President can fire anybody at 'independent' agencies but the Fed is different: US Supreme Court

The US Supreme Court ruled that those in leadership positions at various independent agencies including the Federal Trade Commission serve at the pleasure of the US President. The President can, therefore, remove them at will.

Not so the members of the Board of Governors of the US Federal Reserve. They can be removed only for "cause" meaning the President must prove that they have done something that deserves removal. The court did not define what "cause" meant but indicated the threshold would have to pretty high. 

Why the different treatment?

Well, the Supreme Court contends that the many independent agencies are all part of the executive- they exist to enforce various statutes. As a result, they come under the authority of the President. And the President has the right to decide who he wants to work with. Period.

As for the Fed, it has been historically conceived as an agency that is independent of the executive. Without such independence, it cannot execute its mandate effectively. 

President Trump had fired Governor Lisa Cook on charges of  mortgage fraud. The US Supreme Court is saying those charges have to be proved and Cook must have the right to defend herself before she can  be removed.

In short, there is only one truly independent agency and that is the US Federal Reserve. The Fed is not an extended arm of the Treasury. All the other agencies cannot claim such independence. 

How open is the Strait of Hormuz?

We know one thing for sure about the MoU that the US and Iran have signed.

The US wants the Strait of Hormuz opened as quickly and fully as possible. If that happens, oil prices keep falling for a while and governments get a chance to replenish their strategic reserves. To keep oil flowing at the maximum rate in the 60 day negotiation period is what the US wants. 

At the end of 60 days, there is room for an extension. The US administration will keep talking so that oil prices are under control in the run up to the mid-term elections to the US Congress in November. 

Iran would like oil to flow as slowly as possible. The greater the pain to the global economy, the greater is Iran's leverage. Moreover, within the 60 day period Iran cannot charge tolls or fees. After 60 days, it feels it has the right to charge fees towards services rendered to the ships.

So the incentives for both sides are clear enough.

What is not clear is how far the Strait has opened. The priority is to get the estimated 1000 ships stranded during the conflict out at the earliest. The sailors on these ships have had a terrible time in the past 100 days. The middle portion of the Strait needs to be demined and that will take time. Ships can pass through routes close to Oman or those close to Iran. 

The International Maritime Organisation (IMO) has created a route close to Oman through which, they say, tankers stranded during the conflict are passing at a furious pace. Iran objects, saying all ships must pass only through its own designated routes.

Just how much is going through?

In normal times, 135 ships transit the Strait each day. Military analyst Larry Johnson provides data to show that on June 23, only 7-13 ships transited the Strait. On June 24, according to FT, an estimated 41 ships transited, 15 via the Iran route and 26 via the Oman route. That is a huge jump. 

And that jump is precisely what provoked the Iran missile attack yesterday on a ship using the Oman route. The IMO has since suspended its evacuation plan. So the Strait appears to be closed again for practical purposes. 

In return for opening the Hormuz, Iran gets some of its assets released and it gets a waiver of oil sanctions for 60 days. But it loses it leverage over the global economy and the US economy.  

The ceasefire period thus seems to be working to the advantage of the US. The Oman route is spoiling the show for Iran. Iran cannot allow a situation in which it does not control the flow of traffic in the Strait of Hormuz. Hence the Iranian attack on a tanker in the Oman area.  

Will the US construe that as a violation of the MoU? And how will it react if it does?

 

Begone, India's oppressive oldies!

The Economist has a vitriolic piece on how the old in India- that is, anybody who has crossed middle age- oppress the young. It calls them 'uncles'. The piece is worth quoting at length.

An 'uncle' is easily identified:

A dead giveaway is the phrase “let me tell you”. It is inevitably followed by a thesis on what really ails the country. Another hallmark is unsolicited advice, veering from career counselling (“only girls study literature”) to dietary prescriptions (“eat five soaked almonds to build immunity”). But the defining feature of the Indian uncle is his bottomless disdain for the youth of today: feckless phone-addled softies, the lot of them. They need discipline.

How true! Condescension, sanctimoniousness, a know-all air- these are the attributes of the Indian uncle. 

I would add one more giveaway: the constant use of the word 'values'. ("These youngsters don't have any values"). It doesn't occur to them to ask themselves what their own values are.

What they have produced, in pursuit of their so-called values, is a highly repressive culture:

Thus does the country produce such infantilising policies as Gujarat’s plan to require parental sign-off before adult couples can legally marry. Or Goa’s mandatory uniforms for adult students at its public colleges. Or Delhi, where adults can vote at 18 and marry at 21 but cannot enjoy a beer until they are 25.

Thus too are Indians subject to the pronouncements of learned higher-court judges, over 85% of whom are middle-aged men. The Calcutta High Court in 2023 advised young women to “control sexual urges” rather than “enjoy the sexual pleasure of hardly two minutes”. A judge in Karnataka observed that it would be “better for the nation” if social-media access was restricted until the age of 18—or even 21. And on May 15th the chief justice of the Supreme Court lamented that “There are youngsters like cockroaches, they don’t get any employment, they don’t have any place in profession”.

I often wonder whether India's lack of innovation, its mediocrity in most fields is the result of the spirits of the young being repressed all the time.

Then, they are forever exhorting the young to work hard, which is another way of saying 'don't enjoy your life too much'. And the young slog as nobody does in the developed world:

They go to school or university. They attend extra coaching classes. And when they get home they study some more. In May more than 2m candidates sat a national exam for around 130,000 medical-college seats. Nine days later the testing agency invalidated their efforts because papers had leaked. The same month 1.8m pupils received the results of class 12 exams—the single most important test in Indian schooling. Those, too, were full of errors. A parliamentary committee is investigating both fiascos. The uncles will grade the uncles.

The behaviour of uncles is not confined to family. It extends to the workplace. And, most regrettably, the same attitude permeates academia. 

In the name of instilling discipline, teachers draw up rules that would be regarded as crazy in the western world. They also expect unquestioning obedience and  constant 'sirring'. Savage punishment is meted out for even minor transgressions, such as copying in a five-mark quiz.

The young are growing into a relatively more prosperous and freer world than the ones the uncles themselves experienced. That gets to the uncles. There is nothing to the oppression the uncles practice other than malice and envy. 

More power to the young as they stand up to the uncles!