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>> Hello
and
welcome
to
another
episode
of
the
OLOTS
podcast.
I'm
Tracy
Aloway
>> and
I'm
Joe
Weisenthal.
>> Joe,
another
day,
another
emergency
episode.
I
mean,
we're
back
to
emergency
episodes,
and
this
is
obviously
one
of
the
big
ones.
>> Yeah.
So,
we
are
recording
this
on
August
26th,
and
we
had
news
overnight
that
President
Donald
Trump
intends
to
fire
Lisa
Cook
from
the
Federal
Reserve
Board.
Obviously,
this
feeds
right
into
the
debate
over
central
bank
independence
and
what
the
president
actually
has
a
right
to
do
when
it
comes
to
hiring
and
firing.
And
uh
the
market
reaction
this
morning,
gold
up
a
bit,
the
dollar
down,
but
what's
really
interesting
is
we
have
yields
at
the
long
end
of
the
Treasury
market
picking
up,
which
would
suggest
there's
more
of
a
risk
premium
being
built
into
that
market.
>> No,
totally.
The
concerns
over
Fed
independence
sort
of
cast
a
whole
shadow
of
the
recent
Jackson
Hole
event.
And
of
course,
okay,
so
we're
recording
this
August
26th.
this
morning
an
episode
with
Adam
Posen
which
was
sort
of
about
this
surreal
experience
there
where
everybody
knew
that
the
threats
to
central
bank
independence
were
the
number
one
story
in
monetary
policy
and
yet
no
one
was
really
talking
about
it.
Maybe
people
are
trying
to
lay
low
trying
to
act
business
as
usual
and
then
we
get
this
and
so
what
was
something
that
maybe
people
hoped
to
imagine
a
way
or
sort
of
not
you
know
look
at
the
other
direction
is
now
right
here.
Well,
we
also
had
Trump
tweeting
that
he
wanted
to
fire
Lisa
Cook
while
Pal
was
giving
his
speech,
which
definitely
underscores
the
tone
of
Jackson
Hole
recently.
Okay,
so
there's
clearly
a
lot
to
talk
about,
including
whether
or
not
Trump
can
actually
do
this
from
a
legal
perspective.
And
I
am
glad
to
say
we
have
the
perfect
guest,
someone
we
have
spoken
to
before
on
this
exact
topic
of
central
bank
independence.
We're
going
to
be
speaking
with
Lev
Manand,
professor
at
Columbia
Law
School
and
also
the
author
of
The
Fed
Unbound.
Lev,
thanks
so
much
for
coming
on
the
show
again.
>> Thanks
for
having
me
back.
>> So,
I'm
going
to
start
with
a
very
simple
question.
Is
there
any
precedent
in
history
for
a
president
firing
someone
from
the
Federal
Reserve
Board
in
this
way?
>> No.
There
have
been
no
firings
of
members
of
the
Fed
board
by
the
president
since
the
Fed
board
was
first
created
by
Congress
in
1913.
And
there
haven't
been
any
attempts
by
presidents
to
remove
any
officers
of
the
United
States
for
cause
in
over
a
century.
And
so
we're
in
unchartered
waters
here
in
a
number
of
different
respects.
We're
going
to
get
into
the
ostensible
reasons
for
the
firing
obviously,
but
as
lawyers,
what
does
for
cause
mean?
So
for
cause,
one
of
the
legal
questions
here
is
what
constitutes
cause
under
the
statute?
And
in
federal
law,
in
independent
agency
law,
usually
Congress
specifies
the
causes.
And
there
are
three
common
ones.
Inefficiency,
neglect
of
duty,
and
malfeasance
in
office.
These
are
the
classic
causes.
The
Federal
Reserve
Act
is
unusual
for
not
specifying
specific
causes
but
saying
simply
for
cause.
So
one
issue
here
is
is
it
just
the
standard
causes
or
do
other
things
count?
