Lisa Graves on the Supreme Court

SUMMARY

Paul Krugman interviews Lisa Graves, head of True North Research, about the Supreme Court's recent decisions that significantly expand presidential authority over independent agencies. Graves details the historical context, the implications for regulatory oversight, and the potential for increased corruption and erosion of democratic norms.

MAIN POINTS

• Lisa Graves explains the Supreme Court's decision to overturn longstanding precedent restricting presidential removal of FTC commissioners. [1:00]
• The discussion highlights the broader impact of the ruling, noting that it applies to nearly all independent agencies except the Federal Reserve. [5:00]
• Graves and Krugman discuss the implications for corporate mergers and the perception of increased corruption and favoritism within the FTC. [12:00]
• They examine the destabilizing effect of the ruling on American business, referencing historical parallels to the Gilded Age and recent examples like TikTok. [18:00]
• Graves details the loss of expertise in federal agencies due to mass firings and the Supreme Court's lack of intervention to protect civil servants. [22:00]
• The conversation turns to the Supreme Court's selective use of precedent and its discretionary docket, emphasizing its consistent support for Trump-era actions. [27:00]
• Graves critiques the court's application of the 'major questions doctrine,' contrasting its treatment of Democratic and Republican administrations. [31:00]
• They discuss potential reforms, including court expansion, jurisdictional changes, and ethics rules, as necessary responses to the court's current trajectory. [34:00]

DETAILED ANALYSIS

The conversation between Paul Krugman and Lisa Graves centers on the Supreme Court's recent decision to overturn nearly a century of precedent that limited the president's power to remove commissioners from independent agencies, specifically the Federal Trade Commission (FTC). The original precedent, Humphrey’s Executor, was established in the 1930s to prevent presidents from firing commissioners without cause, thereby ensuring a degree of agency independence and bipartisan oversight. The new ruling, however, grants the president the authority to remove commissioners at will, with the notable exception of the Federal Reserve, fundamentally altering the balance of power between the executive branch and regulatory agencies.

Graves explains that since Donald Trump resumed the presidency, he dismissed Democratic commissioners from the FTC, leaving only two Republican appointees. This lack of bipartisan representation has led to the dismissal of over thirty investigations into major corporate mergers, raising concerns about unchecked corporate consolidation and the erosion of consumer protections. The decision is rooted in the 'unitary executive theory,' a legal doctrine promoted by conservative legal circles since the Reagan era, which seeks to centralize executive power and diminish congressional and regulatory checks.

The implications extend beyond the FTC. The ruling applies to most independent agencies, such as the FDA and the Consumer Financial Protection Bureau (CFPB), with the Supreme Court previously allowing Trump to remove the CFPB director. This consolidation of power enables the president to shape regulatory outcomes by appointing loyalists and dismissing dissenters, undermining the statutory frameworks designed to ensure agency independence.

Graves warns that this shift increases the potential for corruption, as regulatory decisions may be influenced by political loyalty or financial contributions rather than public interest or expert judgment.

Krugman and Graves draw parallels to the Gilded Age, when powerful industrialists exerted disproportionate influence over government policy, leading to reforms like the Tillman Act, which banned direct corporate contributions to candidates. They argue that the current environment mirrors this era, with large corporations and wealthy individuals able to secure favorable treatment through donations or personal connections. Recent examples, such as the change in U.S. policy toward TikTok following a meeting between a major investor and Trump, illustrate the risks of regulatory capture and the perception of a 'pay-to-play' system.

A significant consequence of the ruling is the devaluation of expertise within the federal government. Graves notes that mass firings of career civil servants across agencies have resulted in a substantial loss of institutional knowledge and technical skill. The Supreme Court has not intervened to protect these experts, further weakening the capacity of agencies to fulfill their mandates.

This loss is particularly acute in areas like public health, climate science, and national security, where specialized knowledge is essential for effective governance.

The conversation also addresses the Supreme Court's selective use of precedent and its discretionary docket. Graves points out that the Roberts Court hears fewer cases than in previous decades and often chooses cases that advance its ideological agenda, particularly those expanding executive power. The court's application of the 'major questions doctrine'—used to block regulatory actions by Democratic administrations, such as student debt relief and climate change mitigation—stands in stark contrast to its permissiveness toward sweeping actions by Republican presidents.

Looking ahead, Graves expresses skepticism that the court would apply the same standards to a future Democratic administration, citing its history of blocking progressive policies while enabling conservative ones. She advocates for comprehensive reforms, including expanding the number of justices, revising the court's jurisdiction, and implementing stricter ethics rules to address conflicts of interest and restore public trust. Ultimately, Graves calls for a revitalized Congress committed to oversight and anti-corruption measures, drawing inspiration from historical moments of reform and emphasizing the need for sustained civic engagement to protect democratic institutions.

LINKS

• Paul Krugman's YouTube channel for interviews and more content.
• Lisa Graves' book 'Without Precedent', a history and analysis of the Roberts Court.
• Lisa Graves' Substack newsletter for her writings and updates.
• Lisa Graves' profile at True North Research, detailing her work and expertise.
• SCOTUSblog coverage of the Supreme Court decision allowing the president to fire FTC commissioners and overturning restraints on presidential power.

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