This is obviously alarming, and if used to disregard the Judiciary's interpretation of law, unconstitutional. But I'm puzzled by the exemption of the Federal Reserve and FOMC. He's previously beefed with them, and would presumably find the additional leverage useful. Why explicitly exclude them?
The way the US political system works is that the legislative passes laws, the executive enforces laws, and the judicial interprets laws and ensures the constitutionality/legality of it all. This is relevant because in this scenario each body plays a critical role, but they 'beat' each other in different ways, almost like a game of rock, paper, scissors. The executive beats the legislative by vetoing laws, the judicial beats the executive by blocking/halting orders/enforcements of laws, and the legislative can beat the judiciary by passing new laws or even changing the constitution (though there you'd also need the states' approval).
This simplifies some things (like the fact that congress can beat the executive by overriding a veto), but I think generally captures the essence of the system. And a key point here is that judicial beats executive. The executive can interpret a law however they want, but if the judiciary disagrees then the judiciary wins. So nothing needs to be "used" to disregard the judiciary's interpretation of laws - it simply doesn't matter what the executive's interpretation of a law - that's the role of the judiciary.
The reason for this law is simply to bring the various agencies under executive authority in line. Instead of each individual organization interpreting the law (generally around the limits of their powers) at their own discretion, those interpretations will now need to pass through the attorney general.
> So nothing needs to be "used" to disregard the judiciary's interpretation of laws - it simply doesn't matter what the executive's interpretation of a law - that's the role of the judiciary.
Which is important considering that Chevron doesn't exist anymore, where the judiciary found itself out of their water, so to speak, about how to implement the law (note I say implement here, meaning that what the law says, the org does, but the details or ambiguous terms are up to the org). So, this actually re-implements Chevron in a forceful way, because it says that the judiciary, which tasked again with overseeing how laws are implemented by the executive whenever they are ambiguous.
It seems like it would be a good idea to move the global financial system off the shaky ground before it opens up into a bottomless sinkhole, but what do I know about global finances?
OK, so I have $1 trillion in Treasuries, and I sell them. What do I do with the cash? Presumably I'd like other government debt. The trouble is that I need to put this into another market, so what do I choose? The total euro government bond market is 8 trillion euros, so I'm probably gonna move that market in a way that's not good for me. That's the point I'm trying to (badly, apparently) make.
If he were to mess with the Fed it would impact Wall Street, particularly by making the market indices go down.
For whatever reason he cares about that in ways he doesn’t care about his approval ratings or the historical norms of the office. See how fast he reached a deal on tariffs earlier in the month when the markets reacted to them? Since then they’ve been slowly leading tariffs to get the message out so when the tariffs come the market will have priced it in.
He’ll get to the Fed. But it won’t be overnight. The administration will start messaging it and choreographing the change long enough before so it won’t spook Wall Street.
This is the key, there is a reason why the Fed Chairman doesn't ad-lib any of their public speeches. They read a carefully prepared statement and that's it.
Just a small wink, nod or a pause somewhere might cause panic on Wall Street.
His project2025 handlers (lets be clear hes not that smart) have calculated exactly how much opposition each outrageous thing can stand, beyond which there would be too much coordinated pushback. So its all about divide everybody against their own little thing to try and get as much fuckery through as possible
His approval rating is quite high considering the circumstances. Will take months to really understand, but at least half of America abhors the federal government.
I know it sucks, but ELon also has SpaceX, Twitter, xAI and oddballs like neurolink and boring company that would still keep him outrageously wealthy if Tesla collapses.
Also Tesla won't collapse because it's investors are the most brain damaged investors, and frankly their self-fulfilling prophecy has kept them repeatedly buying any dip back up. It's been extremely profitable to be a mindless Tesla investor.
I'd really expect that he is actually at a loss on all of those except for SpaceX which has a clear path towards being cash flow positive if it isn't already
You don't have to make money to be worth an astronomical amount. HN should know this better than anywhere.
I hate "fictitious" valuations as much as the next guy, but at the end of the day it's what people are willing to pay for equity that determines value, not what it's books look like.
Tesla technically existed on paper before Musk, but they didn’t even have a working prototype, and their facility was a home garage. In all practical terms he founded Tesla as well.
Twitter he bought obviously, which is why I didn’t mention it.
"No, Elon Musk did not found Tesla; the company was originally founded by Martin Eberhard and Marc Tarpenning in 2003. Musk became involved later as an investor and eventually took on leadership roles, including CEO, after a legal battle over the title of founder."
