Mark Levin: ‘The Federal Reserve Is Unconstitutional’

[W]e live in a post-constitutional America. I’ve explained this over the decades, but I want to apply it specifically to the Federal Reserve Board. Oh Mark! The Federal Reserve Board?

Why are your interest rates so high? Who’s in charge of monetary policy? Who’s in charge of making sure your banks have enough money or don’t have enough money to lend to you? The Federal Reserve.

Milton Friedman became famous, he was always brilliant when he wrote a book about the Federal Reserve Board and how it created the Depression. It created a bad recession in the late 20s, and in the early 30s, it collapsed the economy. Why? By tightening the money supply when it should have been increasing the money supply. President Trump is complaining about that right now. He is saying the Federal Reserve Board is tightening the money supply effectively by not lowering interest rates. And traditionally, you start to lower interest rates, or you should have months ago.

So what is going on here? What is this Federal Reserve Board? We always hear about the Federal Reserve Board. The Federal Reserve says this, they’re having a meeting. Everybody treats them like they’re God Almighty in the collective themselves.

Article I, Section 8, Clause 5 of your Constitution grants Congress the power to, “… coin money and regulate the value thereof.”

So what is this Federal Reserve? We didn’t have a Federal Reserve Board until the Federal Reserve Act of 1913 during the Progressive Era, all of these government regulatory entities were created and then build upon, you know, up to the modern day. So you have the Federal Reserve Act of 1913 stick with me, because I think you’re going to find this fascinating.

The Federal Reserve Monetary Policy Committee was created in 1933 under Franklin Roosevelt. Then we have the Banking Act of 1935 under Franklin Roosevelt, and that created a Board of Governors, 12 Regional Federal Reserve Banks, Federal Open Market Committee. Wow! That’s a lot of stuff. Let’s take one at a time.

The Board of Governors are chosen by a President and confirmed by the Senate. Then you have 12 Regional Federal Reserve Banks. These are private banks, private banks in different regions of the country overseen by the Board of Governors, then you have what’s called a Federal Open Market Committee and this committee meets eight times a year under statute to do what? To set monetary policy, to determine how much funds banks need to have on hand, to determine your interest rates, to determine your interest rates.

Now these private reserve banks, remember, I said there’s 12 Regional Federal Reserve Banks. They’re private. Each have a president. The president of these 12 banks, they’re appointed by two-thirds of the directors of each bank. Now these directors of the bank don’t even have to be bankers or financial people, but there’s a statutory process for who they are. They’re all private citizens.

Do you know their names? No. Do you know the names of the presidents of these banks? No. Do you know they’re determining your economic wellbeing?

So these regional bank presidents vote on interest rates. The President of the New York Federal Reserve Bank, one of the banks votes at every meeting, and the rest of the regional bank presidents rotate in and out.

So the President of the United States has no role whatsoever in appointing any of the bank directors or the bank presidents. The Senate has no confirmation role in appointing any of those private bank directors or any of the private bank presidents.

Well, that seems problematic, doesn’t it. I want to read to you the section of the Constitution we call Article II Section 2 Clause 2 — stay with me. I’m telling a story!

Appointments Clause of the Constitution, I’m arguing this violates the Appointments Clause of the Constitution: The president shall nominate and by with the advice and consent of the Senate shall appoint ambassadors, other public ministers and consuls, judges of the Supreme Court and all other officers of the United States, all other officers of the United States whose appointments are not herein otherwise provided for, and which shall be established by law — and it goes on.

Are these not officers of the United States? I mean, this is the most powerful agency in the United States of America. It determines so much of our economic policy. It monetizes the debt, it determines whether we have growth or failure. It’s supposed to ensure that we have sound money. But look what it did all through the Obama years. It basically used monetary policy to support his profligate spending. All during the Biden years, the massive spending did exactly the same thing. And what is it doing during the Trump months of his second term? It’s got tight money. It’s making it very difficult for the economy to grow.

The housing market is on its back. The proof is in the pudding as we say. Sometimes I wonder if this guy, Powell, is sabotaging the economy or maybe he’s just too stupid, or maybe he’s just too bureaucratic.

