, from the very nature of its duties, act with entire impartiality. It is charged with the enforcement of no policy except the policy of the law. Its duties are neither political nor executive, but predominantly quasi-judicial and quasi-legislative.
The concession in italics should have made this a slam dunk case in the other direction. Enforcement of the law is the quintessential executive power. An English peasant in the 1600s could have gotten this one right. And where does the constitution say anything about Congress being able to create “quasi-judicial and quasi-legislative” bodies? The founders spilled all this ink to make three branches of government, but they really meant “j/k mix them all up into one unelected body if you want!”
That may be the case but it’s hard to look at recent rulings by the Supreme Court and direction of things happening within the executive as anything other than “anything for my friends, for everyone else the law”, whether that’s overturning Roe v Wade (and probably Griswald too sooner rather than later) or overturning the meaning of the words “well organized militia” in usurping the legislation’s ability to regulate private firearms.
Having different playbooks for players to follow depending on whether one team is for you or against is an interesting approach but one that’s been tried many times before and not one that will leave this country unified or in a better shape than it was found.
The examples you picked aren’t great to support your point. An alien with a copy of the Constitution and the Federalist Papers would easily discern that the document intends to afford greater protection to the right to bear arms than some right to bodily autonomy. As to these particular cases, even prominent liberals have questioned the soundness of the original decisions.
The Second Amendment says: “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”
There is nothing complicated about the prefatory clause. If the amendment read: “News reporting, being necessary to the public debate of a free State, the right of the people to free speech shall not be infringed,” nobody would say that only professional news reporters have a right to free speech. They would say that “the right of the people to free speech” refers to a preexisting right that belongs to “the people” and the introductory clause provides the rationale for protecting it. The meaning isn’t even confusing when you recall that, at the time, militias were “bring your own firearm.” You don’t even need to open up the Federalist Papers and read Hamilton’s writing on European monarchs disarming their people.
Even Larry Tribe, who hates Trump and conservatives more than anyone in legal academia, came around to this view of the Second Amendment: https://hls.harvard.edu/today/why-i-changed-my-mind.
In contrast, there concededly is no “right of privacy” in the Constitution. Griswold turned to “emanations from penumbras” to find such a right. Nobody left of center would apply similar reasoning to find economic rights in the “emanations from penumbras” of the Contract Clause. This is such a case—Lochner—and folks on both sides agree it’s wrong. Griswold and Roe are just Lochner applied to sexual liberties rather than economic ones.
Even most left of center folks would struggle to write an opinion like Griswold and Roe today. They’re relics of an age when the Supreme Court was like a Yankee WASP version of Iran’s Guardian Council, ensuring compliance of temporal law with higher moral law.
An alien given a copy of the constitution knows that the constitution is not an enumeration of rights that people have, but carve outs specifically where the federal government can supersede the power of the individual and more importantly local governments.
The right to bodily autonomy as such is implicitly protected by the 9th amendment which states the constitution is not a set of positive enumeration of rights granted but instead limits placed on the power of government to take away all rights which are inherently ours.
Whether you find those rights because you want to look for it in the 4th amendment limits on governments right to invade your privacy is largely irrelevant.
I’ll also point out that regardless of the arguments on the 2nd amendment, historically regulation of arms was completely allowed and even today that’s allowed (eg you can’t get a nuclear weapon). And ignoring that is very interesting considering the current SCOTUS’s random “historic tradition” argument from conservatives.
The fig lead that they will use to justify this distinction was hinted at in Seila Law, another case when they allowed the firing of members of independent agencies: they will say that the Federal Reserve has a "long tradition of independence" that distinguishes it from newer agencies, even though they are all operated under the same law.
If that distinction sounds preposterous to you, then congratulations, you reached the same conclusion that Justice Jackson reached when she complained that the conservative majority is playing "Calvinball" to reach results-based decisions regardless of statute, precedent, and the Constitution.
For those who didn't grow up in the 90s, Calvinball is a reference to a fictional sport from the comic strip Calvin and Hobbes, in which the sport's rules are made up and change constantly.
[1] https://en.wiktionary.org/wiki/Calvinball
The FTC is a government agency whereas the Fed is not. Part of the question being adjudicated here is how much control the president has over the Fed, since it's a quasi government body at most, and a 99% independent body at least.
> The FTC is a government agency whereas the Fed is not
Someone should tell the Federal Reserve Board of Governors that they aren’t a government agency:
https://www.federalreserve.gov/aboutthefed/fedexplained/who-...
“The Federal Reserve System includes
· The Board of Governors, a federal agency located in Washington, D.C."
