‘But it works well’ is not a sufficient legal argument.

D ominic believes that I am being too stingy in my view that the Federal Reserve — which, on balance, I consider to be a useful institution — is unconstitutional under an originalist reading of the Constitution. Attempting simultaneously to reassure and to persuade me, he writes:

I wish to soothe Charlie’s displeasure by pointing to a few different places to look to back up the Fed’s constitutionality. None of them is quite dispositive, and the constitutionality of national banking has been a hot topic in American history. But there is a clear winner in those contests of ideas, and it is that such banks are constitutional.

As ever, his case is fair, well meaning, and intellectually defensible. But, in its eagerness to reach a more salutary conclusion than my own, it skips over a good deal of important American history, ignores some substantial logical problems, and nonchalantly overstates the strength of the precedents that it invokes.

In essence, Dominic’s argument is the one that, in most other areas, conservatives such as he tend to dislike: Namely, that the enumerated powers that the Constitution accords to the federal government create a set of implied powers, and that determining where those implied powers end is too tough a task for mere mortals. Dominic writes:

The first place to look for authority to create the Fed is Article I, Section 8, where Congress is given the power “to coin Money” and “regulate the Value thereof.” As with Congress’s other powers, it can delegate this power to organizations that it creates, so long as that delegation is limited. The Fed does not have the power to coin money, but one could say it does have the power to regulate its value by targeting interest rates, which are the price of money. Congress also gave the Fed the task of maintaining price stability, which is an attempt to regulate the value of money. That seems like decent constitutional grounds for the Fed’s activities.

Another place one could look is earlier in Article I, Section 8, where Congress is given the powers to tax, spend, and borrow. That implies the power to tax, spend, and borrow with some kind of money, the regulation of which will be important. Banks are natural institutions that arise when money is in circulation, and it would be in Congress’s interest to have a central bank to help manage its activities.

This is the same conclusion reached by legislatures around the world, as central banks are commonplace. One could even argue that monetary policy is an inherent power of any sovereign state and therefore doesn’t need any specific authorization in the Constitution, though that is playing with fire.

With the exception of the third paragraph — who cares what other countries do? — this is a fair summary of the brief that has always been offered up by those who share Dominic’s position. There is, however, a strong counterargument, and, tellingly, that counterargument just happens to be the one that was made by the primary author of the Constitution, James Madison, immediately after that document went into effect. Indeed, during a famous speech to Congress in 1791, Madison went line by line through the claims that Dominic is now rehearsing, and concluded that they could not overcome either the specific objections he lodged, or the more general understanding of how the Constitution was actually supposed to work. Per the official write-up in the Gazette of the US, the key question that concerned Madison was:

Is the power of establishing an incorporated bank among the powers vested by the constitution in the legislature of the United States?

In his view, it was not:

After some general remarks on the limitations of all political power, he took notice of the peculiar manner in which the federal government is limited. It is not a general grant, out of which particular powers are excepted—it is a grant of particular powers only, leaving the general mass in other hands. So it had been understood by its friends and its foes, and so it was to be interpreted.

As such:

It appeared on the whole, he concluded, that the power exercised by the bill was condemned by the silence of the constitution; was condemned by the rule of interpretation arising out of the constitution; was condemned by its tendency to destroy the main characteristic of the constitution; was condemned by the expositions of the friends of the constitution, whilst depending before the public; was condemned by the apparent intention of the parties which ratified the constitution; was condemned by the explanatory amendments proposed by Congress themselves to the Constitution; and he hoped it would receive its final condemnation, by the vote of this house.

Some readers, no doubt, will consider this to be a cheap “slippery slope” objection, which conflates the idea that there ought to be some movement in the Constitution’s joints with the idea that the Constitution ought to have no bones whatsoever. But is this latter position not exactly where Dominic ends up? Recruiting John Marshall to his side, Dominic contends:

It is a legitimate end for Congress to want to control inflation and ensure a stable banking system so it can effectively carry out its enumerated powers of taxing, borrowing, spending, and issuing money. It created the Federal Reserve as an appropriate means to that end. The Constitution does not explicitly prohibit the creation of the Federal Reserve. Therefore, it is constitutional for Congress to have created it.

