The unprecedented effort to oust Lisa Cook from the Federal Reserve

President Donald Trump on Monday, August 25th wrote on his Truth Social media account that he was firing Lisa Cook, the first African-American woman to serve on the Federal Reserve Board of Governors.  Due to allegations that she may have represented two residences as her primary residence when she was applying for mortgages before she was selected to serve on the Federal Reserve Board, he claims to have “cause” to fire her. Trump stated, “The American people must have the full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve. In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”

So Trump claims Cook lacks integrity even though the accusations have not been proven or led to a civil or criminal case.

I was recently exploring a Home Equity Line of Credit, when I talked to possible lenders, I downplayed the value of my home because the kitchen is original and the yard has large areas that are not landscaped. Some of the prospective lenders using algorithms gave it a higher value. I also did not say my house was way larger than it is. 

Donald Trump by contrast when he applied for a loan, in 2023 ProPublica reported he valued his huge penthouse that exceeded 10,000 square feet (about 6 times the size of my house) as if it was 30,000 square feet–essentially tripling its value. That was all part of an effort to increase wealth to secure better loan terms. In my terms, you can get a much larger HELOC if based on what I owed, I said my house was really 5,000 square feet–as my equity on paper would jump way up. 

ProPublica also found that for lending purposes the Trump Organization would claim that buildings were 98% or 99% occupied–again inflating their cash flow potential–even though tax documents indicated it was really 83% and a big part of the difference was claiming the Trump Organization was using the vacant space when reporting to Lenders, but that it was vacant when reporting to taxing authorities. Why? This lowered tax liabilities while providing a heightened basis for receiving loans at favorable rates.

Propublica talked to numerous real estate tax experts who all had the same word for this, fraud.

These documents led to the civil case brought by New York Attorney General Letitia James where the state judge ruled that, yes, Trump was liable for conspiring to commit fraud. 

With penalties the fine exceeded half a billion dollars. Last week that fine was ruled excessive by a New York State Appeals court, but the fraudulent deception was validated.

That case will next go to the New York Supreme Court.

Why so much attention to Lisa Cook? It really has nothing to do with her mortgage applications–it’s about seizing control of the Federal Reserve. The Trump Administration is searching for rationales to excuse their policy decisions–which is why these processes are public with questionable legal justification.  All designed to create a public spectacle of intimidation quite similar to the Queen of Hearts in Lewis Carroll’s Alice in Wonderland, who is childish, foul-tempered and quickly sentences people with “off with their heads.” 

Mind you, this action by a sitting President is completely unprecedented.

The difference in Wonderland is that no one pays much heed to the foul-tempered monarch while Trump gets away with far more.

Trump wants the Fed to bend to his whims and ease the money supply, lower short-term interest rates–thinking that will boost the economy.  But it might also unleash inflation. Interest rates are not the big obstacle to business investment, It’s the mercurial tariff policy.

So in his business practice Trump fraudulently “cooked the books” for his own financial benefit. As with his August firing of Bureau of Labor Statistics Commissioner Erika McEntarfer after he was displeased that the May and June job totals were revised downward, Trump is continuing an effort to “cook the books” of the economy as well.

Unfortunately, in Trump 2.0 we have reached a level of Orwellian doublespeak where similar to War is Peace and Ignorance is Strength, we can now add Trump-Serving is Integrity. 

You can also read this at my SubStack here–and subscribe to future posts.

By Dave Wells

Dave Wells holds a Ph.D. in Political Economy and Public Policy. He frequently sought out for his political and policy expertise. He is now a retired teaching professor at Arizona State University where he taught American government regularly. He co-founded and serves as research director for the Grand Canyon Institute. The views expressed are his own.

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