Sure, the board is a board of federally appointed individuals. But the board is a subsection of the federal reserve systems. And even the board is kind of odd in it's structure, because the governors have staggered appointments and serve a term.
The whole federal reserve is also privately funded, and doesn't get money from congress.
From the outside it may appear like a regular federal agency, but it is very different from the FTC, DEA, FDA, DOE, etc.
> Sure, the board is a board of federally appointed individuals.
No, its a federal agency. Explicitly.
> But the board is a subsection of the federal reserve systems.
Yes, the Federal Reserve System is a different thing from the Board with a sui generis relation to the government, which would maybe be relevant if the personnel action involved some part of the system which was not the Board, but we are talking about a personnel action pertaining to the Board.
> And even the board is kind of odd in it's structure, because the governors have staggered appointments and serve a term.
That’s not at all special (particularly when comparing to the FTC), but typical of “independent” federal agencies (including the FTC), which tend to have fixed terms that are longer than a Presidential term (7 years for the FTC, 14 for the Fed Board), staggered terms, and an explicit statutory limits on the number of members of the body that can be from one political party.
And the fed has a $0 federal budget...
The Supreme Court is playing "Calvinball" now, and that's not me saying it but (a member of) the Supreme Court saying it.
https://www.dailycartoonist.com/index.php/2025/08/21/calvinb...
This comment doesn't make sense in the context of a decision that went against the administration.
Justice Jackson said:
> This is Calvinball jurisprudence with a twist. Calvinball has only one rule: There are no fixed rules.6 We seem to have two: that one, and this Administration always wins.
> This comment doesn't make sense in the context of a decision that went against the administration.
I'm really not sure what you're talking about here because the decision didn't go against the administration.
Justice Jackson's comment was part of a dissenting opinion.
Justice Jackson's quip was part of a different dissenting opinion. It doesn't make sense here because the decision regarding Cook, which went against the administration.
It's like claiming a game is rigged when your team won.
I was directly replying to this parent reply:
> You can see the court just outright ruling based on the preferences and not law.
And my reply was:
> The Supreme Court is playing "Calvinball" now, and that's not me saying it but (a member of) the Supreme Court saying it.
Who the Court decided for in the OP linked article is completely irrelevant to my reply.
It was merely reinforcing the idea that the Court appears to many to be making up the rules as they go along to suit their preferences, which is quite analogous to the rules for Calvinball.
My reply was not worded as, nor meant to be, an indication that I disagree with their ruling in the OP article.
How they ruled on any single specific matter is irrelevant to the case that they've made a lot of rulings lately which are at odds with precedents including some of their own.
You replied to a two sentence comment. One of the sentences was about this case and the one that followed (which you quote in your most recent reply) appears to be about this case as well. When you take it out of context, it could be about this case or about the current court in general.
But anyone reading the parent comment and your comment would have no idea that in your mind, you were replying to a general reading of the second sentence.
It's also worth noting that none of Justice Jackson's colleagues (even the other liberal ones) joined her outraged dissent. It was essentially 8-1 against. The current decision proves that she was in fact incorrect.
not sure what that tells you exactly. Preference for what, monetary policy as opposed to commerce?
> not sure what that tells you exactly. Preference for what, monetary policy as opposed to commerce?
SCOTUS does not care about regulatory or labor protections, because the Justices are friends with and receive payments from the billionaire class (Leonard Leo, Charles Koch, Erik Prince) who benefit from weaker protections.
On the other hand, a corrupt Fed could lead to rampant inflation, which would devalue their 401k.
In other words, SCOTUS is motivated by self interest, not rule of law or justice.
When the Court does what people like, they're ruling according to the law. When they do what people don't like, they're judicial activists ruling by preference.
When the Court does what people like, they're a legitimate and vital check on government power. When it does what people don't like, they're unelected politicans in robes.
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The Fed is notionally independent, while the FTC is part of the executive branch.
Yes, it's bullshit either way, but it's not hard to see the court's reasoning here.
Incorrect.
The FTC is not simply under the executive branch, it’s defined to be an independent agency.
The handling of the Federal Reserve and the FTC cases are creating a very interesting situation for how agencies can be defined by Congress.
Notionally, under a law created by Congress. But the Constitution defines the Executive Branch as being under control of the Chief Executive. But again, Congress has been able to cede their rights and privileges under law to other people/groups.
Ends up the USSC will have to decide.
I’m not disputing that Congress can cede power to the Executive Branch. Rulemaking and regulatory agencies like the FTC and FCC are great examples of this.