Remember, the Federal Reserve, as Milton Friedman pointed out, brilliantly, caused the depression. Tight money when it needed to loosen up money. There wasn’t enough money for the banks to give to its customers. There wasn’t enough money to invest in the stock market or in the capital and that sort of thing and it collapsed.

Not only does the President of the United States have no statutory power to appoint these bank directors and bank presidents, he can’t remove them either. He can’t remove them.

There’s more. I mentioned the Federal Open Market Committee, FOMC, one of the three entities: It is made up of 12 members, seven members of the Board of Governors, the president of the private Federal Reserve Bank in New York, and four of the remaining presidents of the reserve banks, the private reserve banks.

This committee holds eight meetings a year, as I pointed out, it is the principal entity in our country that determines whether you can buy a home, you can get out a loan, purchase a vehicle, interest rates and much, much more, much, much more. It sets monetary policy for the United States of America.

The president can’t remove all the members of this committee. He can’t remove any of the private bank members, and he can only remove a member, one of the seven Board of Governor members, for cause. For cause? And what about the enumeration of power under the Constitution? Let’s get to the basics.

Where is the Federal Reserve in the United States Constitution? I went through them. No Federal Reserve. In Article One Section 8, Article III Section 3, Article IV Section 3, the 16th Amendment on taxation, the 20th Amendment, Sections 3 and 4.

Where the hell does this come from? All the way up until 1913 we survived without a Federal Reserve and the Federal Reserve has a very mixed record, in some cases, a very bad, bad record.

In order for Congress to create this Federal Reserve, it had to abandon the text of the Constitution because it’s not in there, and it had to twist the language of another part of the Constitution to fabricate a constitutional basis for the Federal Reserve in 1913.

Let me explain this. You are learning more constitutional law, more history, more about the economy in 20 minutes than I’ll bet you’re going to learn anywhere else, certainly tonight.

I go back to our history, to the effort of Congress to create a national bank, because this is relevant. During the presidency of George Washington, Alexander Hamilton was his Treasury Secretary, Jefferson was Secretary of State. It comes down to this issue of implied powers versus expressed powers. The exercise of implied powers often means the exercise of unauthorized power.

Restriction of the federal government is intended to be to the few and limited, specifically expressed powers that are in the Constitution. The rest is supposed to be left to the states. That’s your Constitution.

Well, then how did they create the Federal Reserve? Implied powers.

Also, there’s a provision of the Constitution called the Necessary and Proper Clause. See, I knew you’d like this. We’re getting really into the teeth of this. That’s Article I Section 8 Clause 18. I’m proving to you that we live in a post-constitutional America, and the Federal Reserve is unconstitutional: The Congress shall have power to make all laws which shall be necessary and proper for carrying into execution the foregoing powers and all other powers vested by the Constitution and the government of the United States or in any department or officer thereof.

Wow! What does all that mean?

Well, in 1791, George Washington asks Hamilton, Madison and Jefferson to give him advice on this national bank that Congress wants to create. He wants — is this constitutional? I don’t see anything in the Constitution on the national bank. Besides, I was there. I don’t remember this being discussed.

Hamilton cites this Necessary and Proper Clause. I want to get into this because he is the Treasury Secretary, and I’m reading from my book now “On Power.” And what does he say? Listen: It is not denied that there are, Hamilton writes, implied as well as express powers, and that the former are as effectually delegated as the latter. And for the sake of accuracy, it shall be mentioned that there is another class of powers which may be properly denominated resting powers. It is conceded that implied powers are to be considered as delegated equally with express ones.

Now this drives Hamilton and Madison nuts. What about the text of the Constitution? Because what Hamilton is arguing for is a tectonic shift away from the near universal understanding of the Constitution structure which drew the strong ire of Madison and Jefferson. They urged that Congress had no power to create such a national bank, that it was the role of the states to create banks, if they so desire.

