Supreme Court lets Fed Governor Cook keep job pending oral argument in January
cnbc.com35 points by kaycebasques an hour ago
35 points by kaycebasques an hour ago
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.
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.
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.
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.
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!”
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 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...
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.
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.
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.
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 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.