I will argue that the inconsistency in the Supreme Court’s rulings are creating an environment where some independent agencies will receive special consideration based on their function. This sets up an environment where Congress loses out on the collaborative benefits and safeguards of independent agencies in favor of the courts further empowering the Executive.
The problem with the Supreme Court’s rulings isn’t “inconsistency.” It’s that it completely fucked up the precedent in the 1930s and allowed an unconstitutional fourth branch of government to be created.
“Unconstitutional” is a loaded term that fails to convey any meaningful insight if you consider the Supreme Court only has power because they declared it so.
That said, there isn’t a fourth branch of government and the strict boundaries of branches is a rather… elementary understanding how our government works.
If an independent agency is “unconstitutional” and a fourth branch, how would you define our Armed Forces in practice?
> the Supreme Court only has power because they declared it so.
The Supreme Court has power because the express grant of power in Article III; the idea that they could somehow fulfill their role in adjudicating cases and controversies arising under the Constitution and laws of the United States without both deciding what those writings mean and deciding whether something purporting to be a law of the United States was, in fact, an act authorized by the Constitution when that is precisely the source of the controversy before them is patently absurd.
Right, both the FTC and the Fed (and others) are independent agencies created by congress with leaders selected by the president and approved by the senate.
The argument is all of this violates the constitution. There has not yet been a clear principle articulated by the court for treating them differently.
Not notionally, their independence is codified.
The idea of a unitary executive is obviously being relitigated but there's no question that independent executive agencies have existed for a century.
THe FTC is part of the Federal Gov't whereas the Federal Reserve is not.
The Federal Reserve Board of Governors is absolutely part of the federal government, and under statute is the same kind of part of the federal government as the FTC is.
The Federal Reserve System is a bit more complicated than the Board of Governors (but is also effectively part of the federal government, but a sui generis, highly corporatist part of the federal government, with direct involvement in an unusual manner by powerful private entities.)
> THe FTC is part of the Federal Gov't whereas the Federal Reserve is not.
I think you know that blanket statements of this type are at best inaccurate and not helpful to the discussion. The Fed is an entity created by federal statute and staffed by presidential appointees, so it's at least a little misleading to say that it's not part of the federal government.
What does that have to do with the law?
What does the law have to do with anything here?
The Court will have a bunch of briefs from both sides giving them legal justification for any decision. They will choose which briefs they like.
Well, that's the point of the post at the top of this thread, isn't it?
It's not a matter of if, but when, Trump gets control over the Fed.
We all know he will immediately slam the interest rate lever to 0%. What happens after that is unknown but it won't happen overnight. So now you have a window where the dams break and money starts flowing everywhere but nothing is off the rails yet.
What would you do if you had 60-90 days to take advantage of this?
The correct answer is probably "buy foreign currency".
A sneakier answer is probably "short stuff". That will probably get you creamed.
What everyone is going to do is "get as much of that free money as you can, and worry about the rest later". At the end they'll make a ton of profit but be sad that they didn't predict the market peak, so it will feel like a loss.
If the interest rates slam to 0, we already saw what happens.
Everyone closest to the money printer funnel becomes wildly rich buying appreciating assets on negative real interest rates.
As you get further from the sphere of influence with first shot at the money spigot, the worse off you are. The guy at the very end just gets a diluted jar of nothingness.
The American economy is a $30 trillion freight train. All the decisions being made right now, no matter how small or large, will probably take multiple decades before cumulatively showing their full effect. We can probably all see where things are headed in the long term, but the best move right now is to close your eyes and enjoy the party.
Basically all stocks are gonna go up in short term, because everyone knows money is gonna be invested in projects rather than financial instruments.
Ride the wave, accumulate cash, then exit early and start looking to relocate countries.
Buy as much property as banks will loan you the money for. You'll borrow the money cheap and then inflation will rocket, meaning the property will gain value while the bank is left holding the bag due to the dwindling value of the money you owe them.
This will only work if mortgage rates actually drop hand in hand with the fed rate, BTW. And that isn't always guaranteed as the primary risk for a lender is inflation, so if high inflation is obvious and predicted as a consequence, mortgage rates will remain high to compensate.
Buy stocks.
If I knew before, I'd buy long bonds. (Or maybe medium would be better?)
Maybe the larger problem is that I'd expect, after that 60-90 days, the value of the dollar will get destroyed. So you made a ton of money during that 60-90 days. Now where are you going to put it?
Your desire to time the market typhoon caused by the abandonment of decades of US world monetary leadership is confounded by the need to time the market squall due to the current US government shutdown. And quite frankly also to time the impending crash from AI overvaluations in the stock market.
Just buckle up folks. Ain't no one getting out of this clean.