Author: Dr. H, PhD in Political Communication
On Monday, August 25, Trump claimed the authority under the Federal Reserve Act"For some reason"Dismissing Fed board member Lisa Cook on the grounds that she made false statements on the housing loan agreement,accuseShe marks both properties as primary residences in 2021 respectively to obtain more favourable loan terms.
Lisa refused to acknowledge that the president had such authority, arguing that Trump had asked for her firing "without justification."
01 Who is Lisa Cook?
Lisa Cook served as a visiting assistant professor at Kennedy School and Business School of Harvard University, and later served as an adviser to the U.S. Treasury Department and a researcher at Hoover Institution of Stanford University. In addition, she has advised the governments of Nigeria and Rwanda on banking and economic development. She has published numerous studies, especially focusing on macroeconomics, economic history, and the position and problems of African Americans in economic development.
In January 2022, then-President Joe Biden nominated her to the Federal Reserve Board of Governors. After a partisan standoff in the Senate, she narrowly won a 51-50 margin in May of the same year (with then-Vice President Kamala Harris casting a key deciding vote), and was sworn in on May 23.She is the first African-American woman to hold the position.In September 2023, she was again appointed for a term of 14 years, up to January 31, 2038.
In terms of monetary policy, Cook, like most of the Fed’s directors,Independent and sound monetary policy of the Federal ReserveEmphasize the importance of controlling inflation. In Trump's eyes, this means that Cook is on the same camp as his arch-enemy, Federal Reserve Chairman Powell,These are all institutional barriers to his quick interest rate reduction demands.。
Source: Wall Street Journal
Trump believes that lower interest rates can stimulate the economy and the stock market, thus politically beneficial to him.Expression of stock marketIt is almost equivalent to economic performance. He often regards the rise of the stock market as a "barometer" of his political success: interest rates can often push up the stock market, which is direct political capital for him. Moreover, during its administration, the United States launched a trade war against China and other countries, and tariff increases exacerbated economic uncertainty. Interest rate cuts can to a certain extent hedge against the rising costs caused by the trade war, and lower the US dollar. In line with its trade policies, U.S. exports will be cheaper, increase the competitiveness of manufacturing, and relieve pressure on businesses and consumers. Interest rate cuts will also have direct benefits for real estate, stock markets and some credit-dependent industries (such as construction and energy), which are Trump's core supporters.
For the above reasons, Trump, who is obsessed with cutting interest rates, even repeatedly criticized Powell on social media and public speeches, accusing the Federal Reserve of "dragging down the economy.""I don't know how to cooperate with the government"。This public accusation has broken the usual practice of American presidents respecting the independence of the Federal Reserve.
Note: Trump on Truth (Truth) social media publicly criticized Powell’s “tollness.” Original translation: “Jerome ‘too late’ Powell, this stubborn fool, must immediately cut interest rates drastically. If he continues to refuse, the board should take over and do what everyone knows must do!”
As an independent agency, the Federal Reserve's policy goals are to control inflation and stabilize the economy.Instead of meeting the short-term political demands of the White House.Trump directly linked the interest rate issue to his re-election and political performance. Especially during trade wars and epidemics, he hopes to offset the economic impact through loose monetary policy, while Powell insists on a gradual and prudent attitude. The differences have led to escalating tensions between the president and the central bank.
Photo: Trump and Powell
Against this contradictory background, Trump not only targeted Powell, but also gradually extended his dissatisfaction to other Fed governors, including Lisa Cook. He claimed that Cook was involved in "mortgage fraud" and announced his "dismissal", which actually continued his usual strategy: weakening the independence of the Federal Reserve and strengthening the White House's control over monetary policy through pressure or personnel means.
As part of Trump's comprehensive control of the Federal Reserve, what impact will the suspension have on relevant US policies?
Under the provisions of the Federal Reserve Act, the president can indeed remove a board member, but the threshold is very high and usually requires serious breaches of law, moral corruption or inability to perform, rather than general policy differences. In history, few presidents have dismissed a board member.
Lisa Cook's lawyer said on Tuesday that he would file a lawsuit against US President Trump's dismissal of Cook. Trump said on Tuesday that he was ready for a legal battle with Federal Reserve Governor Cook; He has prepared many of his favorite candidates to replace Cook.
