The Institutions Are Failing

I expected Trump to test secure institutional boundaries. They are much less secure than I thought, because Everyone Is Stupid

I. Trump And The Fed, Part Forty Seven

On the day that I’m sitting down to write this (who knows how long it will take to finish…), Trump announced that he was firing Lisa Cook. Lisa Cook, for those of you somehow learning about this from me, sat on the board of the federal reserve. She was picked by Joe Biden in January of 2022. In 2021, she used a mortgage to buy a house in Ann Arbor, and as part of the mortgage pledged to make it her primary residence for at least a year. Two weeks later, she made the same pledge on another mortgage for an Atlanta condo. Per CNN:

In mortgage documents filed in 2021 and reviewed by CNN, Cook pledged to live in her Ann Arbor home as her primary residence for at least one year, unless her lender agreed otherwise or unforeseen circumstances arose.

Just two weeks later, she made the same pledge in mortgage documents for her Atlanta condo, according to records reviewed by CNN.

Now, Cook may have just made a mistake (legally speaking). Wrong information on a mortage application is not, by itself, a felony - the government has to prove affirmatively that the discrepancy was intentional and not a mistake.

It’s worth noting that Trump has been mounting a pressure campaign on the fed to lower rates for the past few months now. He has floated the possibility of firing and replacing fed chair Jerome Powell, but backed off when markets reacted poorly to that news. The pressure campaign seems to have worked. Powell indicated at the conference in Jackson Hole this weekend that Trump would, indeed, get his rate cut, despite rising inflation concerns surrounding the Trump tariffs.

Trump was seemingly not content with his victory. I don’t really know what is motivating the administraiton here - maybe Trump is upset that the Fed didn’t listen to him the first time, at last month’s meeting? Maybe Trump has bought into conservative legal theories that state the constitution doesn’t allow “independent government agencies”, which includes the Fed. Maybe he’s just mad at finding resistance and is punishing it, as he does. Who knows.

II. Institutions Under Threat

To hear the liberals tell it, one of the reasons to elect Biden was because Trump posed a serious and legitimate threat to the institutional stability of America. On the Fed, at least, evidence from Trump’s first term was mixed.

On side liberals: in 2019, Trump briefly floated the possibility of demoting Powell for raising rates too much. He also “expressed frustration”(?) at the idea of an independent fed. That news cycle came after several rounds of lower grade attacks, like saying that Powell had “gone crazy” (although when he said that in 2018 he acknowledged Fed independence). More recently, in 2024, Trump expressed doubts about the legality of Fed independence.

On side conservatives: the first time that Trump briefly floated firing Powell, the White House looked into it and concluded that firing the fed chair was legally impossible. Any noises to the contrary were just that - noises, designed to appeal to populism, and not even particuarly unusual noises. The list of presidents who have complained about Fed policy include:

• Herbert Hoover

• Harry Truman

• JFK

• LBJ

• Ronald Reagan

• George HW Bush

Which is, like, 40% of all presidents between Coolidge and Obama. Trump publicly expressing annoyance at Fed policy is pretty squarely within the bounds of normality. It would actually be totally reasonable to dismiss liberal complaints as Trump Derangement Syndrome, and an attempt to parlay extremely normal presidential behavior into their novel “Saving Democracy” talking point. In case it is not obvious by now which side I was on… it’s side conservatives. Prior to today, almost all coverage of Trump And The Fed has been an exercise in formerly-reliable news sources demonstrating how unreliable they had become.

Nevertheless, Biden prevailed. As someone who won on a campaign platform involving the value of institutions, one might expect the Biden Administration to… I dunno, take institutional integrity seriously? Nominate the most competent, squeaky clean people who would agree to work on a government salary? The only way to fire anyone on the Federal Reserve board is “for cause”. Characteristically for American government law, this phrase is about as unclear as “high crimes and misdemeanors”. (Seriously! Why are all of these so vague!) But generally, it would be really hard to fire a Fed board member unless they did something substantially illegal.

Since the Biden Administration was (in theory) concerned by the potential for institutional damage, they must have picked the most squeaky-clean, doesn’t-do-anything-substantially-illegal person they could find. Or, failing that, at least pick board members who are very highly regarded and who would lend credibility to an allegedly-threatened institution. Wait, what’s this I’m hearing?

President Joe Biden’s latest nominations to the Federal Reserve Board mark a major victory for lawmakers and other diversity advocates who have long pushed for new voices at the world’s most powerful central bank.

Biden on Friday tapped two Black economists — Lisa Cook and Philip Jefferson — for open seats on the board. He also named Sarah Bloom Raskin, an aggressive regulator and former Fed governor, for the top job overseeing the nation’s banks, which would make her the first woman to hold that post.

Biden’s move, which came after a lobbying campaign by lawmakers such as Senate Banking Chair Sherrod Brown (D-Ohio), House Financial Services Chair Maxine Waters (D-Calif.) and other members of the Congressional Black Caucus,

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III. Everything Is Like This Now

For whatever reason, I’m reminded of the Georgia prosecution case against Trump. For those not up to speed, the Trump campaign in 2020 did things like “pressure the state house to appoint an alternate suite of pro-Trump electors to the electoral college even though Trump lost Georgia” and “tell the state secretary of state to find 11,780 votes, which would have reversed the election by one vote”. These things are generally not legal, but immediately following the election, the state of Georgia chose to not really do anything about it.

This changed only two years later, in August of 2023, when Fulton County DA Fani Willis chose to charge Trump and 18 other people with various election-related crimes. By this point, however, Trump was already the front-running Republican presidential candidate, and a prosecution against him seemed much less like “enforcing the law” and much more like “trying to put the legitimate political opposition in jail”. And then, the DA admitted to having sex with lead prosecutor Nathan Wade. Both were ultimately removed from the case, which got delayed to a point where an indictment would have landed in late 2024, ie, one or two months before the election.

