DECEMBER 11, 2025

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Meyerson on TAP

Will the Court rule for Trump or for Wall Street?

As the Supreme Court now considers whether Trump can take over the Federal Reserve, we lose either way.

Earlier this week, the Supreme Court began to grapple with what may be its most difficult challenge in its current session: To whom does it owe its ultimate submission and greatest obeisance: Donald Trump, or Wall Street?

Last Monday, the Court held oral arguments in a case concerning Trump’s firing of a member of the Federal Trade Commission for no reason other than his desire to install his own person in her place. For the Court to rule in Trump’s favor, it would have to overturn the 90-year-old Court decision in Humphrey’s Executor, which held that Congress had established regulatory commissions with fixed terms for commissioners that didn’t coincide with presidential terms, so that their rulings would be insulated from direct political pressures and thus better serve, in a disinterested way, the public’s interests. In its 1935 decision, the Court ruled that President Franklin Roosevelt couldn’t fire a commission member without establishing that member’s misconduct, and that has remained the law until now.

In its preliminary rulings on commission members fired by Trump since he began his second term, however, the Court upheld those firings and hinted that when a full-blown case came before it, as it did on Monday, it would strike down Humphrey’s Executor. That would comport with the Republican justices’ pattern of generally vesting more power in the presidency and specifically letting Trump run amok, as it did in its ruling last year holding that a president could not be held accountable for any actions he (or she) took in an official capacity, save by congressional impeachment. That went against the words inscribed on the Court itself—“Equal Justice Under Law”—but the Court’s push for a unitary executive, which under Trump has come close to meaning autocratic rule, clearly mattered more than that “equal justice” nonsense, and certainly more than all those federal laws, dating back to the late 19th century, establishing commissions to protect small businesses, workers, consumers, and people who breathe air and drink water.

However, in the course of Monday’s session, Justice Brett Kavanaugh raised an issue that doubtless troubled his fellow Republicans: If they struck down Humphrey’s Executor, how could they preserve the one institution that works in the interest of America’s banks, Wall Street, and generally, the rich: the Federal Reserve? But for the brief interlude when liberals, under the leadership of Chief Justice Earl Warren, dominated the Court, that body has always been the defender of big business interests. In that sense, the most paradigmatic decisions the Court has ever rendered were those in which it extended the rights that citizens had won under the 14th Amendment to the corporations and cartels that arose after the Civil War, while denying those rights to the very Black Americans that the 14th Amendment was written to protect.

It’s the Fed that holds ready cash on tap for big banks if they get in trouble, that can regulate those banks or block regulations on them, and that banks, corporations, bondholders, and the rich count on to deter inflation (which can devalue their holdings), chiefly by raising interest rates and unemployment rates. No governmental body has done more to block full employment, thereby squelching the interests of working-class Americans while enhancing the income and wealth of the wealthy. There have been times when even Republican presidents, anxious about the public’s view of their economic stewardship, have wanted the Fed to lower interest rates—Nixon is on that list, and Trump most surely is as well—but a staunch independent Fed, free from presidential tinkering thanks to Humphrey’s Executor, can defend the rich even from them.

On Monday, Kavanaugh asked the attorney from Trump’s Justice Department, who was arguing in favor of striking Humphrey’s down, to find a way that the Court could strike down regulatory commissions but leave the Fed intact. The best that attorney—Solicitor General D. John Sauer—could do was answer that firing the Fed’s board members would “raise their own set of unique distinct issues.” What those issues might be, other than unique and distinct, he declined to say.

Let it not be said that in this moment of judicial uncertainty I was reluctant to help out. So let me suggest some ways in which the Fed and its governors are unique and distinct from other regulatory boards and their commissioners. The Federal Trade Commission protects small businesses and consumers from oligopolistic pricing and other abuses of big businesses. The Securities and Exchange Commission protects investors and the public from scams and financial manipulation. The National Labor Relations Board oversees workers’ rights to collective bargaining. The Consumer Product Safety Commission investigates new products and can publicize and, if need be, ban the sale of those that are unsafe. The Consumer Financial Protection Bureau protects bank depositors and the public generally against the exploitative practices of financial institutions. These, and a host of other such regulatory bodies, may see their powers effectively diminished by hostile administrations or by court rulings in favor of the businesses they regulate, but there’s no question that Congress established them to protect, in the broadest sense, the public interest.

The mission of the Fed, by contrast, has always been to protect the public interest as primarily defined as protecting capital over labor. To be sure, in its ability to arrest financial panics, the Fed can serve, and has served, the interest of the nation at large. But it can also elevate, and has elevated, the interests of the rich over everyone else. In the early 1980s, under the leadership of Paul Volcker, the Fed raised interest rates to the point that people were no longer buying cars. That brought down the inflation that was reducing the value of the bonds in which the rich had invested, but it also caused the closure of thousands of factories, beginning the hollowing out of American manufacturing and turning our industrial states into the Rust Belt. Just as the subsequent offshoring of industry had the effect of reducing Americans’ income, so did the Fed’s long-term war against a full-employment economy, in which workers can gain the power to bargain for higher wages.

When F. Scott Fitzgerald once observed that “the rich are different from you and me,” his friend Ernest Hemingway replied, “Yes, they have more money.” That is what differentiates the Fed’s clientele, as it were, from the clientele of the other regulatory agencies. It may present a challenge to the six Court Republicans to create a doctrine that propounds a legal basis for that distinction, and some of them may be so Trump-smitten that they’re willing to give over the Fed to Trump’s every whim anyway. Still, Wall Street is counting on them to keep the Fed beholden to Wall Street rather than any president.

Hence, the Court’s conundrum. And whichever way they rule—in favor of even more expansive and unchallengeable presidential power, or in favor of keeping the Fed as is—we lose.

–HAROLD MEYERSON