Week 42 - The Return
Experts in authoritarianism advise to keep a list of things subtly changing around you, so you'll remember.
So much for what typically would be a slow news week in August. With Congress still on recess, this week it felt as if Trump was running the country on his own. He even mused at a half-day-long cabinet meeting about being a dictator! He certainly is increasingly acting like one, continuing a shocking and very public retribution campaign against his perceived enemies, taking control of D.C. and threatening other Democratic cities, and tightening his grip over the U.S. economy. I wrote more about how Trump is increasingly nationalizing our economy, akin to state-managed capitalism under authoritarian regimes, rather than a free market system, here.
One would think with all these moves, especially in betrayal of GOP orthodoxy on free market capitalism, the Republican Party would be up in arms! No. Nary a whisper from Republicans as Trump moves to take total control. The only criticism Trump is consistently facing continues to come from the conservative WSJ Editorial Board, which, on Trump’s search of John Bolton’s home, wrote, “The real offender here is a President who seems to think he can use the powers of his office to run vendettas,” and of his attempted coup of the Federal Reserve, said, “He may succeed, but the country will live to regret it.”
Our federal agencies are being quietly degraded — quite literally being deconstructed from within by Trump appointees. This week, the FBI lowered its standards for hiring amid a talent drain, FEMA employees warned of the impact on Trump’s moves on the agency’s readiness, and many more troubling signs emerged. I encourage you all to read through this week’s broken norms to understand the slow decay underway.
Closing on a note of hope, and the shift in the mood of the country. This week Iowa held a special election for a state senate seat, formerly held by a Republican, and in a district that Trump won by 11 points in 2024. In a shocker, Democrat Caitlin Drey, 37, who had no political experience, won by 11 points, breaking what was a Republican supermajority. You can see why Trump is so desperate for mid-decade gerrymandering.
On Wednesday, Federal Reserve Governor Lisa Cook, hours after Trump posted on social media that she should resign, said she has “no intention of being bullied to step down” based on “some questions raised in a tweet,” adding she takes “any questions about my financial history seriously.”
On Thursday, the Justice Department said it would investigate Cook based on the referral in Week 41. In a letter to Fed Chair Jerome Powell, DOJ attorney Ed Martin called on Powell to fire her, writing, “Do it today before it is too late!” Powell does not have the authority to fire Cook.
On Friday, Trump told reporters he would fire Cook “if she doesn’t resign.” The move could allow him to reshape the Fed, as two of the seven Fed governors are Trump appointees. No previous president has sought to oust a sitting Fed governor.
On Monday, Trump posted a letter to Cook on Truth Social in which he fired her, saying, “the American people must be able to have full confidence in the honesty of the members,” and citing her “deceitful and possibly criminal conduct in a financial matter.”
It was unclear if Trump had grounds to fire Cook, the first Black woman to be a Fed governor. Presidents can only fire Fed governors “for cause” such as inefficiency, neglect of duty, and malfeasance. The dollar, Treasury yields, and S&P 500 futures fell on the announcement.
Hours later, Cook said that “no cause exists under the law” for Trump to fire her, adding, “I will not resign.” Her attorney added, “We will take whatever actions are needed to prevent his attempted illegal action.”
Bill Pulte, the director of the Federal Housing Finance Agency, said he got a tip on Cook. Pulte used similar allegations to target Sen. Adam Schiff and New York AG Letitia James. Experts say investigations would typically be brought by FHFA’s inspector general, not the agency chief.