Well, also in 1791 in his letter to Washington, Jefferson explained that Hamilton’s interpretation of the Constitution would “reduce the whole instrument to a single phrase, that of instituting a Congress with power to do whatever would be for the good of the United States, and as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they would please.”

“And on the floor of the House, Madison insisted that Hamilton’s proposal was a broad construction of federal powers that would deliver a powerful blow to the barriers against an indefinite expansion of federal authority.” Well, Hamilton won the opinion of Washington. So then we got a national bank.

Jefferson is elected president after Adams and he abolishes the national bank. He says, there is no authority for this. Jefferson and Madison were correct. So this goes on, this battle. We have a Second Bank of the United States, it was established in 1816. In 1832 it was vetoed, the resolution to continue it by President Andrew Jackson, who, like Madison and Jefferson, strongly opposed this bank, so the Second Bank of the United States was eliminated.

But in 1819, Supreme Court Chief Justice John Marshall, he might sound familiar, a Federalist ally of Hamilton in McCulloch versus Maryland, wrote the opinion saying that the Necessary and Proper Clause can be used to imply the authority to uphold the bank.

Now this, this guy, Madison, you know, Marbury versus Madison in 1803, the courts, the Supreme Court, and then the lower court seized power to have the final say on the Constitution. That’s not in the Constitution. We politely call it judicial review now, that’s not in the Constitution. Again, Madison and Jefferson were furious. This same Chief Justice, who was a Federalist, also ruled that you can apply powers within the Constitution to expand the authority of what it was as Congress.

So this Federal Reserve Board, this Federal Reserve, in my view, with all of its enormous power since 1913 and all of its horrendous mistakes, in my view, is unconstitutional on numerous grounds, on numerous grounds.

Now what else? And yet, we have this tariff case, seven to four decision, a federal appeals court rules that President Trump, the President of the United States, has not been and cannot be delegated authority to set tariffs to the extent President Trump has used them, even though they’ve been broadly applied since 1789, it was the only way to fund the government by George Washington to raise revenue.

And this is key, even though the President of the United States is explicitly the commander-in-chief under Article II Section 2, and his broad authority and responsibility to conduct foreign policy and tariffs have as much to do with commerce and the economy as they do with foreign policy. In fact, President Trump is using them in many instances, to have an influence on foreign policy.

So how is it possible that the Federal Reserve stands its constitutionality unquestioned, with its massive power, with private banks, private directors, private presidents who are not appointed by the President, who are not confirmed by the Senate, who have no responsibility to We, the People, yet have this enormous impact on our lives, not in the Constitution. How is it possible that that stands, but the President of the United States doesn’t have authority in setting tariffs?

In fact, last week alone, these courts that seized judicial review power from the other branches, these lower courts — last week alone, what did they do? “New York Post”: Judge blocks Trump administration’s effort to end legal protections for 1.1 million Venezuelans and Haitians. Where did these lower courts that aren’t even in the Constitution get this authority? Here we go again. They got it from nowhere. They stole it.

“The Hill:” Appeals court rules Trump can’t use Alien Enemies Act to swiftly deport Venezuelans. Why not? And who gave this court that doesn’t exist in the Constitution, the power to trump the President. Nobody! Except Marshall back in 1803.

AP: Trump’s use of National Guard during Los Angeles immigration protests, is illegal, a judge rules. These radical kook left-wing Democrat judges.

Clearly, she’s wrong, but where does she get the authority to say that? Look how they’re second guessing the President on every policy, even immigration, where he has plenary authority, foreign policy where he has plenary authority, they say Trump is stealing power. Trump is exercising power he doesn’t have.

Trump is exercising power he does have, and he is trying to defend the power of the presidency.

Look at this. This one is a doozy.

“New York Post”: Judge rules Trump unlawfully terminated more than $2 billion in Harvard research grants. Her opinion was grotesque. It might have been an op-ed for “The New York Times.”

So where in the Constitution did these courts get this power? Nowhere. So we have to hope that the Supreme Court fixes it. Yes, folks, we live in a post constitutional America, in 20 minutes, you’ve gone through step by step by step. I could do it for 20 hours, but then again, I don’t think Fox would let me.