Lev Menand and Nathan Tankus on Why Fed Independence Is Now Hanging by a Thread

**Nathan Tankus** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Tracy Alloway** (0:18)
Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

**Joe Weisenthal** (0:22)
And I'm Joe Weisenthal.

**Tracy Alloway** (0:23)
Joe, let me ask you a personal question.

**Joe Weisenthal** (0:27)
Go on.

**Tracy Alloway** (0:27)
Is Alexander Hamilton always right?

**Joe Weisenthal** (0:31)
I doubt it.
I have not read the complete works of Alexander Hamilton. My main knowledge of Hamilton-

**Tracy Alloway** (0:40)
Is it the musical?

**Joe Weisenthal** (0:41)
No, I was gonna say my main knowledge of Alexander Hamilton is Christian Parenti's book, Radical Hamilton. But I've also watched the musical. And let me state at the outset my most controversial opinion. So when that musical came out, it was a lot of people really liked it. And then a few years later, everyone's like, oh, this is lib and cringe.
It's a good musical. And it's time for people set aside everything else. It's time for people to accept that in the category of musical theater, which I get is not to everyone's tastes.
And I have some strong opinions on how much of it is bad. It is an upper decile or upper, what's the five one, quintile musical.

**Tracy Alloway** (1:22)
Hamilton being a great musical is going to be the most controversial in this entire episode.

**Joe Weisenthal** (1:27)
OK, that's right.

**Tracy Alloway** (1:28)
But the reason I bring it up is because a couple of things have happened recently with the US government. So we had a Supreme Court decision that basically like turbo charged the president's ability to fire heads of agencies, right? And then we had another Supreme Court decision that basically carved out an exception for the Fed.

**Joe Weisenthal** (1:51)
Right.

**Tracy Alloway** (1:52)
While, this is where Hamilton comes in, while citing the history and tradition of the independence of the Central Bank, Hamiltonian theory and all of that.

**Joe Weisenthal** (2:02)
Right. Like I think a lot of people even before this decision, and we did some discussions about this, have this view, it's like, the Fed is different because the Fed is different, right? That it's like, yes, legally or sort of like on a formal written status, like why should it be different than the FCC or the FTC, etc. It looks the same. But a lot of people have this intuition that the Fed is different because it's different. But when you're like making laws, right, you sort of have to write something down in theory to establish that. And one of the things that was stated in the essentially decision so that Trump couldn't easily remove Lisa Cook, which is really all it said.
There was, they sort of wrote down the thing that makes the Fed different. And one of the things they say is like, it has a tradition going back to Alexander Hamilton. Right. The Hamilton exception.

**Tracy Alloway** (2:55)
Right. And I mean, on the one hand, I think you're right that a lot of people would argue that the Fed is different because the Fed does monetary policy and ostensibly you want an independent central bank, but on the other hand, the Fed does a lot of regulatory things that look a little bit more like an agency. So anyway, we're going to get into all the details of the case and what makes the Fed special, I guess, and why the president can now fire people at the FTC or the SEC, but not at the central bank. We have the perfect guess. We're going to be speaking with Lev Menand. He is, of course, a Columbia Law Professor who's been on a number of times before. He also just wrote a paper called The Federal Reserve Exception to the Slaughter Rule.

**Joe Weisenthal** (3:40)
There we go.

**Tracy Alloway** (3:40)
Yep. And we're also going to be speaking with Nathan Tankus. He is the president of Notes on the Crises and has been writing a lot about the Fed and also government agencies more broadly.

**Joe Weisenthal** (3:51)
And also a repeat guest.

**Tracy Alloway** (3:54)
Also a repeat guest.

**Joe Weisenthal** (3:55)
Friend of the pod.

**Tracy Alloway** (3:56)
All right. So thank you very much for coming back on Odd Lots.

**Nathan Tankus** (3:59)
Thank you for having me. And I want to make it very clear at the jump that I am in no way associated with Joe's opinions about the Hamilton musical. It's horrible history. And by association, I'm not going to subscribe to the musical itself is good. Absent the content, you just chuck it all out.

**Tracy Alloway** (4:19)
Lev, do you want to disclose your Hamilton musical opinions up front?