The Fed’s Independence from President Obama Is Much Exaggerated

Fed Governor Lael Brainard declared yesterday that the Federal Reserve “is designed to ensure that independence from the executive branch is absolutely the focus of the deliberations of the Federal Open Market Committee.” It is clear that her comments were a response to Donald Trump’s criticisms that the Federal Reserve was keeping interest rates artificially low to help the election of the President’s preferred candidate—Hillary Clinton.

One does not have to endorse Trump’s claims fully to believe that the degree of independence touted by Brainard is a serious overstatement. As Peter Conti-Brown has shown, the practical independence of the Fed falls far short of its design.

The seven members of the Federal Reserve Board of Governors are nominated by the President and confirmed by the U.S. Senate.  It is true that the full term of a governor is fourteen years and appointments are staggered so that one term expires in each even-numbered year The lengthy terms and staggered appointments are indeed intended to contribute to the insulation of the Board—and the Federal Reserve System as a whole—from day to day political pressures.

But governors almost never serve anything close to their fourteen year terms. The outside options are simply so lucrative that almost everyone resigns after terms far short of that. As a result, today every Governor of the Federal Reserve was appointed by President Obama. Brainard herself is Obama’s former Undersecretary of the Treasury, not to mention a candidate for Secretary of that department in the Clinton administration.  Would we think a Supreme Court was independent of the President if all its members were appointed by him?

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The Decline of Constitutional Morality: A Conversation with Bruce Frohnen

const moralityIs America in a constitutional crisis or is the country already post-constitutional and merely adjusting to a regime of quasi-law? Bruce Frohnen joins this edition of Liberty Law Talk to discuss this question and his latest book, coauthored with the late George Carey, Constitutional Morality and the Rise of Quasi-Law.

Taking on Leviathan


Thomas Hobbes (1588-1679), the great philosopher of the authoritarian state, in a famous metaphor portrayed the government as a dominating giant or Leviathan, animated by absolute sovereignty, and passing out rewards and punishments as it saw fit. It alone could control the unruly passions of the people and create stability and safety.

Today’s “administrative state”—or government bureaucracy, acting simultaneously as sovereign legislator, executive, and judge—brings Hobbes’ image of the giant vividly to mind.

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The Socratic Classroom for an Activist Age

statue of Socrates in the Academy of Athens,Greece

Socrates roamed the streets of Athens offending. The youth of Athens, who were intoxicated by his bristling brilliance, and drawn to the spectacles he created as he unmasked his fellow Athenians’ claims to knowledge, trailed behind to watch and later imitate him.

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The Harvard Law Review and Three Laws of Preference

harvard law rev

The Harvard Law Review has announced that it has the most diverse intake of editors in its history when diversity is measured by race, ethnicity, and gender. In fact, according to an article in the Crimson, the demographics of the intake resemble the demographics of the Harvard Law School class. This development would indeed be a cause for celebration if it were not the result of preferences rather than merit selection.
Racial preferences began during my time at Harvard Law School and their first implementation occurred when I was an editor. My memory is that they were focused on African Americans and quite limited in number. Indeed, my impression was that they were used only when candidates were close to the cutoff in the writing competition. I say “my impression,” because like the very few other conservatives on the review I had no position of authority there.

But since then the number of “discretionary positions” to be potentially filled by preference has expanded first to ten positions and in 2013 when gender was added to race and ethnicity as a category to twelve positions or more than 25 percent of the intake. Moreover, last year in keeping with the student stirs on the HLS campus, activists complained about the review’s demographic makeup, no doubt putting pressure on it to make use of all the slots, regardless of performance.

This history at the Harvard Law Review illustrates three “laws” of preference.

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The Beguiling Myth of “Mass Incarceration”


It is not surprising that those at opposite poles of the ideological spectrum generally view public policy issues—and proposed solutions—differently. What is surprising is when conservatives adopt the rhetoric of the Left (along with the accompanying narratives, memes, and canards) regarding a subject as important as criminal justice.

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The Nature of Machismo


Styles make fights, boxing analysts say. So it’s not surprising that more than three decades later, Roberto Durán’s first two fights against Sugar Ray Leonard, in 1980, still make for such compelling viewing. These fighters were opposites in so many ways. Durán was known for a style that stressed skilled infighting and hard, relentless punching. He scored 69 victories, 55 by knockout, in his first 70 fights. He was famous as the fearsome man with las manos de piedra—“hands of stone.”

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The Flight of Fancy Election

Fantasy Airship

According to Livy’s History, the Roman consul Publius Decius Mus sacrificed himself to the gods by “leap[ing] upon his horse and dash[ing] into the middle of the enemy” in a ritual that secured victory for his embattled army. One hopes the polemicist using Decius as a pseudonym in a much discussed broadside against Never Trumpers, having anonymously expressed an opinion with which somewhere north of 40 percent of Americans agree, is safe. The republic almost certainly will be.

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The Obama Administration Is Helping Raise Your Airfares

Last week American Airlines took two extraordinary actions that confirm that the airline industry has become an entrenched oligopoly.  First, American Airlines began a bizarre new advertising campaign. Its message: be a good flyer by showing consideration to your seatmates and maintain equanimity in the air. This advertisement makes little sense in a competitive industry. It does not tout low prices or any distinctive amenities of American that might help it gain market share.   An industry that implicitly coordinates on price and amenities, however, might benefit from the such an advertisement, if it got more people to fly generally.

Second, American Airlines gave a $13 million severance payment to its President even though he was joining a rival, United Airlines.  And the severance was not a matter of legal obligation but at its discretion. It is wholly against usual business practices to give gifts to a high level executive who goes to work for a rival. The more frequent reaction is to sue the official for endangering trade secrets. But again this course of action makes sense if American, United and other airlines are engaging in the implicit coordination made possible by oligopoly.  The President of American would then still working for a common cause. Why not maintain goodwill in those circumstances?

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Burke and Burkinis


Albert Camus adored swimming in the Mediterranean Sea. It would be fascinating to know how this great philosopher, who was acutely aware of France’s complicated relationship with the Arab world, would have reacted to the burkini ban on the French Riviera.

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