Editor’s note: Carlo Versano will return next week. This week’s newsletter is authored by Isaac Saul. Saul is the author and founder of the non-partisan, independent newsletter Tangle, which summarizes the best arguments from the right and left on the big political news of the day. To check out his newsletter, click here.
Good morning,
In a letter posted to Truth Social on Monday night, President Donald Trump ordered the removal of Federal Reserve Governor Lisa Cook from her position for alleged mortgage fraud. Citing the Federal Reserve Act of 1913 and his powers under Article II of the Constitution, Trump stated that he was removing Cook “for cause.”
Cook responded by saying that “no such cause exists” and that the president did not have the authority to fire her. Last week, Trump requested Cook’s resignation due to her alleged fraud; Cook declined, and said she will sue Trump in response to his attempt to fire her.
Let me lead with a straightforward question:
If Lisa Cook provided false information on one or more mortgage applications, is that enough cause to fire her?
So many people are spending so much time debating other things here: Is Trump trying to pressure the Fed to lower interest rates by firing Cook? And if so, would that even work? What happens to the future of the U.S. economy if markets don’t believe the Fed is independent? What happens if Cook digs in and this becomes a true standoff (as seems likely)? Why is Trump suddenly using mortgage fraud as a go-to accusation to attack all his enemies? Is Cook even guilty?
These are all good and interesting and important questions. The most important point to me, though, is that even if Cook is guilty of the thing Trump says she is, I don’t know if that’s enough reason for the president to fire her, logically or legally. The Supreme Court has been pretty clear that Trump can’t remove Cook without cause, and whether lying on a mortgage form would qualify as “cause” is legitimately unclear.
Cook has not been convicted of, or even charged with, any crime — and until that happens, the hypothetical I raised above is moot. Trump can’t fire her on the suspicion of wrongdoing, and the courts need to take up Cook’s lawsuit quickly and make that point crystal clear.
All of this should elicit two major concerns from the voting population (none of which, by the way, have anything to do with Cook being black — which is what some Democrats can’t help but focus on).
First, the independence of the Federal Reserve now hangs in the balance. You’ve probably heard that the Fed Board is one of the last remaining politically independent institutions, and that is, for the most part, true. The Federal Open Market Committee’s system is key: Its 12 seats are filled by five of the 12 regional bank presidents and seven appointed governors who serve on staggered terms. They cannot be removed for their policymaking decisions, which protects their autonomy and insulates them from politics.
If the independence of the Fed is lost, we’re in big trouble. Global markets rely on the Fed being insulated from political pressure, and our market entrusts the Fed with containing inflation; if the Fed’s independence is lost, the way its decisions are interpreted changes, and the individual decisions that comprise our market change as well. We got a hint of this already, when the yield on the 30-year Treasury bond went up after Trump moved to fire Cook — a signal the market was worried the Fed might soon falter in its responsibility.
Second, but most importantly, this move shows just how far Trump is willing to go to get what he wants. The sum total of his actions this term now include arresting and deporting noncitizens for speech, deploying or threatening to deploy active-duty military in major U.S. cities to quell crime, promising to arrest and prosecute some of his top political foes, threatening lawsuits against the free press, forcing universities and law firms to settle lawsuits to retain federal funding, massively escalating the gerrymandering race that will further reduce our ability to pick our own representatives, and (perhaps most worryingly) threatening to take greater federal control over elections. Last week, when Trump announced he will move to end mail-in voting, he described states’ constitutionally mandated electoral control this way: “Remember, the States are merely an ‘agent’ for the Federal Government in counting and tabulating the votes. They must do what the Federal Government, as represented by the President of the United States, tells them.”
None of that is a statement in favor of liberal politics (in fact, decrying federal power is a classic conservative principle) — nor is it an endorsement of the Democratic Party. You can think Democrats are a corrupt party who tried relentlessly to imprison and destroy Trump with every dirty political trick in the book and still criticize Trump’s actions as president. You can believe Trump is the greatest president we’ve ever had — a once-in-a-generation norm-breaking, peace-broking negotiator who serves as the voice of the common man and just pulled us back from the brink of our own destruction by simply winning in 2024 — and still believe he is drunk on power and going too far. You can believe he has the right stance on literally all of our biggest issues, and desperately want to see him succeed on his policy prescriptions, and still wonder what world he is building for the next president — the one who doesn’t see the world how he does — and consider how dangerous this all might be.
Love or loathe him, the public should feel compelled to draw lines in the sand on what we’ll tolerate from our increasingly powerful presidents — and we should be able to see and state clearly that Trump is crossing those lines.
FEMA Staff Being Put on Leave After Criticizing Trump Sparks Fury
Reports that the Trump administration placed some employees of the Federal Emergency Management Agency on leave after they signed an open letter of dissent earlier this week has sparked criticism on social media.
More than 180 current and former FEMA employees signed the letter sent to the FEMA Review Council and Congress on Monday, critiquing recent cuts to agency staff and programs and warning that FEMA’s capacity to respond to a major disaster was dangerously diminished. Only 36 signed their names, while others withheld their names for fear of retribution. Read more.
Also happening:
Russia-Ukraine: President Donald Trump was asked if Russian President Vladimir Putin is “back on the clock” as it seems increasingly unlikely that Putin and Ukrainian President Volodymyr Zelensky will hold a summit to discuss ending the Russia-Ukraine war. “It’s very, very serious what I have in mind, if I have to do it. But I want to see it end,” Trump said in part. Read more.
Iowa: A Democratic candidate flipped an open Iowa state Senate seat in a critical special election on Tuesday. Democrat Catelin Drey beat Republican Christopher Prosch in the race to represent Iowa’s 1st Senate District and replace the late Republican state Senator Rocky De Witt. Read more.
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