And
that's
really
important
because
the
standard
causes
all
have
to
do
with
your
conduct
in
carrying
out
your
job.
Malfeasants
in
office
as
opposed
to
malfeasants
out
of
office.
there
was
an
intent
by
Congress
not
to
include
private
misconduct
as
a
ground
for
presidential
removal
from
office.
And
so
one
question
here
is
whether
private
misconduct
even
counts.
I
think
something
that's
very
clear
we
should
just
say
upfront
allegations
of
private
misconduct
definitely
don't
count.
That
does
not
come
within
the
statute
and
that's
one
of
the
reasons
this
>> why
>> because
of
all
the
due
process
concerns
that
are
associated.
Um,
right.
An
allegation
isn't
sufficient
for
a
removal
for
cause
because
for
cause
requires
a
determination
that
misconduct
took
place.
An
allegation
isn't
sufficient
for
a
determination.<
You
know,
an
allegation
is
totally
sufficient
to
fire
the
secretary
of
the
treasury
because
that
person
serves
at
the
pleasure
of
the
president.
And
the
president
can
say,
I
fired
the
secretary
because
the
secretary
there
are
allegations
that
the
secretary
engage
in
misconduct.
That's
totally
sufficient.
But
Lisa
Cook
is
not
an
official
that
serves
at
the
pleasure
of
the
president.
Lisa
Cook
is
closer
to
being
a
federal
judge,
an
official
who
has
a
tenure
in
office,
a
vested
legal
right
to
serve
in
their
position.
And
to
take
that
away,
the
president
has
to
follow
a
process
and
have
a
ground
and
make
a
conclusion.
And
none
of
that
has
happened
here,
which
is
another
reason
that
this
is
an
illegal
firing.
So
just
before
we
go
any
further,
give
us
a
recap
of
the
accusations
against
Lisa
Cook
because
as
you
point
out,
they
feed
into
the
debate
over
whether
this
could
count
as
malfeasants,
particularly
in
office.
>> Yeah.
Okay.
So
I
will
do
that.
I
just
think
we
should
note
at
the
sort
of
at
the
top
that
there's
a
way
in
which
while
this
is
about
Lisa
Cook,
it's
also
not
about
Lisa
Cook
at
all.
This
is
about
J
Pal.
This
is
about
the
rest
of
the
board.
This
is
about
the
president's
determination
to
subordinate
one
of
the
most
powerful
parts
of
the
government
as
part
of
a
larger
campaign
to
control
as
much
of
the
government
as
possible.
And
the
move
against
Cook
is
a
preview
of
coming
events
for
other
board
members
if
in
fact
the
firing
is
able
to
take
effect.
Okay.
So
what
is
the
specific
case
against
Cook?
It
has
to
do
with
two
mortgages
that
she
took
out
before
she
became
a
governor
of
the
Federal
Reserve.
And
so
it
appears
as
though
the
administration
has
been
digging
around
in
mortgage
records
and
they
found
I
don't
know
whether
they
were
looking
at
Lisa
Cook
in
particular
or
government
officials.
They
found
that
Lisa
Cook
had
two
mortgage
applications,
both
of
which
claimed
that
she
intended
to
make
the
property
that
was
collateral
for
the
loan
her
primary
residence.
And
so
the
allegation
is
that
this
is
mortgage
fraud.
Of
course,
fraud
requires
an
intent.
And
so
on
its
face,
just
the
two
documents
is
not
sufficient
to
convict
somebody
of
a
crime.
nor
can
you
be
sort
of
convicted
of
a
crime,
you
know,
on
the
Twitter
sphere.
The
ordinary
way
in
which
it
would
get
worked
out
whether
there
was
fraud
here
is
there
would
be
a
private
government
investigation
by
prosecutors,
they
could
get
an
indictment,
etc.
None
of
that
has
happened,
right?
This
is
guilty
until
proven
innocent.
