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The Fed Is Down

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Re: The Fed Is Down

#71

Post by dragonwriter »

dragontamer wrote: post #41
jerry1979 wrote: post #40

Earlier quoted context omitted.

Correct me if I'm wrong, but people constructed a cleavage between the Fed and the US Govt because they thought we shouldn't trust democracy with money creation.

The proper role of the US Government and Money has been under debate ever since Hamilton was appointed Treasury Secretary under George Washington. (EDIT: actually, even earlier than that, but the country didn't exist yet...) Jefferson wanted one system, Hamilton wanted another. And the two sides have been arguing for the past 200+ years. Sometimes, the central bank appears, sometimes it disappears. Then silver+gold,…

> The proper role of the US Government and Money has been under debate ever since Hamilton was appointed Treasury Secretary under George Washington. (EDIT: actually, even earlier than that, but the country didn't exist yet...)

In regard to the parenthetical, the country existed either from the First Continental Congress, the Declaration of Independence, the Articles of Confederation, or the surrender at Yorktown, but in any case before the adoption of the Constitution, much less Hamilton's appointment under it as the first Secretary of the Treasury, which is a really odd point to chose as the starting point of the nation.

Re: The Fed Is Down

#72

Post by dragonwriter »

Meekro wrote: post #54
jerry1979 wrote: post #40

Earlier quoted context omitted.

Correct me if I'm wrong, but people constructed a cleavage between the Fed and the US Govt because they thought we shouldn't trust democracy with money creation.

You're right-- the Fed Board of Governors members are appointed by the President for 14-year terms, which is supposed to make them more independent. I'd say that what you're describing isn't limited to just fears about money creation, though. It's part of the broader notion in most Western democracies that permanent (or semi-permanent) bureaucrats are more trustworthy than elected officials. It's not just the Fed: Pr…

> This notion has both practical problems-- who can fire an "independent" bureaucrat run amok?

The President; “independent” officers and agencies (to the extent that this is a formal distinction, “independence” is often attributed on a softer political basis to regular executive agencies and officers, too) are those who (or, for agencies, whose group of principals are) legally protected against Presidential removal except for specified cause.

And also Congress, as such officers are civil officers subject to impeachment.

> For example, the Consumer Financial Protection Bureau has a director who is appointed by the President for a 5 year term, and can only be fired for a narrow list of reasons. The Supreme Court struck down that restriction and said, roughly, that any inquiry into why the President is firing a particular bureaucrat would infringe on the Executive power that is vested in the President alone.

No, it didn't. It struck down the combination of that protection and a single-director government structure, declaring that because Congress had established a single-responsible-officer structure, it could not also (even though the CFPB exercised quasi-legislative and quasi-judicial functions, do which the Court had allowed similar arrangements for multidirector agencies) restrict dismissal of the director to limited cause.

It very much did not find that any legal restriction on why the President is firing a particular bureaucrat “would infringe on the Executive power that is vested in the President alone” (and, in fact, a wide array of bureaucrats in the federal executive enjoy exactly the kind of protection that was not permitted to the head of the CFPB because of the structure of the agency.)

And it even moreso did not find that any inquiry into such a firing (such as the Congress might do before applying after-the-fact, discretionary consequences like impeachment and removal) would violate the Executive Power.

Re: The Fed Is Down

#73

Post by Meekro »

dragonwriter wrote: post #72
Meekro wrote: post #54

Earlier quoted context omitted.

You're right-- the Fed Board of Governors members are appointed by the President for 14-year terms, which is supposed to make them more independent. I'd say that what you're describing isn't limited to just fears about money creation, though. It's part of the broader notion in most Western democracies that permanent (or semi-permanent) bureaucrats are more trustworthy than elected officials. It's not just the Fed: Pr…

> This notion has both practical problems-- who can fire an "independent" bureaucrat run amok? The President; “independent” officers and agencies (to the extent that this is a formal distinction, “independence” is often attributed on a softer political basis to regular executive agencies and officers, too) are those who (or, for agencies, whose group of principals are) legally protected against Presidential removal e…

Thank you for your reply-- you got me to reread Seila Law v. CFPB and I now agree with you. The fact that the CFPB had a single officer was clearly important to the outcome of the case.

I agree with the outcome of that case, but don't think it goes far enough. Scalia's dissent in Morrison v Olson seems like the best understanding of the Constitution's requirement that "the executive Power shall be vested in a President" and that "he shall take Care that the Laws be faithfully executed." To Scalia, the President cannot be deprived of control anywhere a "purely executive power" is exercised.

Re: The Fed Is Down

#75

Post by kemofo »

granzymes wrote: post #38
kemofo wrote: post #33

The irony of name "Federal Reserve" is that there is nothing Federal about it. The Fed is a completely autonomous private organization which controls the United States money supply.

A completely autonomous organization that... 1) was created by Congress 2) is accountable to Congress 3) has governors that are paid by Congress 4) has governors appointed by the President

1. true 2. not true - you have this backwards 3. true 4. sort of true - the fed allows the exec a candidate list

Re: The Fed Is Down

#76

Post by kemofo »

umeshunni wrote: post #37
kemofo wrote: post #33

The irony of name "Federal Reserve" is that there is nothing Federal about it. The Fed is a completely autonomous private organization which controls the United States money supply.

That's an adorable meme that crypto-bros like to tweet, but really they are actually an agency of the federal government and answerable to Congress. From https://www.federalreserve.gov/faqs/about_14986.htm Who owns the Federal Reserve? The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors in…

I don't tweet, bruh, and this is an adorable copy/paste of meaningless wiki headlines.

Re: The Fed Is Down

#77

Post by kemofo »

fl0wenol wrote: post #47
kemofo wrote: post #33

The irony of name "Federal Reserve" is that there is nothing Federal about it. The Fed is a completely autonomous private organization which controls the United States money supply.

Look, kid, so it's not a cabinet level department in the executive branch or anything. It's little PCAOB, and a little Post Office. Point being it's not autonomous nor private.

Listen, son, it's the largest cartel on the planet. It's balance sheet expands and contracts arbitrarily b/c it's has a magic checkbook that can create money from nothing. They buy real assets of real companies to backstop prices that should be set my market forces and we're not allowed to know about it till long after the fact. Boy, I'd say that if most regular people knew how entrenched the fed was in their daily business they would want to know more than "It's a little PCAOB", which is a lie.

Re: The Fed Is Down

#78

Post by kemofo »

Meekro wrote: post #57
natchy wrote: post #53

Earlier quoted context omitted.

Yes created by an act of Congress but is not under the jurisdiction of congress or the president, apart from appointments.

The Fed is completely under the US government's control. Congress created it by passing a law, and could pass another law to restructure it if they ever wanted to. The President fills the Board of Governors who run it with his chosen nominees, and can remove and replace them at will. How much more "jurisdiction" do you want?

The government has passed laws against insider trading, speeding, and murder, and I wouldn't say these things are "completely under the US government's control". The fed does what it wants, congress is powerless to stop it, even though there are pieces of paper with laws written on them.

Re: The Fed Is Down

#79

Post by granzymes »

kemofo wrote: post #75
granzymes wrote: post #38

Earlier quoted context omitted.

A completely autonomous organization that... 1) was created by Congress 2) is accountable to Congress 3) has governors that are paid by Congress 4) has governors appointed by the President

1. true 2. not true - you have this backwards 3. true 4. sort of true - the fed allows the exec a candidate list

I consider Congressional hearings to be a form of accountability.
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