He hasn't "given" society anything, we pay these companies for their services (often with taxpayer dollars!)
It doesn't suck that SpaceX or Tesla exists. It sucks that the person who has profited most from those entities is using their power to destroy government agencies that oversee his companies, and more broadly, to constantly lie and try to destroy the federal government.
> He hasn't "given" society anything, we pay these companies for their services
He’s given society new products and services that didn’t exist before, the option to purchase from those companies, and the tax revenue from those companies (to the tune of hundreds of billions)
They're not fully exempted, the order does apply to the Board of Governors of the Federal Reserve System in connection with its conduct and authorities directly related to its supervision and regulation of financial institutions.
In other words, when it comes to banking regulation, the President has the final say.
The Fed is statutorily independent, and organized in a manner that the current Court has validated (unlike the CFPB). Just like Trump can't assert legislative superiority over Congress, he cannot unilaterally compromise the independence of the Fed.
I agree with Kasey, too, but I think the exception here is mostly legalese.
> The President and the Attorney General, subject to the President’s supervision and control, shall provide authoritative interpretations of law for the executive branch.
conveys respect to the judiciary branch, and states that this only applies to situations where the executive branch is interpreting laws in isolation during their enforcement of them (which happens quite often).
However, following that line:
> No employee of the executive branch acting in their official capacity may advance an interpretation of the law as the position of the United States that contravenes the President or the Attorney General’s opinion on a matter of law, including but not limited to the issuance of regulations, guidance, and positions advanced in litigation, unless authorized to do so by the President or in writing by the Attorney General.
Feels weirder, because it implies that when executive branch employees find themselves between a rock and a hard place on when a law is interpreted differently between the President and Judicial branches they must follow the Presidential interpretation; or they'll presumably be fired.
The way I see it: This isn't a broad departure from the behavior of the system two weeks ago. The office of the President, especially under Trump, has regularly taken the action of replacing employees who are unaligned with the President's agenda. When the rubber hits the road and we get to a material matter that the President and the Judicial branch disagree on, what it might come down to is: the Judicial branch can bring a suit against the employees to follow their interpretation, but the President could fire them if they do, and the President could pardon them if they instead follow the Presidential way. That's, essentially, the same situation the American system has been in for hundreds of years; the only difference right now is that we have a President who might actually do that.
Which draws back to something I've said a few times: Presidents from both parties, over the past 50 years, but especially Bush and Obama, have been relentless in interpreting the law in a direction which centralizes power into the Executive. The "normalcy" of the office until Trump was never enforced through legality; it was only decorum. It was only a matter of time before someone rejected this decorum, born out of congressional deadlock and the dire state of many Americans' wellbeing, to make the government and executive branch actually do something about it.
This isn't the first time America has had to face this question; not even close. Trump isn't exposing new weaknesses in our system; the weaknesses have always been there. Worcester v. Georgia (1832) is a great example. It ended with the President saying F.U. to the Supreme Court, refusing to enforce one of their interpretations, and, well, the Trail of Tears happened.
"Weakness", however, is an interesting term to deploy for this; it implies that the default state of the American system is that you need supermajority alignment for the government to accomplish anything, and if actors in the system find a legal way around that requirement, its a "weakness". Phrased more simply: Strength is inaction, Weakness is action. Of course, many Americans would disagree with any assertion that this is desirable, especially in the unstable geopolitical and economic situation we're in. Trump was elected, by majority electoral and popular vote, to take action; most Americans would not call the cracks he is cleaving open to accomplish his agenda a "weakness" of the system.
The only reason supermajority is required in the current Senate is because a Senator can hold a "pocket filibuster" which in practice gives any single Senator the power to veto any legislation at any time for any reason for as long as they are in the senate. Were they to change their procedure and require Senators to actually speak in order to exercise a filibuster you would see this change pretty quickly. Strom Thurmond spoke for days to filibuster the civil rights laws, and he eventually had to stop because he got tired. He had aides holding buckets under the podium for him to relieve himself at times.
I mean, yes, technically it's "not new" for the President and Judiciary to disagree at this level. But doing so results in events like the Trail of Tears, which is pretty bad.
People are alarmed and concerned because they know it's not new. It's not difficult to find horrors in American history. Decorum and norms exist for the purpose of attempting to smooth over these stress points and make a safer power structure that hopefully prevents tragedies like this. The relative peace and safety we've enjoyed for the half century or so has been largely based on a modern era of good feelings and respectful norms.
