Monday Links - November 11, 2024
On Trump vs Fed, Tether vs DOJ, me vs Rocky Balboa (or better, Mount Drago), and Grover Cleveland
Here’s what I am reading and thinking about this week.
If Trump Tries to Fire Powell, Fed Chair is Ready for a Legal Fight, by Nick Timiraos, Wall Street Journal, November 10, 2024.
Obviously this is top of my mind and inbox. I have been writing about the once-obscure world of President-Fed relations since my first book in 2016, The Power and Independence of the Federal Reserve (also here and here). I’m quite sure I’ll have more to say here later, but I’ll pause here with this observation. Even though I am not would you would call a die-hard Fed independence defender—I think the Fed’s propensity for secrecy and opacity, especially in regulation and supervision, is very harmful—I think Powell is playing this masterfully and correctly. After all, his isn’t a claim that he should stay put because he knows better than the American public about what appropriate monetary policy should be, at least not primarily. It is that he is simply following what Congress set out to do in the relevant provisions of the Federal Reserve Act. Until Congress (or courts) say otherwise, Powell’s is a principled commitment not to the Fed only, but to Congress.
Treasury probe of cryptocurrency could pose conflict for Trump aide, by Jeff Stein et al, Washington Post, November 9, 2024.
Regular readers will know that I made a bet with a student that Tether will not be indicted for money laundering by October 2029. My bet here is not whether Tether should be so indicted: all reasonable evidence suggests that it absolutely should. My point with the bet is that I think they have mostly solved the problem of plausible deniability.
The news that the DOJ is investigating—er, was investigating?—Tether made my student write to recommend the restaurant where I would pay up the free meal. The 2024 election changes the calculus, however. The linked story focuses more on the conflict-of-interest issues in the presidential transition. I am much more interested in the ideological lens through which a major crypto infrastructural player will now be viewed. I don’t want to be right here, but in 2029 I think my student will be paying for my dinner.
Five Thoughts About Bank Regulation in the Second Trump Administration, by Bank Reg Blog, November 10, 2024
There are few blogs I read top to bottom, every post, but Bank Reg Blog is one of them. I really hope I know the pseudonymous author in real life and that they will reveal themselves later in a grand and dramatic display to the shock and thrill of all—my current bet is my genius son who pretends to get bored when I talk about banking. Regardless, the author in the linked post talks about what is coming in Trump 2.0. Most interestingly, BRB takes the minority view that Basel III will indeed find its endgame and that the endgame will look very similar to what was floated by the Fed (though not its political principals) in 2021, but what is different from the capital rules as they exist today. “Capital neutrality” will be the ambition. This, like Paul to King Agrippa, almost persuades me. At the very least it shakes my confidence from last week that “Basel III is likely dead, to be replaced by nothing.”
Rocky Run, by the City of Philadelphia, November 9, 2024.
Welp, dear readers, this powerlifter finally did an endurance race, a half marathon (kinda) at the annual Rocky Run in downtown Philadelphia. It’s only sort of a half marathon, because the 13.1 miles are broken into two legs with an interminable wait between the 5k and the 10 miler races run separately. Twenty thousand people participated. I saw more pairs of American-flag themed boxers than the rest of my life before this combined.
I’ll say this about running. In contrast to weightlifting, it is mostly terrible. I would always rather be lifting heavy. (Indeed, this morning I squatted heavy and just felt so alive; during the run, I first catastrophized my own demise and then started fantasizing about the blessed release of death. The more I think about people describing a “runner’s high” the more sure I am that they are half right and that they have been describing some pharmacologically-induced euphoria that has nothing to do with running itself.)
That said, I am not done. My run time was, by the end, adorable. But for the first 10 miles I was really moving for a big guy. And there was something special about the sheer blunt-force-trauma of it all. And I love the effect on my resting heart rate, which seems to me to be entirely a function of my running (my biggest problem in my cycling is that I can’t seem to exert enough to keep my heart rate above 130). Before I started training endurance about six months ago, my resting heart rate was 62 bpm; last week it got to 49 bpm. And I am still lifting heavy. The goal remains to hit in competition a 600 lb deadlift, 500 lb squat, 400 lb bench, and do a registered Iron Man before I am 50 years old.
A Man of Iron: The Turbulent Life and Improbable Presidency of Grover Cleveland, by Troy Senik, November 2023.
We now have a successor to the non-consecutive presidency of Grover Cleveland in former President and now President-elect Donald Trump, prompting confusion of fourth graders everywhere who want to understand how someone can be both the 45th and 47th president if they serve non-consecutively, but just the 45th even if re-elected (I maintain that someone somewhere in 1893 just messed this up and no one ever corrected him). Given how focused the President-elect is on tariffs, immigration, and crypto, I figured it was time to brush up on the presidency of the man who made all three (or at least, in the last instance, gold-backed currency) a major priority.
Senik’s is a beautifully written, very accessible quick biography that is full of good history and useful perspective. Every generation rewrites its history to serve its extremely contemporary needs, and Senik’s is no different. Read especially Cleveland’s extraordinary speech at the dedication of the Statute of Liberty and the context around the violent clashes on immigration from that time.