And
it
doesn't
seem
to
even
be
the
goal
of
the
administration
to
to
run
a
proper
proceeding
to
determine
whether
this
private
misconduct
took
place.
The
point
is
to
point
to
this
private
misconduct
and
say,
"Now
I
can
fire
you
from
the
Federal
Reserve."
And
that's
where
there's
just
a
big
disconnect
because
allegations
of
private
misconduct,
there's
just
no
precedent
that
supports
a
removal
for
cause
from
a
government
position
on
that
basis.
And
the
president
has
pointed
to
none
and
the
white
house
has
pointed
to
none.
Mostly
what
they're
pointing
to
and
what
this
is
going
to
ultimately
be
a
case
about
is
their
inherent
constitutional
authority
as
president,
which
is
what
the
court
has
allowed
the
president
to
invoke
in
a
number
of
other
instances
to
ignore
statutes,
to
ignore
law,
and
to
trample
on
people's
rights.
And
so
that's
going
to
that's
part
of
why
also
this
is
a
big
case
because
this
is
not
just
a
big
case
for
the
Federal
Reserve.
It's
also
just
a
big
case
for
the
rule
of
law
in
our
system
and
the
extent
to
which
we
are
a
government
of
laws
and
not
of
people.
>> These
are
extremely
important
things
that
we
have
to
get
across.
What
happens
now
in
terms
of
like
the
questions
because
she's
going
to
fight
it.
I
believe
her
lawyers
put
out
a
statement
last
night.
What's
your
understanding
of
how
things
could
play
out
in
terms
of
like
even
her
going
to
her
office
at
the
building
and
being
included
in
meetings
because
these
processes
take
time
if
it's
going
to
go
to
the
Supreme
Court.
Yeah,
this
is
a
very
messy
moment.
And
so
the
initial
clarification
will
come
from
the
courts
because
presumably
Lisa
Cook's
lawyers
will
seek
a
preliminary
injunction
reinstating
her
from
federal
district
court
in
the
same
way
that
Gwyn
Wilcox
at
the
NLRB
did
that
Bedoya
at
the
FTC
did
when
they
were
removed
earlier
this
year.
Right?
So,
we
know
how
that
process
kind
of
works,
but
there's
this
period
of
time
between
when
the
president
tries
to
fire
someone
who
is
statutoily
protected
from
being
fired
by
the
president
and
the
federal
courts
make
a
decision
about
whether
that
person's
going
to
get
to
continue
to
work
in
their
job
while
the
litigation
is
going
on
where
who
knows.
So
right
now
to
your
question,
the
Federal
Reserve
Board
and
Jay
Powell
as
the
active
executive
officer
of
the
board
is
in
a
difficult
position
where
they
have
to
decide
does
she
still
have
her
office
and
they're
under
an
independent
obligation
to
follow
the
law,
right?
They
don't
get
to
just
say
the
president
told
me
so.
They
swore
to
uphold
the
law.
So,
they
have
to
make
their
own
determination
about
whether
she
was
in
fact
fired
by
a
social
media
post,
right?
That
didn't
follow
any
of
the
proper
process.
And
it's
an
invalid
firing
on
its
face.
And
under
existing
law,
it
doesn't
have
any
legal
effect.
Maybe
Supreme
Court's
going
to
change
the
law
like
they've
done
before,
but
I
think
Pal
here
>> has
to
let
her
in
the
building.
And
that's
going
to
create
a
separate
showdown
between
the
board,
its
lawyers,
J.
pal
as
active
executive
officer
of
the
board
and
the
president.
>> That's
interesting.
So
there's
two
parallel
legal
arguments
going
on.
One
at
the
Fed
and
one
in
the
court
system.
Just
going
back
to
the
court
system
for
a
second,
we
have
of
course
had
firings
at
other
agencies
this
year.
And
as
part
of
those,
the
Supreme
Court
basically
carved
out
an
exception
for
the
Fed
saying
that
I
think
it's
uniquely
structured.