If this develops, the case is likely to appeal to the Federal Supreme Court and becomeDefine the boundaries of the president's power over the FedThe term of office of the Federal Reserve usually lasts for 14 years, with the aim of avoiding short-term political pressure. If the president can dismiss members at will, it will seriously undermine the independence of the central bank and raise market concerns that costs may rise when the Treasury lends money to the public (emitting government bonds).
In the short term,Investors will worry about whether the central bank can remain independent, and if the president feels that it can intervene at any time, they will “price up” the risk. Because the people who buy debt demand higher returns to offset the political risk, the interest rate (long-term yield rate) of the government bond may rise. But in turn, if the market bets “Trump can force the central bank to reduce rates quickly”, the short-term interest rate expectations will fall. The benefit of the short-term interest rate decline is that banks are more likely to lend, and consumers borrow money; the bad thing is that the banking system may be more vulnerable in the long run and more likely to face major problems.messierAs for the impact on the exchange rate of the US dollar, on the one hand, investors may buy the US dollar for hedging, and on the other hand, the decline in the interest rate spread will lower the US dollar, so it is difficult to predict, adding a lot of uncertainty to investors.
If the court does allow the president to remove Lisa Cook on vague "cause" grounds, then not only the Federal Reserve, but also supposedly independent regulators like the FTC (Federal Trade Commission), SEC (Securities Exchange Commission), and FCC (Federal Communications Commission) could be directly intervened by the president.America's long tradition of independent regulation would be undermined.On the contrary, if the court clearly stipulates that "some reason" must be, for example, "dereliction of duty or inability to perform duties while in office", it can draw a clearer protection line for regulatory independence.
Illustration: Trump is above the Federal Reserve? Source: Bloomberg (Photo by Daniel Zender)
However, even if Trump loses the case, it is "sure to win".Even if Trump couldn’t legally “call out” Cook, such moves would.Oppressive rate cut narrativeThe Federal Open Market Commission (FOMC) has been forced to interpret the relationship between “politics and data” more frequently, boosting the cost and volatility of communications; and, shaping central banks as “bureaucratic fortresses that drive growth,” is for the core voters.Strong sign of mobility.Even if the court overturns, it can be accused of "judicial and establishment cooperation". And, with this deterrent removal, Trump has turned "rate cuts" from a technical issue toTest of loyalty., silence the remaining directors and candidates.
03 Analysis from a historical perspective: Why Trump does not reuse technocrats
Technocrats represent “expertise”, “institutional constraints” and “regular policy enforcement”.Trump’s political brand is anti-construction, anti-professionalism: he directly denies the authority of scientists, scholars, professional diplomats, the bureaucracy system, turning to “common sense”, “intuition” and “the true voice of the people.”
The governance logic of the technical bureaucracy emphasizes institutional continuity and professional constraints.Trump’s political logic emphasizes loyalty and performance.He values more whether officials can "endorse him unconditionally" on the public stage than whether they have governance professionalism. In other words,"understanding technology" is not as important as "being able to defend him on TV."
In the narratives of Trump and his supporters, technocrats tend to be classified as "deep states," or establishment bureaucracies that are seen as "obstacles to Trump's promises," rather than enablers.
Trump is both an economic and social elite (a billionaire, a product of an Ivy League education, and a center of media power), but he continues to attack technocrats and intellectual elites. This paradox is not only vividly manifested in the COVID-19 policy, but also through his suppression of universities, scientific research systems and the Ministry of Education.
Over the past year, the Trump administration has repeatedly proposed cuts to research budgets for institutions such as NIH (National Institutes of Health) and NSF (National Science Foundation) on the grounds of “wasting taxpayer money.” The Ministry of Education has been greatly marginalized during his tenure.Push for restrictions on international student visas and suppression of academic freedom(Especially in the context of tensions between China and the United States, China's international students and scientific research cooperation,See previous article by the author.Trump vows to take back control of colleges and universities, and more than 200 colleges and universities across the United States have joined forces to fight hard! Is there any other move for the White House?withThe Trump Administration's "fast governance" experiment in immigration and education: efficiency revolution or institutional tearing?These policies are not only based on economic and political considerations, but are also a symbolic struggle: weakening the authority of the knowledge community and consolidating populist narratives of “people against elites.”
