Workers hang a large photo of U.S. President Donald Trump on the facade of the Department of Labor headquarters in Washington, D.C., on Wednesday.DREW ANGERER/AFP/Getty Images
This week, U.S. President Donald Trump announced that he was firing one of the seven governors of the Federal Reserve, the U.S. central bank. Lisa Cook, the governor in question, has refused to leave and has sued, arguing that the President’s action is not only unprecedented, but illegal.
It’s the latest chapter in Mr. Trump’s attempt to change the leadership of the Fed because the independent body isn’t giving the President what he wants, which is lower interest rates. A lot of news coverage has focused on the dangers of handing control of monetary policy to the White House, and that concern is well-founded. It’s like putting the sugar industry in charge of diabetes control. It won’t end well.
Yet the loss of Fed autonomy, economically damaging as it would be, is the least of the reasons to be terrified by what Mr. Trump is up to. The attack on the Fed, and the manner by which the legal system is being weaponized in service of the President, is the latest move to transform the American government, and to take it to a dark and dangerous place.
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Mr. Trump pushes the boundaries of propriety, legality and constitutionality daily, and his pace is accelerating. With so much water coming over the dam, it’s hard for the average person to keep track. The attempt to fire Ms. Cook, along with the constant jawboning about firing Fed chair Jerome Powell, is disturbing on multiple levels, each more serious than the last.
People who support Mr. Trump see nothing but regular politics: The President wants a particular policy; officials at an independent agency are refusing to give it to him; he’s trying to replace them with people more amenable to his views. Ho-hum.
This is mostly wrong, though not entirely. The Fed has a complex structure to insulate it from political interference, but the President appoints its chair and its governors – Mr. Powell is a first-term Trump appointee – and has some power to remove them.
Many central banks are independent, yet ultimately responsible to an elected government. For example, the governor of the Bank of Canada is independent, but only up to a point. In the event of disagreement over monetary policy, the minister of finance has the legal power to issue a written instruction to the central bank – lower interest rates, raise interest rates, whatever – and the bank must comply. If Governor Tiff Macklem declined, the government would have the ability to remove him.
These exceptional powers, contained in the Bank of Canada Act, go unused.
The system relies on politicians – and voters – valuing independent expertise and respecting institutional precedents and norms. If a government is determined to drive a bulldozer through that, all bets are off.
The American economy will pay the price if independent technocrats are booted from the Fed and Mr. Trump’s mercurial whims become monetary policy. Bad as that is – and it’s very bad – it is the least of our worries.
The Trump administration has spent this year gutting autonomous government agencies and firing non-partisan professionals. In the latest incident, the director of the Centers for Disease Control and Prevention – the world’s premier public health agency – was fired by Robert F. Kennedy Jr., the Secretary of Health and Human Services, who also happens to be the world’s most prominent anti-vaxxer. Lawyers for Susan Monarez said she “refused to rubber-stamp unscientific, reckless directives and fire dedicated health experts.”
It’s a dispute between a scientist and a crank on the subject of vaccine science. And as has happened repeatedly in Mr. Trump’s Washington, the crank is going to win.
That’s very bad – and not the worst of it.
Back at the Fed, the President isn’t just trying to terminate Ms. Cook. His team has whipped up a criminal case against her. Bill Pulte, scion of a wealthy home-building family and the Trump-appointed director of the Federal Housing Finance Agency, sent a criminal referral to the Justice Department, alleging that she committed mortgage fraud. He’s also issued criminal referrals for California Sen. Adam Schiff and New York Attorney-General Letitia James. Ms. James successfully prosecuted Mr. Trump.
The Trump administration is turning independent law enforcement bodies into enablers of the President’s will, extensions of his power and vehicles for his vengeance. The FBI and the Justice Department now exist to impose upon his enemies, while his pardon power shields allies. This goes far beyond, and is far worse, than bad monetary policy or harmful vaccine policy. It is the beginning of the transformation of the United States into something unrecognizable.