And
>> it's
different
because
it's
different.
>> It's
different
because
it's
different.
as
we
said.
So,
>> yeah,
there's
a
carveout.
Would
that
come
into
play
here
or
could
they
just
cancel
the
carveout?
>> So,
the
carveout
isn't
direct
to
this
issue.
>> Okay.
>> So,
there
are
these
other
independent
agencies
just
like
the
Fed,
Federal
Trade
Commission,
SEC,
National
Labor
Relations
Board,
and
they
all
say
that
people
have
tenure
in
office
for
a
term
of
years,
and
the
president
can
only
remove
for
cause.
And
we
were
talking
about
how
usually
those
causes
are
specified.
What
the
president
did
earlier
this
year
is
say,
"I
don't
need
to
follow
that
statute.
I
don't
have
any
cause
to
remove
you.
I'm
just
going
to
remove
you
as
if
you
serve
at
pleasure
because
under
the
Constitution,
I
can
do
that."
And
that
case
went
after
the
Supreme
Court.
And
that's
what
you're
referring
to.
And
that
case
is
called
Will
Cox.
And
in
May,
the
court
said,
"Yeah,
you're
probably
going
to
win
on
that,
president,
because
we're
into
this
theory
of
your
inherent
powers
that's
pretty
much
unmed
from
the
American
legal
tradition,
but
we're
going
to
probably
endorse
it
when
we
get
this
case
on
the
merits
next
year."
And
so,
in
the
meantime,
all
these
people
are
out
of
jobs.
And
then
they
said
out
of
nowhere,
because
the
case
doesn't
involve
the
Federal
Reserve
at
all,
they
say,
"Oh,
by
the
way,
just
in
case
anybody's
like
watching
who's
wondering
like,
can
I
fire
people
at
the
Federal
Reserve?
We
think
the
Federal
Reserve
probably
is
a
different
situation,
but
that's
with
respect
to
whether
the
cause
language
is
binding
on
the
president.
And
so
the
president
read
that
>> this
is
actually
all
downstream
of
the
Will
Cox
order
from
the
court
because
the
White
House
lawyer
said,
"Okay,
now
we're
going
to
go
out
and
try
to
find
causes
that
we
can
sort
of
manufacture,
cook
up,
and
push
the
envelope
on
this
legal
provision."
And
so
the
court
didn't
protect
the
Federal
Reserve
from
this
in
Willox.
It
in
some
sense
invited
the
White
House
to
try
this.
And
so
now
the
ca
this
case
will
go
back
to
the
Supreme
Court
presumably.
And
the
Supreme
Court
will
have
to
say
does
this
for
cause
thing
is
it
for
real
or
is
it
just
a
paper
requirement?
Is
it
just
proforma?
because
the
president
is
treating
it
like
it's
nothing
more
than
putting
out
a
press
release
alongside
the
removal,
which
is
definitely
not
how
Congress
understood
it
when
they
wrote
the
Federal
Reserve
Act
or
how
this
was
litigated
in
the
past
when
this
was
a
bigger
issue
in
American
government.
This
is
really
important
clarification
that
when
Trump
fired
some
of
those
other
people,
they
were
trying
to
establish
the
notion
that
these
sort
of
so-called
like
independent
agencies
were
actually
just
constitutionally
illegitimate.
Right.
There
was
a
specific
point
there.
>> Exactly.
>> And
so
there
was
no
pretext
for
invoking
the
cause
because
that
wasn't
the
goal.
The
goal
was
to
establish
their
illegitimacy,
not
to
necessarily
change
the
partisan
makeup
per
se,
though
maybe
that
was
uh
the
case.
In
the
case
of
the
Fed,
I
mean,
you
say
that
this
firing
was
downstream
from
the
Willox
decision,
but
was
it
I
mean,
the
for
cause
ability
has
never
like
the
idea
that
you
could
fire
for
cause
has
always
been
there,
right?
