Will the Supreme Court Crash the Global Economy?
Why might a critical mass of the Supreme Court’s conservative supermajority shrink from letting their ideology propel them to broaden untrammeled presidential firing authority to multiheaded agencies? Two potential reasons spring to mind: the real-world consequences of such an extension and the doctrinal and empirical holes in the undergirding unitary executive theory that scholars have exposed since Justice Antonin Scalia first expounded the current version of that concept in 1988.
Of the two, the calamitous-consequences barrier, while as yet only fleetingly acknowledged by the justices, is no doubt the most daunting. In particular, two words give that prospect intimidating force. Those words are the Fed. As legal scholar Stephen Vladeck recently wrote, “The not-very-well-kept secret is that the justices are (understandably) wary about handing down a ruling that would allow any President, and perhaps this one in particular, to exercise direct control over U.S. monetary policy by controlling who sits on the Federal Reserve Board.” Since the original Framers’ establishment of the first and, especially, the second Bank of the United States, a broad and bipartisan consensus has hardened, in the U.S. as well as every industrialized nation, that an independent central bank with far-reaching powers is essential to maintaining monetary stability and sustaining economic growth.
Conservative legal experts with financial regulatory expertise are well aware of the threat posed by subjecting the Fed to total presidential control. Peter Wallison of the American Enterprise Institute, otherwise a champion of judicially enforced controls on the “administrative state,” nevertheless wrote, on February 28 of this year, “Under no circumstances would it make sense as public policy for the president to have the power to control the Fed.” To date, no one has come up with a principled basis for distinguishing multimember agencies like the NLRB or the Federal Trade Commission, or FTC,—which conservatives would love to rein in—from the Fed, which they, along with the corporate sectors with which they are often allied, fervently believe requires independence. This poses a dilemma, since, as Wallison observed, “If the Court concludes that the president can control a multi-headed independent agency, there will be no Court-approved avenue that clearly makes the Fed immune from presidential control.”