Unsurprisingly they put the case off further. The case is now more delayed than either high-speed railroad in California, and more recent developments probably means it won’t happen at all. And I am just… extremely jaded by the whole story. What do you mean “We consider Trump to be a threat to democracy and we think he’s a serious criminal, but we’re going to wait to charge him until 2.5 years later, when it makes us look like Putin trying to shut down our primary electoral opposition”? Is it really so difficult to not fuck the fucking person you hired to run one of the most important cases in the past 100 fucking years of our democracy???

[I will choose to not tie this to how autocorrect doesn’t work anymore, and our phone system is full of spam calls, and how nobody cares about anything anymore. These are slightly separate issues. But I will leave this paragraph in, because I am admittedly writing this while Intoxicated.]

Instead, I want to take this moment of Rage to talk about how we have lost the ability to have functions of the government which strive for internal excellence.

IV. The Purpose Of The System Should Be What We Say It Is

Consider a government iniative. Let’s say that it is intended to, uh, reduce American reliance on Chinese semiconductors. Let’s imagine that we have a grant program which is intended to finance factories which build semiconductors in the United States. We would expect that program to, uh, I don’t know, target semiconductor output? I would be really surprised if that program

• contained requirements for factories to use renewable energy

• contained requirements for providing free childcare to workers

• contained requirements for employing women in the construction industry(?)

Uh okay if you read this blog you probably already know about that one. What about something a little more basic, like “law enforcement”. You might expect their primary purpose to be something like “enforcing the law”. If you asked them what they might want to improve upon, you’d hope they’d say something like “enforce the law more often” or “solve more crimes” or something. Instead:

Visibly missing: "enforcing the law"

This is about as much of a good-faith representation as I can give. Chicago is a city with a serious crime problem, and this page is under “Explore CPD → Areas of Improvement”. It’s in the top bar of the website. This is where you’d go if you wanted to find out what the police department wanted to change about itself. (there were two more tiles that didn’t fit into the screenshot, neither of them were “solve more crimes”.)

This is starting to rub off on Americans. Large swathes of the population are beginning to notice that most institutions of the US government serve their titular goals only secondarily. Instead, their primary goals rely entirely on the prevailing goals of the party in power. Every government agency under the Democrats seems to be primarly working to, like, employ more women and black people and further the adoption of ecosocialism (unless that conflicts with the women and black people mandate). Every government agency under Republicans seems to be primarly working to further the whims of Donald Trump or otherwise cost $0 at the expense of actually accomplishing their stated goals so that Republicans can do more tax cuts.

Both halves of the population are mostly correct in their perception of what the other side uses government agencies for. Eventually, however, the original, intended purpose of each government agency will just wither away, and we’ll have a totally dysfuncitonal society which exists only to impose our explicit desires onto our enemies. When Democrats are in charge, the Fed will exist to embody the diversity of the country, and when Republicans are in charge, the Fed will exist only to set rates to 0% so we can spend increasingly fake money on an economy that exists in conveniently timed press releases. The problem, of course, is that nobody will actually set the monetary policy. Nobody will care about building the trains, nobody will enforcing the laws, nobody will care about reducing American reliance on China.

We’re going to own the [Libs/Cons] and you’re going to like it! Welcome to Brazil, everyone.

V. Is There Anything We Can Do

Not really. Once the animating logic of one party is “use everything to kill the other side”, the other party has to adopt the same motto just to defend themselves and keep up. Since both parties will perpetually percieve the other to be ahead on this front, this is the end state of our political system. In theory, one party could choose via primary to unilaterally disengage (possibly, after Trump is no longer around), and induce the other to also disengage out of exhaustion.

In practice, that doesn’t seem to be likely. The current frontrunner for the Democratic 2028 Presidential Nomination (who, I will remind you, will not be running against Trump) is tweeting like this:

If you want my take on which side is more attached to actual policy as opposed to Culture War Goals, I genuinely don’t know anymore. Trump is at the same time doing more no-strings-attached, good-on-merits policy and more culture war nonsense than Democrats are. The Trump Administration has kicked over decadeslong stupid policies, like ALARA, parts of environmental review, and the air speed limit, without really attaching substitute concessions to any of them. At the same time, Trump inspired this rant. So who even knows anymore

VI. Everything Will Still Probably Be Fine

Okay. </rant>. That was fun. This is probably not as bad as people are saying it is. (Like every other story about the Trump Administration. Lmfao.) The dollar fell on this news, but then rebounded almost immediately.

As we previously established, Trump already has his rate cut. He can, indeed, fire people from the Fed board for cause. There will be two court cases, one about ability to fire people and one about whether Lisa Cook actually committed mortgage fraud. If she did, then the “cause” that she was fired for is legitimate. If she didn’t, the supreme court will likely resinstate her as a Fed boardmember. Even though I just had a rant about them, the institutions still mostly work (for now). We can all take a deep breath. Everything is priced in.

At some point, we do need to reckon with the fact that having lots of laws, poorly enforced is a recipe for the exact disaster we’re looking at. If a law doesn’t get enforced 99% of the time, it probably shouldn’t stay on the books for the 1% of the time it’s used against a political target. It doesn’t even make sense to offer someone a preferential rate on their first mortage versus their nth… just run the credit score? It’s disquieting that there are probably thousands of laws like this, any one of which could be reactivated at any time, to further destroy trust in our institutions. But for the moment, Everything Will Be Fine. Just take a deep breath.