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My favorite remaining institutions: the justice system and the Fed

Summary:
There are at least two American institutions that remain venerable, albeit vulnerable: the justice system and the Federal Reserve. On my way in this morning, I learned some details about the Hawaiian judge’s rejection of President Trump’s travel ban v2.0. While team Trump believed they’d removed the problematic language from their first run at this executive order, the judge disagreed, in part—and this is what really moved me—due to Trump’s unequivocal anti-Muslim rhetoric during the campaign. From the NYT, my bold: Judge Watson flatly rejected the government’s argument that a court would have to investigate Mr. Trump’s “veiled psyche” to deduce religious animus. He quoted extensively from the remarks by Mr. Trump that were cited in the lawsuit brought by Hawaii’s attorney general, Doug Chin. “For instance, there is nothing ‘veiled’ about this press release,” Judge Watson wrote, quoting a Trump campaign document titled “Donald J. Trump is calling for a total and complete shutdown of Muslims entering the United States.” So, what Trump said still matters in the justice system. Contrast this with the laugh Trump’s spokesman Sean Spicer got from the press corps the other day when he said now that Trump’s president and the numbers are favorable, the jobs data are, at least for now, believeable.

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There are at least two American institutions that remain venerable, albeit vulnerable: the justice system and the Federal Reserve.

On my way in this morning, I learned some details about the Hawaiian judge’s rejection of President Trump’s travel ban v2.0. While team Trump believed they’d removed the problematic language from their first run at this executive order, the judge disagreed, in part—and this is what really moved me—due to Trump’s unequivocal anti-Muslim rhetoric during the campaign.

From the NYT, my bold:

Judge Watson flatly rejected the government’s argument that a court would have to investigate Mr. Trump’s “veiled psyche” to deduce religious animus. He quoted extensively from the remarks by Mr. Trump that were cited in the lawsuit brought by Hawaii’s attorney general, Doug Chin.

“For instance, there is nothing ‘veiled’ about this press release,” Judge Watson wrote, quoting a Trump campaign document titled “Donald J. Trump is calling for a total and complete shutdown of Muslims entering the United States.”

So, what Trump said still matters in the justice system. Contrast this with the laugh Trump’s spokesman Sean Spicer got from the press corps the other day when he said now that Trump’s president and the numbers are favorable, the jobs data are, at least for now, believeable. Or Trump’s claim that there’d be no cuts to Social Security, Medicare, and Medicaid, given that the latter gets gutted by 25 percent by 2026 in the Republican’s Obamacare replacement bill he’s now supporting.

I’ve long held that societies that abandon facts can glide on momentum for a while, but eventually, an economy, environment, and government built on lies cannot survive. While it is often imperfect, the pursuit of truth remains the heart of the justice system. I only hope it can stay there.

As for the Fed, as I wrote yesterday, they’re calling it like they see it on the economy, projecting trend growth rates of 2 percent, and not buying into the administration’s phony claims that tax cuts and deregulation will generate 3-4 percent growth rates.

To be clear, I’m not saying the Fed’s policy path is the only sensible or defensible one, nor am I saying their decisions are free of outside influences, including political ones. Like everyone else who follows their work, I often hear Fed governors say things with which I disagree.

I’m saying that they’re trying to meet their mandate of full employment and stable prices through economic analysis, without spin and without yielding to political pressures, ones that I forecast will pick up in coming months.

Obviously, a key factor these two institutions have in common is political independence. Again, no institution is free from political influences, and in fact, with two, soon to be three, open seats on the Fed’s board of governors, and one seat open on the Supreme Court—all of these seats are presidential appointments (with Senate confirmation)—the afore mentioned vulnerability to political pressure is real. But for now, there are still at least two places where facts can still show up without fear of being assaulted.

Jared Bernstein
Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, Executive Director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Prior to joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute, and between 1995 and 1996, he held the post of Deputy Chief Economist at the U.S. Department of Labor.

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