When those norms go away and the authoritarian president dares the court to enforce the laws he breaks, people, rightly, get scared. The courts don't control the army, he does. I hope the generals remeber their oath, but oh yeah, he's been replacing them with loyalists too.
We know it isn't new. We've seen the horrors of history. That's why it's scary.
Yeah yeah, America lived on and stuff after all of that. But a lot of oppressed minorities didn’t. And if you're any minority group that the ruling party doesn't like right now, you are totally justified in being deathly afraid.
(For the record, I was against centralization of executive power under Obama and Bush too. But open and blatant disrespect like this is as especially alarming and should be treated as such, not normalized or justified)
I don't disagree; except on the point that this is open and blatant disrespect. I don't have the impression that the purpose of this action is to subvert the judicial branch toward the goal of centralizing power into the executive branch. It could be interpreted that way, but the reality is that constitutional law on this is pretty clear, and Trump hasn't gotten to the point of breaching the constitution (yet).
If you've followed Trump for long enough, one of the things he talks about a lot are the "unelected bureaucrats" in the government making the real laws that end up impacting Americans day-to-day, more than Congress oftentimes. That's who this is targeted at; subordinates within the executive branch. This isn't a law, or even an interpretation of an existing law, or an expansion of executive branch powers, or even an expansion of the powers of the office of the President (because legally, as far as I know, the President has always had this power); its best described as a memo elaborating a process.
One example that might be applicable here is Net Neutrality. FCC enforcement of Net Neutrality goes back and forth; it was about to happen, until Trump in 2017 when the ruling was cancelled, and then in 2023 it came back, and now it probably won't happen again. What you're seeing there is, in the most accurate sense, something this action would expressly cover. There's zero congressional law dealing with net neutrality. Every time the FCC has touched the topic, its been the unelected bureaucratic appointment of the latest elected President making a new rule that can just as quickly be overturned or interpreted differently by the next President. Trump's new action just recognizes a process that's already been happening, basically forever.
What net neutrality really needs is the same thing a ton of these bureaucratic agencies need: a law, passed by congress. Write it in stone.
But, this is a rare thing in modern America, and maybe it always has been. Our legislative branch sucks. Seems like our Founding Fathers may have wanted it that way, but I doubt they fully understood the consequences. Getting it to do anything is like pulling hair, and that's why Executive Actions (read: authoritarian rule) have become so common. Trump, to some degree, through his mass layoffs, the defunding of various parts of the government, and now the codification of the process that the President makes decisions on-behalf-of the executive branch, is trying to scale the bureaucratic state back. Is that a good goal? Will it be successful? I don't know. But that is, under my interpretation, the best description of his aims.
> Trump isn't exposing new weaknesses in our system; the weaknesses have always been there.
exactly there; the system relies on everyone following the rules and doesn't have much in the way of remediation, other than impeachment, if the president just decides to ignore the other two branches. possibly SCOTUS, but they've hamstrung themselves with their recent decisions
And interestingly; its not clear to me that we'd have a better system if many of these weaknesses were patched. As software engineers might say, the quickest way to fix all the bugs in a system is to delete the system; the quickest way to a government perfectly resilient to authoritarian control is a government which simply can't do anything. This services no one.
At the end of the day, you can build safe-guards, and the American system of safeguards is among the best in the world. But, we also need leadership that can and will act to solve emergent problems, lest we cannot adapt to an evolving world. And, honestly, America has struggled for the past 20 years, especially since 2008. Our solution to everything has been "throw money at it", when we don't have the money we abuse our position as global reserve currency to just print more, and no one in charge has had any desire to think critically about how we get out of that hole, or how we solve any of the other problems the country faces smarter not richer.
I don't know if Trump and his team will make the problem better or worse. I feel pretty confident that they'll make it worse for some already-marginalized people, and I wish that wasn't the case, but the world that is likely to happen should we not solve these problems will not be kinder to them than the one they're in right now. Someone like Trump was guaranteed to happen after our insane, elitist, kick-the-can-down-the-road response to the GFC and COVID. There were saner voices in the room at those times. No one listened to them.
Money is by definition zero sum, otherwise the word "inflation" would have no meaning. There are good questions around what an over leveraged loan is, but fundamentally, the supply of money is to some degree fixed at any given moment.
