this Lisa Cook matter is going to end in
the Supreme Court, but there was
something called Trump versus Wilcox
that we thought gave us a pretty good
idea of where the court would land on
this. What do you think?
>> Um, the court is clearly very
uncomfortable with a politicized Fed.
Uh, the court's presidents say that
Congress can insulate specialized
economic agencies from presidential
firings. Um the Supreme Court in the
Willcox case made pretty clear that they
don't agree with that precedent, but
they also indicated that the Fed was
different and the court now is going to
have to decide whether they meant it and
they are going to prevent the president
from taking full control of the Fed or
whether they're going to go all the way
down the road with a unified executive.
>> Who will define cause in this case? that
was argued uh for the better part of two
hours. The president says there is
cause. Peter Navaro sat in this chair
the other night saying that she had 5
days to respond. We didn't hear from her
and the documents speak for themselves.
>> Well, I don't think due process by truth
social is quite what the founders had in
mind when they wrote the constitution.
Uh if they think she did something
wrong, the standard approach is to bring
charges against her. Yes. make specific
charges, say what the documents uh you
think in in them is inappropriate, and
let her respond to that. Uh that that
she's not engaging in a social media
battle, I think, speaks well of her and
her trying to stay out of politics.
>> So, what the president is actually
asking for is the ability to fire
without cause.
>> That's what he's asking for. And he has
that according to the Supreme Court with
most other agencies. But the evidence
that politicized central banks hurt
count's economies around the world is
pretty compelling and I don't think the
Supreme Court wants to take
responsibility for that.
>> Let's look at a slightly bigger picture
here because it's more than the Fed
we're talking about. Of course, David,
on the early edition of Balance of Power
today, I spoke with Natasha Serin,
president and co-founder of the Yale
Budget Lab and had some things to say
about the bigger risks surrounding this
focus, specifically on Governor Lisa
Cook. Listen.
It's such a bigger issue than anything
about Lisa Cook or anything about
mortgages in that you're in a situation
where one of the fundamental
institutions and sort of causes of
American economic strength is the fact
that we have an independent central
bank. What you're seeing here play out
is really a sort of potentially quite
damaging conversation around whether
that type of institution should actually
be free from political influence.
>> Cook's lawsuit, David, characterizes
this move as unprecedented and illegal.
The first one is true. Apparently, a
president has never fired a Federal
Reserve governor. What about the second?
>> Uh, I think it is illegal. The Supreme
Court has made pretty clear the
president doesn't have this power with
respect to the Federal Reserve. Their
precedents say that and I don't think
that this is going to be allowed.
>> So this goes to the Supreme Court. Is
that
>> conventional wisdom? Absolutely.
>> Something that you accept.
>> Uh absolutely. Uh the administration
would not accept an answer from any
lower court. And I think the
administration here is hoping that the
Supreme Court will back down. They've
warned the administration not to fire
Fed governors. The administration is
ignoring them and they're hoping the
Supreme Court will buckle.
>> When you look at the big picture here,
add the CDC, add BLS, uh the
Transportation Board, what is President
Trump doing to government and these
independent agencies as he tries to
reshape Washington in his image?
>> Well, he doesn't believe in independent
agencies. He believes that all power and
all responsibility should go to the
president. He and Vice President Vance
are the only ones that were elected and
he wants complete control. That's not
the way we've done things in this
country for a very long time, but he
thinks we need to make a change.
>> Got it. Many, thanks for being with us
today as we figure this out. It's going
to take some time. Uh, and I'll I'll ask
you lastly what you think for timeline
because this is a Supreme Court that
could be motivated to move pretty
quickly here.
>> I think the Supreme Court's going to
move very quickly on this because of the
danger of economic uncertainty. or
months.