Trump's declaration of war on scientific research and university institutions in the first half of the year is in line with his recent "declaration of war" on the Federal Reserve.Since the Federal Reserve established its independent status in 1951, it has long been regarded as the institutional pillar of the improvement of the Bretton Woods system and the post-war financial hegemony of the United States. Its independence not only symbolizes the specialization of domestic economic governance, but also carries the United States 'dominance of the hemisphere for half a century. The financial legacy. However, Trump's attacks on the Federal Reserve (including threats to replace technocrats such as Governor Lisa Cook) are not only a denial of the central bank's independence, but also an attempt to "dismantle the legacy of the system" and bring monetary policy back on the track of presidential elections and populist politics.
From a historical perspective,Technical bureaucracy was initially conceived in the middle of the 20th century as a “third road” that distinguished itself from the fascist regime and the planned economy represented by the Soviet Union on the other side of the Iron Curtain.Achieve the modernization of social order through expert rationality and scientific management.In the pattern of the Cold War, this philosophy was gradually absorbed by the United States. When the pattern of the Cold War fell into the trouble of "pushing people down the wall", Reagan and Thatcher were represented byThe New LiberalismListing itself as a “new pattern beyond the Cold War”, the Basel Agreement (the standard for bank capital and risk regulation developed by the International Financial Institution Basel Banking Regulatory Commission, aimed at protecting financial risks and safeguarding the stability and security of the global banking system by requiring banks to hold sufficient capital) and the IMF (International Monetary Fund), the World Bank and others.The multinational network of experts, on the other hand, is pushing for capital liberalization and marketization rules in the name of “de-politization.”
But in fact, these multinational technology bureaucracies became an important tool for the U.S. setting the agenda in global financial governance in the late Cold War.In other words, technological bureaucracy does not go beyond politics, but is intertwined with neoliberalism and Cold War hegemony, serving the American-dominated world order.
Neoliberalism representative characters (from left to right): Reagan, Thatcher and Hayek. Illustrator Anna Sorokina
However, the long-term functioning of this order also gives rise to internal contradictions.Over the decades, the social tears that this system has brought about-rising inequality, deindustrialization, weakening social security, and a crisis of legitimacy in the system-have gradually eroded the foundations of technocratic governance.
The 2008 financial crisis became a critical turning point.When the state uses huge amounts of public funds to bail out financial elites, but leaves ordinary families with unemployment and debt collapse, the legitimacy of neoliberal "expert governance" is on fire.And Trumpism was born along this historical trajectory:It uses public dissatisfaction with neo-liberal technical bureaucracy to attack central banks, regulatory systems and multilateral frameworks with nationalist and populist discourse, while substantially deepening the looting logic of neo-liberal capitalism.
In this sense, Trumpism is not a deviation or accident of neo-liberalism, but its “bad fruit,” which both reveals the long-standing hypocrisy and contradiction of neo-liberalism and pushes its most destructive tendencies to the extreme.On the one hand, it exploits the grievances created by neoliberalism to attack the independence of the Federal Reserve and the Basel framework in an "anti-elite" and "anti-technocratic" stance; on the other hand, it essentially serves the short-term political logic of domestic capital interests and nationalist populism. Just as in the 1930s and 1940s, the Nazis burned the works of the British sociologist H.G. Wells, who advocated technocratic and international collaborative governance, in order to resist internationalist rationality,Today's populism also mobilizes voters by denying the legitimacy of experts, exposing the vulnerability of technocratic governance to political polarization and hegemonic decline.
The future of technological governance imagined by British sociologist and science fiction writer H G Wells
Thus,A historic closure emerges:The technocratic movement began by emphasizing "expert neutrality and rationality," but gradually merged with neoliberalism as a tool for promoting global marketization and US Cold War hegemony. After decades of maintenance, this system was contradicted by financial crises and social discontent.TrumpismIt was the outbreak of this contradiction: it tore off the veil of technocratic governance in an "anti-elite and anti-expert" attitude, which in turn impacted the system established by the United States itself. This process shows that technocratic governance has never been truly free from politics and power, and that the international financial order formed after the war is now facing a deep crisis of legitimacy.
04 So, what kind of people is Trump using?
Trump tends to appoint people known for their loyalty and showmanship, such as "TV faces,""legal fighters," and "sports political activists." They often lack technical governance experience, but are able to demonstrate a style consistent with "Trump-style politics."
Whether it’s military (especially generals with strong symbols), businessmen (especially in the real estate/energy field), legal fighters (right-wing lawyers, judges), those who symbolize “power”, “America first”, seem to be more in line with the imagination of the MAGA culture.As long as you don't follow Trump, it is difficult to gain his respect.