The wealthy and powerful keep their money in tax benefited, inflation tracking assets. Many of those assets are stocks, and a major business cost is labor. Wages are generally not inflation tracking. That amplifies the benefit of inflation to the wealthy. So the buying power lost by suppressed wages and devalued savings, as well as the devaluing of all money currently in flight such as paychecks, is exactly gained by those with wealth/ownership. Inflation also makes loan's cheaper to pay off, further benefiting those with enough assets to get a loan.
When the market stagnates or companies freeze hiring or do mass layoffs, it puts employees in an even worse negotiating position resulting in even more suppressed wages past the first order effect of inflation.
So what's even better for the rich than tax breaks is inflation.
The fed is the beating heart of the economy, it pumps money through its sluices.
The fed is in many ways the Balrog deep in Moria.
Oligarchs do answer to other oligarchs, even if they don't answer to law, and there's a good chance that many of them see the impending potential disaster of either stagflation -- people won't have enough money to buy goods and the economy stalls and maybe doesn't restart, or hyperinflation -- the definitive end of American hegemony as countries move to a different reserve currency and America is no longer able to fund its military. The economy is also directly tied, if not most directly tied, to the legitimacy of the ruling regime, so a policy of choosing loyalists over qualifications or letting it be corrupted by someone selling out tomorrow for today is likely to lead to actual civil unrest instead of performative civil unrest.
My guess is that the finance business oligarchs see it as a red line because the moment the fed is corrupted, it's no longer their fed, but Trump's fed, and that will be equivalent to the moment Putin gathered all of Russia's oligarchs, with one of them in a diminutive cage in a court room, and then said "half" and held out his ring with the implication of the power relationship being clear (part of the greater story of the Magnitsky act).
It's also worth noting that normally you would get capital flight once the wealthy get scared, but the US has told every foreign country that American citizens in that country are under American jurisdiction and therefore all wealth must be reported to the US government, so while in the past an oligarch might have been happy to cause civil unrest with their unchecked greed, America's deep financial reach means that many will pay a hefty price, if they are even allowed exfiltrate the majority of their fortunes at all, binding them to the outcome of fed decisions as well.
But I'm very far from an expert, so probably wrong about some of that.
I wonder who you saw debating that. It looks really settled down and unanimous to me. Inflation is extremely harmful to poor people.
The only debate I see is about whether the Austrian school has a point and merely printing money is already harmful or if harm comes only when prices increase.
Also,
> But the opposite, deflation, hits the poor much harder.
> I wonder who you saw debating that. It looks really settled down and unanimous to me. Inflation is extremely harmful to poor people.
The debate is about the alternatives / counter-factuals: would <0% inflation (read: deflation) be better or worse for poor people than >>0% inflation? How do those two compare to ~0% (e.g., 2%, the Fed target) inflation?
There's a reason why I linked to articles on the topic of the 'cross of gold' and austerity. We've had other ways of doing things in the past and are on the current system for a reason.
A lot of folks seem to want to get rid of the Fed, get back to gold, mercantilism (which is basically what Trump's tariffs are attempting), and generally go back to the 1800s way of doing money/finance:
Try reading Project 2025's chapter on the Federal Reserve:
> Free Banking. In free banking, neither interest rates nor the supply of money is controlled by the government. The Federal Reserve is effectively abolished, and the Department of the Treasury largely limits itself to handling the government’s money. Regions of the U.S. actually had a similar system, known as the “Suffolk System,” from 1824 until the 1850s, and it minimized both inflation and economic disruption while allowing lending to flourish.[23]
[…]
> As in the Suffolk System, competition keeps banks from overprinting or lending irresponsibly. This is because any bank that issues more paper than it has assets available would be subject to competitor banks’ presenting its notes for redemption. In the extreme, an overissuing bank could be liable to a bank run.[!] Reckless banks’ competitors have good incentives to police risk closely lest their own holdings of competitor dollars become worthless.[24]
Wait how is this debatable. We saw wealth inequality explode in ‘20 ‘21 ‘22 and ‘23 as the wealthiest Americans navigated rapid inflation and then rate cuts by strategically buying everything they could and then turning into activist investors and forcing RTO and mass layoffs despite record profits.
Wealthy people can take advantage of economic turmoil by selling high and buying low, the greatest example being Buffets mass sell off and subsequent repurchasing.