Like
they
didn't
need
the
carveout
from
Will
Cox
to
fire
someone
for
cause,
even
if
even
if
we
dispute
that
this
actually
rises
to
that
level.
Yeah,
I
think
this
is
a
great
question
and
it's
come
up
a
few
times
in
conversations
that
I've
had.
I
think
the
thing
to
understand
about
the
Will
Cox
order
is
how
radical
it
was
for
the
Supreme
Court
to
say
that
this
bedrock
precedent
on
which
the
US
government
is
designed
is
probably
invalid
and
therefore
the
president
can
fire
all
these
people
don't
don't
get
to
work
while
they
litigate
their
cases.
They're
out
of
their
jobs.
And
so
the
court
in
Willox
embraced
such
a
broad
conception
of
the
presidency
in
such
a
sort
of
unorthodox
unmed
fashion
that
the
main
signal
from
that
isn't
that
the
Fed
is
protected
but
it's
that
this
court
is
going
to
bend
over
backwards
for
very
broad
conception
of
the
president's
power.
And
so
when
you
read
that
as
a
lawyer
for
the
president,
what
you
think
is,
okay,
they
don't
want
to
be
tagged
with
concluding
that
central
bank
independence
is
on
its
face
legally
invalid
in
the
United
States,
but
they
also
are
going
to
let
us
do
what
we
want.
And
so
the
thing
to
do
is
to
now
push
on
this
for
cause
and
act
like
it's
not
actually
a
very
rigorous
bar
and
we'll
get
what
we
want
because
it
was
so
surprising
that
they
got
what
they
want
with
respect
to
the
FTC
and
the
NLRB.
And
so
there's
this
sense
that
people
had
after
Will
Cox,
oh,
the
court
is
protecting
the
Fed.
But
the
real
message
in
Willox
that
overrode
that
sense
of
protection
is
the
court's
going
to
come
up
with
reasons
when
push
comes
to
shove
not
to
pen
in
the
president.
[Music]
Why
do
you
think
the
Trump
administration
wants
to
exert
control
over
the
Federal
Reserve?
Because,
you
know,
we
just
had
a
speech
from
Jerome
Pal
at
Jackson
Hole
where
he
opened
the
door
to
interest
rate
cuts
in
September.
So,
it
would
seem
things
are
sort
of
heading
in
the
direction
that
Trump
wants
even
though
I
will
point
out
there's
a
tension
there
because
he
says
the
economy
is
great,
but
also
he
wants
rate
cuts.
Why
is
this
important
to
him?
So
the
Federal
Reserve
is
the
most
powerful
agency
in
the
federal
government
and
alongside
the
Supreme
Court
and
the
White
House,
those
are
the
three
most
powerful
government
bodies
in
the
United
States
in
2025.
And
the
Fed's
power
has
expanded
dramatically
since
the
2008
financial
crisis.
and
it
has
turned
its
balance
sheet
into
an
active
policy
tool.
And
that
means
that
it
is
a
very
shiny
prize
for
a
president
that
does
not
want
to
have
to
go
to
Congress
for
appropriations
to
carry
out
various
policies.
Here
you
have
an
infinitely
extensible
balance
sheet.
Now,
it's
meant
to
be
used
to
ensure
stable
monetary
expansion
over
time,
but
what
we've
seen
is
it
can
be
put
to
other
uses.
I
think
some
of
those
are
legally
questionable,
but
you
can
imagine
a
president
who
doesn't
believe
in
following
laws,
believes
in
inherent
executive
authority
with
control
over
an
infinitely
extensible
central
bank
balance
sheet,
can
do
all
sorts
of
different
stuff.
So
this
is
a
very
shiny
prize
even
beyond
interest
rate
policy.
I
I
think
I
wouldn't
underemphasize
the
interest
rate
policy
component.