I find those last two sentences chilling. As a matter of fact, I cannot conceive of a way to read them does that not imply the total reversal of the Constitution’s doctrine of enumerated powers. The logic of the American system is not that the federal government may do absolutely anything unless the Constitution says it may not. The logic of the American system is that the federal government may do only those things that the Constitution expressly authorizes it to do. It is for this reason that Madison — and Alexander Hamilton, with whom Madison was arguing over the bank — initially opposed the inclusion of a Bill of Rights. In Federalist No. 84, Hamilton bluntly made this case:

I go further, and affirm that bills of rights, in the sense and to the extent in which they are contended for, are not only unnecessary in the proposed Constitution, but would even be dangerous. They would contain various exceptions to powers not granted; and, on this very account, would afford a colorable pretext to claim more than were granted. For why declare that things shall not be done which there is no power to do?

Madison, too, articulated this theory — and even did so while introducing the Bill of Rights into the House of Representatives in 1789:

It has been objected also against a bill of rights, that, by enumerating particular exceptions to the grant of power, it would disparage those rights which were not placed in that enumeration; and it might follow by implication, that those rights which were not singled out, were intended to be assigned into the hands of the General Government, and were consequently insecure.

I do not see how, without descending into Alice’s Wonderland, we can get from these straightforward structural confirmations to the conclusion that if the Constitution does not prohibit the federal government from creating a bank, then the Constitution must allow the federal government to create a bank.

And all this is before we get to much more pressing — and currently highly relevant — problem with the Federal Reserve, which is that, irrespective of the legality of its existence per se, it is presented to the public as an “independent” agency, outside of the control of any of the three branches. The Constitution clearly accommodates no such thing. As a practical matter, I of course agree with those who asseverate that the “independence” of the Federal Reserve has worked fairly well. As a legal matter, however, the claim is intolerable.

This is no mere abstraction. Right now — literally, right now — the Trump administration is engaged in a push to formally overturn a nearly-100-year-old Supreme Court case called Humphrey’s Executor, which held that there are certain executive employees whom the president is unable to fire at will. As a group, conservatives have been supportive of this endeavor, on the obviously correct grounds that Article II vests all power in the president, and that, if any executive power exists elsewhere, it is thus unbound by both the Constitution and the plebiscitary mechanisms atop which it operates. Obviously, it cannot be the case that this reading is legally mandatory in all circumstances except for the Federal Reserve. That would be preposterous. “But it works well” is not a good legal argument to begin with, but, if it is to prevail in the case of the Federal Reserve, then it ought to prevail everywhere else, too. Indisputably, “but it works well” can be just as applicable to the FBI or the FCC or the NLRB as to the Federal Reserve. To allow one exception is to give away the whole argument. If, as I believe we should, we constitutional originalists are to insist upon the enforcement of the law as it is written, rather than how we would like it to be written, we cannot make exceptions for the Federal Reserve simply because including it inspires our critics to call us names.

I am, I accept, pretty unlikely to prevail in either of the views that I have stated here. I doubt that we will see a serious reestablishment of the enumerated powers doctrine in my lifetime, and, when Humphrey’s Executor is overturned, as it soon will be, the Court is likely to either dodge the issue of the Federal Reserve completely or to invent a self-evidently ridiculous reason for excluding it that will annoy Justices Thomas and Gorsuch and nobody else besides. Nevertheless, while I know that I am going to lose this fight, I am not going to be “soothed” out of my displeasure. I understand why so much of our constitutional jurisprudence is unmoored nonsense — sadly, when the law comes up against truly difficult consequences, or overwhelming public opinion, the law tends to lose — but I will not be recruited into cheering for it. I like the Federal Reserve fine. I also think that, in a country that took its institutions more seriously, it simply could not exist under our current constitutional text.