> Wait how is this debatable. We saw wealth inequality explode in ‘20 ‘21 ‘22 and ‘23 as the wealthiest Americans navigated rapid inflation
What "rapid inflation"? Inflation was right around the historical average for 2020, 2021, 2023, and 2024. The only outlier was 2022 with 8% inflation, but that's still far from "rapid" historically speaking: https://www.minneapolisfed.org/about-us/monetary-policy/infl...
Wealth inequality was previously at its highest point in the US during the Gilded Age, when the US was still on the gold standard and inflation was not as much of a thing (and deflation often reined):
US wealth inequality only really started rising in the 1980s—as inflation went down. Further, as The Guardian graph shows, concentration has gone up from the 1990s up until now, even though the last few decades have had the lowest, and most stable, inflation numbers in history:
So the link between inflation and wealth concentration does not appear to have any correlation according to the historical data.
I would hazard to guess that a more promising link to wealth concentration/inequality would be the cutting of tax rates (both corporate and personal) starting during the Reagan administration, and how it reduced redistribution of money to the lower- and middle-class.
> Money is by definition zero sum, otherwise the word "inflation" would have no meaning.
Not sure that I agree, nor that the one follows from the other.
Without having the advantage of an Economics degree, I have witnessed when rising tides have lifted all boats and a majority of U.S. society benefited. Perhaps "wealth" is not a zero sum.
And if that is case, talking about "money" is orthogonal. We should talk instead about disposable income, standard of living, etc.
Discretionary income, really, not disposable. What we really should care about is the cash people have left over after they've paid for all their essentials, not just what's left over after taxes.
It might seem like it would sound impressive to say that someone has $20k/month of disposable income, but not so much if the housing market has gone crazy and groceries have become scarce and they have to spend $15k/month on a small apartment and barely enough food to feed themselves.
But capital gains - and business income taxes in a way, given how profit is calculated - do pay an inflationary tax since they're calculated on nominal gains, so I'm not at all convinced that the wealthy don't care about inflation since it erodes their wealth.
This effect can be minimized or neutered if their assets grow in real terms, but that only works in a growing-pie world, too
The way I see it, the excuse for moving to a fiat currency was that the rich people owned all the gold and social mobility had stagnated, so they decided that an elastic money supply would provide some social mobility and could go towards rewarding and building up an intellectual class.
But what happened is that a small subset of elites managed to capture the flow of new fiat money, creating even more concentration. Some social mobility was made possible, but only at the behest of this tiny number of elites... And now it's looking like we're reaching the end of that cycle and social mobility is screeching to a halt... The sheer, grotesque misallocation of fiat money has become hard to ignore. The misallocation appears to be unlimited and serves political agendas. Unlike in the gold-backed era where the elites had to provide actual value to earn their scarce gold, the elite of the current era (and their hand-picked minions) got their wealth mostly through rent-seeking and monopolization of government institutions which provided access to unlimited streams of money.
So now we have no social mobility, inequality is worse than ever (and accelerating) and we have an elite class which is ill-equipped to run any kind of economy which creates value. We are in a situation even worse than the gold-backed money era. At least then, the money was in the hands of people who COULD leverage it to deliver real value out of it. People could dig themselves out of their poverty by providing value which was worth its weight in gold. It was a level playing field. The only people who had priority access to gold were those who dug it out of the ground at great risk/expense to themselves. Nowadays, there is no heuristic or logic that you can use to dig yourself out of poverty. There is no logic behind social mobility aside from social scheming; to be chosen/funded by the elite; which produces no economic value for anyone, not even the elite. They don't even know what they want anymore so they use their money to engage on wild zero-sum political manipulations; billionaires throwing huge amounts of money against each other; going mostly into the pockets of lunatic 'activists' and nothing gets done either way; all the billionaires agendas cancel out; it just creates more crazy people with money roaming around, creating intense divisions over nothing. At the end of the day, all these 'ideological' lunatics (aka experts) funded by billionaires just care about money and they're making up all kinds of nonsense arguments to justify their paychecks... Pretending that they actually care about all this stuff when really, it's all 100% about paychecks. They're literally fighting over money, using all sorts of other ideas and social agendas as pretexts.
The people who have all the money to decide the direction of our economy and society do not have the ability or even the desire to improve it to make it work efficiently in any broad sense; they are only skilled in terms of wealth concentration, not wealth creation.
At this stage, I'm convinced that the economy would work better if the government just started handing out millions of dollars of free money to everyone and let global hyperinflation happen.