Yes,
Trump
wants
lower
rates
and
there's
a
indication
that
rates
will
be
lowered
at
the
next
meeting,
but
not
by
the
amount
Trump
is
demanding.
>> Trump
wants
to
run
a
boom
economy,
overheated
economy.
And
in
order
to
do
that,
he
wants
to
create
very
easy
credit
conditions
and
loose
monetary
policy
and
monetary
expansion.
And
the
Fed
is
not
going
to
do
that
on
its
own.
He's
going
to
have
to
take
over
the
institution
if
he
wants
them
to
do
that.
The
whole
institution
is
designed
not
to
engage
in
such
a
boom
and
bust
type
of
macroeconomic
management.
And
that's
actively
what
he
wants
and
I
think
what
we
will
get
and
the
markets
are
only
very
slowly
waking
up
to
that.
M
>> yeah
it
it
does
seem
well
I
mean
who
knows
I
mean
you
look
at
some
of
the
the
way
asset
prices
are
flying
maybe
the
market
is
clued
to
>> maybe
the
market
is
clued
in
yes
because
the
way
this
goes
is
we
get
asset
bubble
right
we
get
a
lot
of
leverage
in
the
financial
system
because
we
deregulate
bank
balance
sheets
and
we
lower
short-term
interest
rates
that's
going
to
lead
to
lots
of
credit
expansion
and
that's
going
to
be
an
inflationary
boom
the
reason
why
we
don't
run
the
economy
like
that
normally
is
it
ends
in
tears
Um,
there's
going
to
be
a
bust
later,
but
you
know,
as
I
believe
it
was
Chuck
Prince
once
said,
when
the
music
is
playing,
keep
dancing.
>> Maybe
the
uh
the
bust
will
be
four
years
later,
right?
And
Trump
won't
necessarily
care
if
he's
out
of
the
presidency.
>> It
could
certainly
go
for
years.
You
know,
we've
seen
irrationally
exuberant
markets
led
by
actual
underlying
structural
credit
expansion
fuel
bubbles
for
for
a
long
period
of
time.
By
the
way,
I
think
if
I
were
like
a
banker
or
a
lender
or
a
professional
trader,
I
would
know.
I
would
get
out
right
at
the
top.
I
just
have
that
feeling
that
I
could
do
it.
It's
like,
let's
keep
it
going.
And
>> why
doesn't
everyone
do
that?
>> I
know
it's
a
I
know
it's
a
bubble
or
boom,
but
I
just
have
this
feeling
that
I
would
be
able
to
time
the
top.
>> It's
the
OddLots
podcast.
That's
how
you
know
that's
where
you
get
your
special
insight.
Could
the
question
of
whether
Powell
and
like
again,
you
know,
who
knows
what's
going
to
happen
today?
Uh,
let
Cook
back
into
the
building.
Could
that
be
a
pretext
for
an
attack
on
Paulo
himself?
>> Absolutely.
I
mean,
I
think
that
this
president
or
the
White
House
more
generally
has
floated
any
number
of
possible
sort
of
constructed
cases
to
remove
officials.
And
so
they
obviously
floated
the
renovations,
but
a
failure
to
follow
a
presidential
order.
Everything
the
president
says
is
not
law.
This
is
a
common
misconception.
But
this
president
thinks
it
is
law.
And
so
it
would
be
easy
to
for
the
president
to
say
this
is
law.
>> But
you
know,
I'm
sure
these
are
the
types
of
things
that
people
debate
forever
in
law
school.
And
every
time
I
talk
to
lawyers,
I'm
reminded
it's
like
all
law
is
just
what
people
agree
is
law
at
any
given
moment,
right?
Including
the
most
anything
can
be
re
anything
could
be
reinterpreted.
Anything
can
be
contrived.
Anything
can
be
turned
into
a
loophole.
Like
at
the
end
like
the
only
thing
Butcherson
written
laws
is
some
sort
of
stomach
to
enforce
them,
right?
