White House Explored Legality of Demoting Fed Chairman Powell

[Zorro]

Source: Bloomberg News

The White House explored the legality of demoting Federal Reserve Chairman Jerome Powell in February, soon after President Donald Trump talked about firing him, according to people familiar with the matter.

The White House counsel’s office weighed the legal implications of stripping Powell of his chairmanship and leaving him as a Fed governor, the people said, in what would be an unprecedented move. A replacement would have to be nominated by Trump and confirmed by the Senate.

Trump’s team conducted the legal analysis and came to a conclusion that has remained closely held within the White House, the people said, requesting anonymity to discuss internal deliberations. It isn’t clear whether Trump directed the legal review, and the people didn’t describe the outcome.

A White House official who declined to be identified said he wouldn’t comment on what he called alleged discussions from months ago. Trump’s top economic adviser, Larry Kudlow, said demoting Powell isn’t currently under consideration.

Read more: https://www.bloomberg.com/news/articles/2019-06-18/white-house-explored-legality-of-demoting-fed-chairman-powell

[hlthe2b]

1. He can't do it without "REAL" cause

The Federal Reserve Act provides explicit protection for all Fed governors against removal by the president except “for cause.” Courts have interpreted the phrase to require proof of some form of legal misconduct or neglect of basic duties. A disagreement over monetary policy wouldn’t meet that bar.

[RockRaven]

2. What is being explored is removing the chairmanship while leaving him as a governor...

Trumpists would likely try to argue that since he is not being removed as a Fed governor no violation of the Federal Reserve Act is taking place -- they will try to split apart being a governor and being chair (i.e. claim being chairman isn't a type of governor, but an additional position layered on top of being a governor) and claim the protections for governors apply only to governorship status and not chairman status. I don't know how explicitly the act addresses/protects the assignment of chairmanship or if it just addresses governorship.

And for Trump to try this and fail would require a) Powell to contest the action in court and continue that contestation all throughout the inevitable appeals process (which would be both lengthy and costly) AND b) 5/9 of SCOTUS to behave responsibly -- let's be honest, that is not guaranteed. "For cause" may have a certain definition to most honest people, but legally it is whatever the hell 5/9 of SCOTUS claims it to be at any given moment.

[hlthe2b]

3. While that plays out, the economy craters, Wall Street goes nuts and even his cowardly RW

Congressional enablers will increase the behind-the-scenes tenor of their "great concerns"...

[Jarqui]

4. They need to find someone they've got Kompromat on

so they can go to war with Iran - to try to save the economy and Trump ...

[mathematic]

5. Leaked to intimidate Powell

This is already an intervention into the independence of the Fed, not just the possibility of one.

[Evolve Dammit]

9. Agree. He's been aggressively pressuring for a year or so. Total capitulation is the goal

[Yo_Mama_Been_Loggin]

6. Trump seems bound and determined to get hyperinflation going again

[riversedge]

7. Powell was your pick Trump. stop whinning for once.

[maxsolomon]

8. Never. He's incapable.

Powell dared to show loyalty to his position, not to Trump.

Revenge is in order.

January 2021 is a long long way off. January 2025 is even further.

[FakeNoose]

10. He did the same thing to Jeff Sessions for over a year

Why would anyone want to work for Chump - ever?