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Lev Menand and Nathan Tankus on Why Fed Independence Is Now Hanging by a Thread
Brief
The episode focused on the constitutional and practical fallout from recent Supreme Court decisions that broadly expanded presidential removal power while carving out an exception for the Federal Reserve. Hosts Tracy Alloway and Joe Weisenthal opened by noting two linked developments: a court trend enabling at‑will removal of executive officers and a separate line of reasoning that purportedly protects the Fed because of “history and tradition.” Lev Menand (Columbia law) and Nathan Tankus (Notes on the Crises) were brought on to unpack the doctrinal shift, its historical underpinnings, and its material consequences for central‑bank independence.
Menand walked through the doctrinal genealogy — Myers (1926) as the high‑water mark of presidential removal authority, Humphrey’s Executor (1935) as the decision that allowed Congress to insulate multi‑member quasi‑judicial agencies, and the Court’s recent reliance on the history‑and‑tradition test (borrowing methodology from United States v. Rahimi) to fashion an unusual Fed exception. He argued that the Court misapplied founding history: Hamilton’s First Bank was a private, investor‑owned institution and not a model of government removal immunity. Tankus supplied operational detail: the Board of Governors lacks a standalone balance sheet and is financed through assessments on the regional Federal Reserve Banks, a structure that has long produced practical budgetary independence from appropriations. Both guests agreed the Court’s carve‑out is precarious — the Cook decision was 5–4, but only Chief Justice Roberts and Justice Kavanaugh appear to defend the Fed‑specific rationale; several justices voted to preserve Cook’s incumbency while dissenting from the broader doctrinal change. They warned that the ruling undermines administrative‑state norms, leaves most independent agencies vulnerable to presidential control, and creates real risks that monetary tools could be repurposed as fiscal tools absent clearer legal constraints, imperiling Congress’s purse power and traditional judicial remedies such as mandamus.
Why it matters
Supreme Court recent decisions created a new general rule that the President can remove most executive officers, but carved out the Federal Reserve — the Cook opinion was a 5–4 vote to protect Fed governors from at‑will removal (hosts and guests discussed this outcome during the episode).
Key details
- Lev Menand (Columbia law professor) traced the legal lineage: Myers (1926) expanded presidential removal power, Humphrey’s Executor (1935) limited it for multi‑member quasi‑judicial agencies, and the Court’s newest approach relies on a “history and tradition” test drawn from United States v. Rahimi (as explained by Menand).
- Nathan Tankus highlighted a technical source of Fed independence: the Board of Governors is funded by assessments on the regional Federal Reserve Banks (not the Congressional appropriations process), which gives the Board de facto budgetary autonomy and operational insulation from the President.
- Menand argued the Court misreads history: Alexander Hamilton’s First Bank (cited as historical support) was a private, investor‑owned bank, not a government regulatory board, so Hamilton’s writings don’t provide a clear founding‑era precedent for removal immunity of government officials.
- Both guests warned the carve‑out is fragile: Menand noted only Justices Roberts and Kavanaugh appear to genuinely support the Fed‑specific exception (the 5–4 vote had only two justices endorsing the rationale), meaning the equilibrium is unstable if the Court’s membership changes.
- Panelists raised practical risks: giving a unitary executive control over removal powers could let presidents turn monetary instruments into fiscal tools (e.g., non‑recourse lending or directed credit), threatening Congress’s power of the purse and the rule‑of‑law remedies (Marbury/mandamus) that historically constrained executives.