Paxton: TX Dems Have Till Friday To Return; How CCP Compromised FED?; Trump Talks Of Next FED Chair

Hello all you freedom-loving people. President Trump mentioned his potential picks for the Fed chair. Texas AG Ken Paxton gave the absent Democrats until Friday to return and it turns out that even the Fed has been infiltrated by the CCP. Okay let's get into it. Texas Governor Greg Abbott ordered the arrest of Democratic lawmakers who left the state amid a vote on congressional districts. Texas Democrats fled the state to block the Republicans in the legislature from holding a special session they fled in order to block a redistricting vote on Sunday. Although the US Census is conducted every 10 years, the Texas legislature has the authority to revisit the precinct structure when it makes sense to do so. Republicans believe that some of the current districts are currently biased in favor of Democrats and have lost their function of representing justice. The new map in Texas which President Trump supports could potentially help Republicans in the US House of Representatives pick up five seats. The president said last month President Trump's Department of Justice previously sent Abbott a letter in early July alleging that some congressional districts in Texas could be considered racially gerrymandered and in violation of the Constitution's 14th Amendment. Most Democratic lawmakers left Texas for Illinois to avoid the redistricting vote on Sunday. The Texas House of Representatives consists of 150 members. A quorum of two-thirds of the members or 100 members is required to conduct business. The absence of at least 51 Democratic lawmakers means that the House was unable to move forward with legislation. Democrats chose to avoid the legislature and protests were held in Democratic strongholds such as Chicago and Albany. The Republican push for redistricting reforms could win the party as many as five House seats in next year's midterm elections which undoubtedly makes Democrats feel politically threatened. The Illinois State Democratic Party put out a press release shortly before the scheduled vote indicating that in a bold and unified response Texas House Democrats have denied a quorum. Texas Governor Greg Abbott told lawmakers in a letter on Sunday that if they do not return by the time the House convenes at 4 p.m. Eastern Standard Time he will invoke Texas Attorney General opinion KP0382 to remove the missing Democrats from membership in the Texas House. Earlier on Monday Greg Abbott threatened to expel and potentially prosecute Democratic lawmakers who have fled the state. GOP Texas state senators also filed Senate Bill 62 on Monday in an effort to fire the absent lawmakers for not showing up. Texas House Speaker Dade Phelan announced after the deadline for legal session time that he was ready to sign civil warrants against all absent Democratic members if authorized by a vote of the chamber. Shortly thereafter the house did approve the warrants. Governor Abbott also quickly ordered the State Department of Public Safety to arrest the legislators for abandoning their duties and return them to the assembly building. Abbott said on Monday in a press release announcing the move this order will remain in effect until all missing Democrat House members are accounted for and brought to the Texas Capitol. He also said that it would be considered bribery if any lawmaker took money to perform or to refuse to perform an act in the legislature. The reports are these legislators have been both they sought money and they offered money to skip the vote to leave the legislature to take a legislative act that would be bribery and so the facts will have to come out but I think based upon comments made by legislators themselves they face a possibility of facing bribery charges which is a second-degree felony in the state of Texas. There's one way to cure that and and that is if they get back to the state of Texas and make quorum today at a hearing that we have at the three o'clock they can cure themselves of any quid pro quo that would subject them to potential bribery charges. In response to Abbott's threats US House minority leader Hakeem Jeffries described the governor's actions as all hat no cattle and noted that there was no basis to charge the lawmakers but Texas Attorney General Ken Paxton isn't playing games and now he's invoking a Texas Supreme Court ruling that gives the house the power to arrest absent members to force them back to work. Paxton released a statement saying I am prepared to do everything in my power to hold them accountable because these liberal lawmakers are not above the law. It's imperative that they be swiftly arrested punished and face the full force of the law for turning their backs on the people of Texas. And today for the second day in a row the Texas House failed to reach a quorum as dozens of Democrats have left the state. Two Democrat state representatives Representative Phillip Cortez and Representative Eddie Morales did return to the Texas Capitol on Tuesday though. House Speaker Dustin Burroughs said lawmakers will try to establish a quorum again on Friday as well as a pro forma session tomorrow and Thursday. Paxton also said he would seek court rulings against the Democrats if they don't return by Friday now ensuring that their seats are declared vacant. President Trump said on Sunday that he plans to name a new Federal Reserve Governor and a Bureau of Labor Statistics Commissioner this week. We know that the Fed's monetary policy is voted on by the 12 Federal Reserve Governors but even though President Trump criticizes Powell every day it's not Powell alone who decides whether or not to cut interest rates. The president does not have the power to remove the chairman of the Fed though and he likewise does not have the power to remove a Federal Reserve Bank governor. So last week the resignation of Fed Governor Adriana Kugler gave President Trump an excellent opportunity to increase his influence over the Fed and President Trump told reporters that he has a couple of people in mind for the Fed vacancy and he'll be announcing a replacement for Kugler probably over the next couple of days. And today in a lengthy interview with CNBC President Trump talked about his options for the future Federal Reserve Chair. He said that he had narrowed the field of potential chairs to four candidates. President Trump did not disclose who was in the running but his likely options include former Governor Kevin Warsh and Kevin Hassett who is the National Economic Council Director and one of President Trump's key advisors. President Trump said both Kevins are very good and there are other people that are very good too but he said his list does not include Treasury Secretary Scott Besant since Besant had taken himself out of contention. President Trump said well I love Scott but he wants to stay where he is. I asked him just last night is this something you want. Besant said nope I want to stay where I am. He actually said I want to work with you. It's such an honor. I said that's very nice I appreciate that. Before we get into the historical conflict between the Fed and the White House let's talk about a recent Fed related news story. A Federal Reserve senior executive turned out to be a Chinese communist spy. John Harold Rogers the former senior advisor for the Fed was arrested on January 31st on charges that he conspired to steal Fed trade secrets for the benefit of CCP China. He leaked