Yes.
Law
is
a
social
coordinating
mechanism
and
in
order
for
it
to
work,
we
have
to
have
the
shared
understanding
and
follow
it.
And
that's
why
things
like
this
have
such
high
stakes
because
when
a
government
actor
flagrantly
violates
what
the
prior
understanding
is,
it
sort
of
tears
at
the
fabric
of
law
as
a
consensus
building
mechanism.
By
the
way,
11:26
uh
headline
just
flashing
through
the
terminal.
Lawyer
for
Fence
Cook
says
she
will
file
lawsuit
challenging
firing.
So
that's
confirmed.
>> Clearly
still
a
live
issue.
Just
to
recap,
I
just
want
someone
to
lay
out
this
argument
very
clearly
and
you
tend
to
do
that,
Lev.
Uh
you
tend
to
do
it
very
well.
So
>> why
is
central
bank
independence
important?
This
is
a
big
question
that
could
probably
support
an
entire
episode
and
I
think
you
guys
have
we
have
explored
this
at
other
times
and
you've
explored
it
with
some
other
guests.
I
saw
your
episode
with
Corolla
Binder.
Central
bank
independence
is
important
for
the
reasons
that
the
economists
put
forward
which
have
to
do
with
credibility
and
long-term
decisionm
being
best
furthered
by
special
purpose
officials.
Right?
You
don't
want
to
overload
people
with
competing
priorities.
You're
going
to
get
less
quality
policy.
And
so
that's
why
you
have
a
14-year
term
of
office
here
because
we
want
Fed
officials
making
long-term
decisions.
We
don't
want
short-term
decisions
about
changes
in
the
money
supply.
And
so
all
of
that's
true.
There's
a
time
inconsistency
problem.
This
is
a
long-term
policym
domain.
But
I
actually
think
right
now
it's
important
to
emphasize
something
that's
not
actually
a
big
part
or
really
any
part
of
the
economics
literature
and
that
has
to
do
with
the
separation
of
powers
and
democracy.
And
you
don't
want
to
concentrate
too
much
power
in
a
government
in
any
one
person.
And
that's
actually
a
foundational
idea
in
the
American
constitutional
system.
Arguably
the
founders
went
too
far
in
separating
powers.
They
made
it
very
difficult
for
the
government
to
do
stuff.
And
what's
happened
here
is
we've
concentrated
power
in
the
president
in
a
way
that
would
have
all
of
the
framers
of
the
constitution
rolling
in
their
graves
and
to
allow
the
executive
to
control
the
money
supply.
That's
literally
an
issue
that
led
to
the
glorious
revolution
in
1688.
It's
one
of
the
key
concerns
of
the
founders
is
to
separate
control
of
the
money
supply
from
the
executive.
And
so
central
bank
independence
is
also
about
good
government
and
preventing
tyranny.
And
Alexander
Hamilton
said
this
in
his
report
on
a
national
bank.
And
so
it's
not
just
about
having
optimal
long-term
monetary
policy.
It's
also
about
preventing
one
person
from
controlling
way
too
much.
You
know,
for
the
maybe
the
last
15
years
or
maybe
from
2010
through
20
through
co
there
was
like
a
left
critique
of
central
bank
independence
but
it
was
very
you
know
it
seemed
to
be
very
focused
on
this
idea
that
the
central
bank
by
having
this
like
you
know
a
was
just
not
democratically
accountable
that
it
was
accountable
to
the
interests
of
money
holders
to
not
lose
the
value
of
their
money
that
that
was
constraining
the
rebound
of
labor
etc.
Are
those
critiques
suddenly
vanishing
because
it
feels
more
important
to
make
the
argument
that
you're
making?
>> So,
I
always
felt
those
critiques
were
part
right
and
part
wrong.
>> Okay.
