New York Times has-been Paul Krugman had enough trouble trying to sell his bona fides as a serious economist without making himself look more foolish mucking about with issues beyond his imaginary expertise. Federal law as it pertained to the president’s ability to fire Federal Reserve governors is no exception. Krugman took to his unhinged Substack blog to kvetch August 26 over President Donald Trump’s so-called “illegal” act of firing Fed governor Lisa Cook on grounds pertaining to potential mortgage fraud.
“I’m not a lawyer,” wrote Krugman (no kidding), “but it seems clear that he does not have the right to summarily fire Fed officials, certainly on tissue-thin allegations of mortgage fraud before she even went to the Fed.” Apparently he’s never read Section 10 of the Federal Reserve Act, which gave the President power to fire Fed governors if “cause” was shown. In fact, the Federal Reserve Act wasn’t even mentioned once throughout his entire piece.
But Krugman just ran with his bonkers premise and spewed that Trump would be tantamount to a dictator of his firing of Cook is allowed to stand:
If Powell caves, or the Supreme Court acts supine again and validates Trump’s illegal declaration, the implications will be profound and disastrous. The United States will be well on its way to becoming Turkey, where an authoritarian ruler imposed his crackpot economics on the central bank, sending inflation soaring to 80 percent.
Seriously, all that was needed for Krugman was a simple search to find the text of the Federal Reserve Act, which stipulates that “thereafter each member [of the Board of Governors] shall hold office for a term of fourteen years from the expiration of the term of his predecessor, unless sooner removed for cause by the President.”
Eureka!
But aside from Krugman’s clear ignorance, his disingenuous heebie-jeebies over the supposed Turkish economic implications of firing Cook were beyond ridiculous, and the markets weren’t buying it, as National Review pointed out August 27. But for Krugman, “And the damage will be felt far beyond the Fed. This will mark the destruction of professionalism and independent thinking throughout the federal government.”
Krugman acted as if the only reason why Trump could potentially fire Cook was because the Supreme Court said back in May 2025 that he could only do so with “cause,” pretending like the Federal Reserve Act — which had been on the books since 1913 — didn’t exist:
The Supreme Court, shamefully, has said that Trump has the authority to fire officials at will throughout the federal government, effectively eviscerating the principle of a professional civil service. But even the Court specifically carved out protections for Fed governors, saying that they can only be removed ‘for cause.’
Oy vey. No Krugman, the Court didn’t carve this out. It’s already a standing law!
The disgruntled economist proceeded to dismiss the serious allegations of mortgage fraud against Cook. “Even if true, this accusation wouldn’t meet the standard for immediate dismissal from the Fed.” Wait, what! Cook being found guilty of crime wouldn't be disqualifying? Is Krugman suggesting that he wouldn't have an issue with a potential criminal serving on the Fed's Board of Governors? The brain hurt is just devastating.
On the substance — as usual — Krugman’s wrong again. As CNN senior legal analyst Elie Honig, an actual "lawyer," concluded about Cook’s shady behavior during the August 29 edition of CNN’s The Arena:
Now, why would someone do all this? Because you get better interest rates. Because you get better tax benefits. That can be worth tens or hundreds of thousands of dollars … I think that the allegations on their face could be enough for a judge to say, ‘Look, I'm going to defer to the president on cause.’
Get off the computer Krugman and maybe go touch grass for once in your life.