enough information to allow the country to manipulate the US market in a manner similar to insider trading. The Department of Justice said Rogers had worked in the Fed for 11 years as a senior advisor in the International Finance Division. It's a position that gives him access to the core secrets of the US financial system. The Communist Party of China is a big buyer of US Treasuries holding more than 800 billion dollars at the end of 2024. Knowing in advance the economic policies of the United States such as whether the Fed fund rates will change is tantamount to getting insider information. This can give the Chinese Communist State a huge advantage when buying and selling US bonds or securities and even manipulate the market and this is where the CCP needed Rogers. Rogers was asked to teach a course by a member of the Chinese intelligence and security services posing as a graduate student at a university in the Communist China. Rogers sent classified documents to his personal email address or printed them out and brought them to the Communist Party of China. The two parties met in a hotel room in China to pass information under the guise of a class. The information he leaked was Fed trade secrets including proprietary economic data sets, tariff deliberations against China, briefings to governors and most sensitively FOMC deliberations and upcoming announcements. In return in 2023 Rogers was paid about $450,000 from a Chinese Communist State University in the name of a part-time professor. He also lied in the face of the investigation after the affair fell apart. The US Department of Justice, the FBI and the Federal Reserve's Office of Inspector General all concluded that Rogers had betrayed his country and used his position to put America's economic advantage in the hands of our enemy. So back to the conflict between the Fed and the White House. Volker was succeeded by Ellen Greenspan, a master of language. What he says can always be interpreted in both directions. That is to say he seldom states his position clearly. One of his famous quotes is, I know you think you understand what I thought I said but I'm not sure you realize that what you heard is not what I meant. He also likes to use metaphors. For example he would say that the market is irrationally exuberant. So does that mean the market is overheated or does it mean the market is booming? He doesn't explain but everyone is free to guess. Even in congressional hearings he spoke in this style and the legislators could do nothing about it. There is a benefit for him though to use this vague rhetoric. From all that we've said earlier the Fed is a regulator between the market and the government. The Fed cannot speak completely biased in favor of the market in which case the government would find a way to shut it down. But if it were subservient to the government then the bankers would surely react and it would exacerbate the volatility of the market and this would ultimately be backfired by the laws of the economy. So the Fed has to maintain a delicate balance between the two. That means that whatever decision the Fed makes it's going to upset the bankers or worry the market or upset the government. So Greenspan's ambiguous nobody can understand anything formulation managed to keep everyone from getting mad at him and even the president's couldn't find a reason to complain. He said he sat in this position for 18 and a half years through four presidents becoming the second longest-serving Fed chair and his prestige reached the peak of all Fed chairs. Greenspan's ability was not only just about verbal skills but also about balancing the needs of the market and the government under his leadership and he placed great emphasis on the importance of communication and synchronizing market expectations. However while he preserved the independence of the Fed it was also his excessive deregulation of financial derivatives that led directly to the subprime mortgage crisis of 2008 in the post-financial crisis era. The Fed welcomed two chairman Ben Bernanke and Janet Yellen. The government did not intervene too much in their decisions during this period because the policies they formulated matched with the government's needs for the most part and the government naturally welcomed them. In response to the subprime crisis the Fed's policy for more than a decade has been low interest rates, quantitative easing in order to buy treasuries. After the financial crisis however the Fed strengthened its regulatory regime. The Fed has also had regulatory authority but this part of its role was less prominent until 2008 when the US passed the Dodd-Frank Wall Street Reform and Consumer Protection Act which significantly strengthened the regulatory requirements for large financial institutions with the Fed as the primary enforcer. Wall Streeters have a headache when it comes to this act. The requirements for various investment risk metrics, capital adequacy ratios, etc. are very stringent. Theoretically it's overly strict but even with such stringent regulation there's no way to prevent some banks from going bankrupt. From this we can also realize that many laws and regulations were not needed originally but now because human greed is getting out of control the laws have become more and more stringent but the regulations are also becoming more and more complicated and the people are becoming less and less free. The fight around regulatory power wasn't very intense until 2020. There was quantitative easing and the economy was doing great so while regulatory procedures were complicated people could live with them. But in the post-pandemic era rates have risen. Tightening was accompanied by overly strict regulation and Wall Street's discontent rose. The Trump administration which is looking at economic development is naturally disgruntled as well. So among the Trump administration's complaints about the Fed in addition to complaining that Powell didn't cut rates they are also taking aim at the Fed's power to regulate. Yesterday the Supreme Court of Brazil ordered former President Jair Bolsonaro to be placed on house arrest. Currently Bolsonaro is on trial over an alleged plot to overturn Brazil's 2022 election results. Bolsonaro is accused of plotting to overturn the 2022 presidential results in order to stay in power which he denies. He is also accused of conspiring with the US government to impose sanctions against Brazilian officials which again he denies. So then Bolsonaro was banned from speaking to foreign officials approaching embassies and using social media ahead of the trial and yesterday Supreme Court Justice Alexander de Moraes ruled that Bolsonaro failed to comply with restraining orders and that he violated the court orders by posting content on his son's social media channels. In his latest order Moraes barred Bolsonaro from using a cell phone or receiving visitors while under house arrest. There was an exception for his lawyers and people who the court had authorized. Yesterday Moraes said that the monitor must stay on and only lawyers and family members can visit Bolsonaro. The spokesperson for Bolsonaro said that after the house arrest order was issued yesterday police seized his cell phone. His lawyers have since denied the claims that Bolsonaro breached any court order and said that they plan to appeal the ruling. And that's a wrap for this episode. Thank you so much for your support of Front Page. 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