>> And
the
part
that
was
right
is
that
the
central
bank
in
the
United
States
was
structured
in
a
way
that
made
it
too
responsive
to
financial
interests
and
not
responsive
enough
to
the
Congress
and
to
the
American
people's
interest.
and
that
led
to
an
excessively
tight
monetary
policy
over
an
extended
period
of
time.
But
the
solution
to
that
is
not
to
have
a
Federal
Reserve
under
the
control
of
the
White
House.
That
is
not
a
solution
to
an
insufficiently
democratic
monetary
policy.
The
solution
is
to
change
the
structure
of
the
Federal
Reserve
system
and
who
influences
those
officials.
And
that
means
increasing
the
influence
of
Congress.
It
might
mean
increasing
opportunities
for
judicial
review.
There's
almost
no
judicial
review
of
the
Fed.
It
might
mean
removing
the
bankers
from
the
boards
of
the
regional
Federal
Reserve
banks.
It
might
mean
changing
the
Fed's
responsibilities
and
the
statutory
scheme
that
it's
executing.
There
are
all
sorts
of
ways
to
create
an
administrative
agency
that
is
more
responsive
to
democratic
interests
besides
putting
it
under
the
president.
and
actually
putting
an
agency
under
the
president.
We
have
actually
a
bunch
of
experience
with
what
that
looks
like
and
that
makes
most
policy
as
a
general
matter
more
favorable
to
wealthy
business
interests.
And
so
there's
definitely
a
valid
critique
that
central
bank
independence
as
we
knew
it
as
central
banks
were
constructed
led
to
a
bias
in
central
bank
policy
towards
certain
interests.
But
the
solution
to
that
problem
isn't
let's
bring
in
the
president
that
will
make
the
central
bank
policy
more
appealing
and
appropriate.
>> Levand,
thank
you
so
much
for
coming
back
on
OddLotss
for
yet
another
central
bank
independence
episode.
Appreciate
it.
>> Thank
you
for
having
me.
[Music]
Joe,
always
good
to
get
Levan.
I
feel
like
he
explains
the
issue
very,
very
clearly.
I
guess
we'll
see
what
happens
both
in
the
court
system
and
also
within
the
Fed
itself
because
I
thought
it
was
really
interesting
this
idea
of
like
two
parallel
legal
tracks
here
where
the
Fed
is
obligated
to
also
follow
the
law
and
so
they
need
to
figure
out
for
themselves
whether
or
not
the
firing
is
legal.
>> Absolutely.
I
mean
this
is
very
serious
like
sort
of
high
stakes
immediate
stuff
that
there
are
questions
that
are
not
easily
resolved
by
the
time
they
uh
get
to
the
Supreme
Court.
I
also
just
found
>> his
argument
very
like
persuasive
that
like
an
allegation
is
not
cause
right
like
setting
aside
like
you
know
what
constitutes
cause
and
maybe
that
is
ambiguous
in
this
particular
case
etc.
All
we
have
is
an
allegation,
>> right?
There's
supposed
to
be
due
process
to
figure
out
whether
or
not
the
allegation
is
in
fact
true.
Also,
an
allegation
that
didn't
actually
happen
while
Lisa
Cook
was
in
office,
which
also
plays
into
that
malfeasance
argument.
>> I'm
guessing
we'll
have
plenty
more
to
talk
about
on
this
topic
in
the
future.
So,
uh,
shall
we
leave
it
there
for
now?
>> Let's
leave
it
there.
>> This
has
been
another
episode
of
the
Odd
Thoughts
podcast.
I'm
Tracy
Aloway.
You
can
follow
me
at
Tracy
Aloway
>> and
I'm
Joe
Weisenth.
You
can
follow
me
at
the
stalwart.
Follow
our
guest
Lev
Manand.
He's
Lev
Manand.
Follow
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Rodriguez
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For
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OddLots
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And
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Discord,
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>> And
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If
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[Music]
Hey.
[Music]