For example, despite Trump's tough attitude on issues such as border defense and increasing arms spending, he despised fallen soldiers and veterans, calling the Marines killed in World War I "fools" and questioning why the United States wanted to participate in the war; At the White House meeting, the military parade was even asked not to arrange disabled veterans to appear because "I don't want to see that kind of scene". Trump often uses "losers" to describe soldiers who serve, sacrifice or get wounded. He can't understand the meaning of voluntary service and selfless sacrifice of soldiers. Trump has always linked value to monetary returns, thinking that smart people are "worthless" if they join the army. He himself was exempted from the Vietnam War medical examination because of "bone spur".
Source: Richard Ellis (British Guardian)/Getty Images
In contrast, characters like Steve Bannon and Peter Navarro, because they can.Packaging complex issues into an "America First" narrative provides the MAGA public with a framework for dichotomy between friends and enemies, thus reaching a brief alliance with Trump.
Source: Financial Times Financial Times
How do we predict Trump’s next MAGA Sports League?
While many of the “technology right wing” have a technical background (Silicon Valley entrepreneurs, engineers, venture capitalists), Trump is skeptical of “professionalism”, emphasizing personal intuition, entrepreneurship and decentralized “smart people’s spontaneous order.” They often oppose bureaucracies that are seen as “corrupt or incompetent,” believing that intellectual authority should come from market practice, innovation speed, and not academic or government certification.Technocrats rely on institutionalized science, while the right of science and technology emphasizes de-institutionalized technology and market logic.
However, the technological right wing of Silicon Valley, who seem to be different from the tech bureaucrats, inevitably falls to the same end.Some on the tech right (like Musk) will also resort to technocratic logic on certain issues (e.g. SpaceX must comply with NASA and FAA safety approvals). At the same time, some technocrats will also "borrow" the market innovation capabilities of the tech right (e.g. DARPA (Defense Advanced Research Projects Agency) and Silicon Valley interactions, AI security research institutions and venture capital funds).
Trump’s strike on the tech bureaucrats also extends to his attitude towards the tech-right group.See previous articles in this accountThe Fractured Right-Wing Alliance: Power Reconstruction from MAGA to the "American Party"）。Trump’s pattern of treating the tech bureaucracy is: as long as it constitutes authority constraints, he pressures and marginalizes. Trump’s reason for fighting the tech bureaucracy is “disobedience, disobedience”. The tech right today supports him because the two are temporarily consistent in opposition to the “deep government” and opposition to regulation. But when the tech right has increasing voice power and capital power, if it does not obey Trump, it is also seen as a potential threat. Now, the tech right is forming another “parallel authority” (such as the Silicon Valley wealthy builds his own media empire, crypto financial system, AI open community), so Trump sooner or later (has already) thought they are “uncontrolled”. In the short term, Trump will use the tech right
Conclusion: The Paradox of Elite Identity and Anti-Technical Bureaucracy
Trump himself is a capitalist elite, a socialite, and an Ivy League-educated (Penn Wharton). From this perspective, he shares an elite identity with technocrats.
But in Trump’s narrative, the legitimate elites are “successful entrepreneurs” like him, “trade talents” – they are seen as “strong leaders” and represent the will of the people. The illegitimate elites are “inutile intellectuals” “corrupt bureaucrats” “from the actual scientists”, they can neither create wealth nor hinder America’s revival. This division allows Trump to position himself as “people’s representatives” rather than “institutional elites” in the populist framework of “elite vs people”.
This is the so-called "populism-elite paradox": leaders themselves are elites, but build their own community with grassroots groups by attacking other forms of elites (especially intellectual bureaucrats). Trump's wealth and fame have instead been packaged as "capital to fight corrupt elites."
In summary, Trump does not reuse the technical bureaucracy, because he needs loyalty, performance and mobilization. The underlying logic of MAGA politics is anti-professionalism and populist performance, which exists with the elite, futuristic technology governance fantasied by the tech bureaucracy, even the technology right that is closer to MAGA. Even if the technology right represented by Musk and the MAGA have briefly allied under the slogan of "anti-building", MAGA wants to "revolt the people to the experts", and the science right wants to "replace politics with expert technology", which is the key to the separation.
Note: This article is especially grateful to Tencent news writer "Michigan Shinjuku" for valuable insights and revisions of the technical bureaucracy's historical spectrum.
This article was published exclusively on Tencent News