Lisa Cook's Unjust, Illegal Firing

Let's not beat around the bush. This is just the latest move to consolidate power and break our democracy.

I have little to add to reams of digital ink being spilled re Trump unjust and illegal firing of Federal Reserve governor Lisa Cook. Not a lawyer, of course, but much commentary supports the view that this is an illegal firing, in that, as far as we know, the president does not have cause for her dismissal, which is the statutory requirement in this case.

But let’s not beat around the bush here. The is a banana-republic-style power grab to dominate the central bank, which the president views as disobeying his orders for lower interest rates. Good for Cook for fighting back, and some commentary suggests she may have the upper legislative hand, though the current SCOTUS majority cannot be trusted to enforce the rule of law. FTR, I do not say that lightly. But I fear it is true.

Cook’s firing is just the latest evidence that we are serious trouble. At this point, it is not clear that the center will hold, by which I mean the nation will ultimately continue to operate as a democracy under the rule of law, which in many areas, including the Cook firing, BLS commish firing, ICE actions, militarization on city streets, is no longer currently the case.

It is not, for example, a fevered fantasy to believe that Trump is trying to get the public used to seeing armed soldiers on the street, from which it is a not-long-enough leap to military intimidation at voting places, which also fits neatly into his antipathy for mail-in ballots.

Trump’s “tell” here is that the forces he’s deploying, whether it’s combing the gov’t’s mortgage database for alleged mortgage fraud or sending troops into cities, are only targeting liberal people and places. In fact, Texas AG Ken Paxton has claimed three mortgages as “primary,” but you don’t see Trump going after him.

One more point: especially given the fragility of the rule of law right now, I understand a view that says, “wait up—let’s see whether Cook did get this wrong on her mortgages.” But I disagree. If she did so, she should of course have to follow the law and face whatever consequences are required.

But everyone needs to know that’s not what this about. It’s a power grab that is antithetical to democracy in general and to an independent central bank in particular. If you’re stuck in wait-and-see mode, you’re suffering from a lack of urgency that’s fatal to democracy and the project of ending the Trumpian nightmare.

That’s what we shouldn’t do, but, once again, we’re left with the question: what is the most effective resistance? I’m a nerdy, number-crunching empirical economist, not a political organizer, so others may have better answers than mine. But as long as the courts still exist, there’s every reason to fight it out on their turf. Protecting elections is obviously primary. And mass protesting of these injustices in the streets strikes me as important as ever.

But let’s also not forget another, simple bottom line. Armed troops on the street have a negative impact on commerce and general comfort, fake statistics, a compromised Fed, tariffs, deportations, unending chaos and the economic uncertainty it generates—all of these will hurt the living standards of average Americans, and not by a little but by enough to really feel it.

The MAGAs won’t care, but the non-MAGA part of the electorate that put Trump where he is today did not vote for higher prices, higher interest rates, higher unemployment. Yes, the stock market continues to climb, but for these voters, what matters are paychecks, not portfolios.

In other words, an all-of-the-above-and-more strategy means fighting the threats to democracy, the rule-of-law, and harmful economic policy whenever and wherever we see them.

Now, I’ve got to prepare to go on TV and make this case to whomever is listening!