Convictions: Slate's blog on legal issues

Fair-Weather Unitarians

As Jack has recently observed, apart from Katrina, the Iraq War and the conflict with al Qaeda, there has hardly been a government challenge of greater enormity this decade than the economic crisis we are now facing. Yet someone who is neither elected nor politically accountable, Ben Bernanke, is making virtually all of the nation's most momentous monetary decisions . . . and there is little the President can do about it. (The President may not remove members of the Board of the Federal Reserve except "for cause," 12 U.S.C. 242, which has long been understood to reflect congressional intent that the President may not remove such officers merely because of a substantive disagreement with their particular monetary decisions.) What's more, virtually everyone in the Nation now accepts this as the Way Things Ought to Be and, truth be told, is grateful and relieved that the President is not "the Decider" when it comes to the fate of our economy.

And what does the Bush Administration have to say about this profound threat to the "unitary executive"?  After all, even with respect to the much-less-powerful Consumer Product Safety Commission, the Bush OLC (per John Yoo), wrote that a similar for-cause removal condition for CPSC Commissioners "could prove to be unconstitutional."

Well, on Monday, the Administration's Department of Treasury will "propose a far-reaching overhaul of the nation's financial regulatory structure that would reshape the relationship between Wall Street and Washington and redefine the responsibilities of some of the federal government's most powerful agencies." In particular, and most strikingly, the powers of the Federal Reserve would be dramatically expanded: the Fed "would gain the power to investigate any aspect of financial institutions that threatens the stability of the entire system, gathering information and taking action to combat risks to the financial system as a whole." In the words of one Treasury official, the Fed "would act as a 'free safety,' . . . with broad but somewhat undefined powers to roam the entire playing field of Wall Street's activities." 

Needless to say, the Administration has not -- thus far -- added that tis bold new proposal "could prove to be unconstitutional."  The Blueprint for Monday's statutory proposal does not even mention the apparent constitutional anomaly that these important functions would be transferred away from the control of the elected President and other politically accountable officials.

* * * * 

As Jack wrote:

Within the halls of the Bush Administration, nobody seems to be thumping the pulpit, arguing about the framers and demanding the sacred prerogatives of the Unitary Executive. Messrs. Cheney and Addington are nowhere to be heard from defending the President's powers to take responsibility for the money supply and for the financial crisis we are now in. President Bush doesn't want the buck to stop in his office. He likes the dictatorship of the Fed just fine. Of course, if the Fed were charged with interrogating prisoners, it would be a different matter entirely. . . .

Continue reading at Balkinization . . .