¶ Intro / Opening
Hi, this is Scott Galloway, NYU professor, bestselling author, serial entrepreneur, and the host of the Property Markets podcast. The markets are moving. Faster than ever, from big tech earnings and IPO drama to interest rate shocks and CEO power plays. To keep up, we're giving you more. Now, every day of the week, that's right, Monday through Friday, Prop G Markets breaks down market-moving news, helping you build financial literacy and security.
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¶ Elie Honig Announces New Book
Hey, everyone. Ellie here wishing you a happy Friday. Before we get to this week's podcast, I have an exciting announcement. For me, exciting. I hope it's exciting for you all, too. My next book. is available now for pre-order. It comes out in September. It is called When You Come at the King, Inside DOJ's Pursuit of the President from Nixon.
to Trump. If you like this podcast, I hope you do because you are choosing to listen to it. You're going to love this book. It's actually a little different than what we do on the podcast. What I did in this book is I talked to over 30, I think over 35 people who were directly involved in the.
biggest prosecutions of the modern era, from Watergate to Iran-Contra to Clinton and Ken Starr, on through Pat Fitzgerald and Scooter Libby and all the more recent ones that we've talked about, Mueller and Durham, the Hunter Biden case.
the Joe Biden documents case, and of course, Jack Smith, that insight, the firsthand perspective I got from these people is remarkable. I couldn't believe some of the people who spoke to me. It's all on the record, by the way, all the names are on it, whether it's.
David Kendall, who represented Bill Clinton. Rod Rosenstein, you know him. He's been involved in a whole bunch of different cases. Andy McCabe, FBI agent, same thing. I talked to defense lawyers for Donald Trump, for Joe Biden, for Hunter Biden. Like I said, for Clinton, I talked. to a prosecutor from Ken Starr's team, people from Watergate, Jill Wine-Banks, the famous legendary.
prosecutor was very generous. Carl Bernstein talked to me about Watergate on and on. It's a real insider perspective. As you can tell, I had a ball writing it. The stories, the anecdotes. You're going to love those. And I should say, we do a bit of what we do on this podcast, which is let's put it into bigger perspective. Where do we go from here?
in this era of Trump 2.0, where the whole idea of outside prosecutors, whether we call them independent counsel or special prosecutors or special counsel. is sort of dead, I think, for sure, for the next three and a half years. But that doesn't mean, I argue in the book, we should let it die for all time. It's an important institution. And I argue why the Trump era underscores.
the need to have some sort of accountability. Anyway, go to Amazon and order it now, if you will, because pre-sales are so important to us authors. Preet looked at it. Preet is one of my... Blurbers. He's one of the early readers and gave me a really nice review, which you'll see up on Amazon. Anyway, check it out when you come at the king inside DOJ's pursuit of the president from Nixon to Trump. I will make this deal with you. Yes, I am going to continue to pitch it to you.
but I will try to not do it ad nauseum. I will try. Okay, on to this week's podcast. We're a little late this week because as I told the team, this Ninth Circuit opinion that we're about to talk about, I knew it was going to come. Yesterday, not that I'm any kind of sorcerer, but the Ninth Circuit basically said, we know you have a hearing back in district court on Friday. So they basically said we're going to get you a ruling before then. Well, all day.
On Thursday, we were waiting for it and I'm texting the team going, it's going to come, it's going to come. It got to be 5, 6, 7 p.m. here Eastern time. We know this is a West Coast case. And finally, we just said, all right, well, I guess it'll maybe come tomorrow morning and we'll figure it out then. Well, it came at 1030 at night.
on Thursday, Eastern time, 7.30, not Central time, Pacific time. And so now we are getting this out to you as soon as humanly possible. Anyway, thanks for listening. As always, send us your thoughts, questions, and comments to letters at cafe.com.
¶ Trump National Guard Deployment Case Background
It's perfectly fine, at times necessary even, to start our legal assessment with an acknowledgement that we just don't know for sure. That's especially true in the Trump era, as the president routinely seeks opportunities to push the outer boundaries of executive power. From his characteristically transactional perspective, why not? If he wins, great, more power. And if he loses, then it's back to the status quo. Let's also recognize that, is this a good thing?
And can he do this thing are two different questions that sometimes yield different outcomes. Take, for example, Trump's federalization and activation of National Guard troops in California. It's a dreadful idea to Bigfoot state law enforcement leaders and deploy the National Guard into an environment that's more street skirmish than hostile uprising.
And if anything, it's de-escalating by the day. But that doesn't mean it's not the president's decision to make. Our legal system is typically concerned more with process than results. And sometimes the law allows the chief executive to do stupid things. Trump relied on a federal law passed in 1903 that empowers the president to deploy the National Guard to quell a quote rebellion or danger of a rebellion.
or when the president cannot otherwise, quote, execute the laws of the United States. This is not the much discussed, but not yet invoked Insurrection Act through which the president could, if he so chooses, enable the military to perform civilian law enforcement. functions. The law at issue here lacks any memorable title. It's just good old section 12406.
It has been invoked only once before, in 1970, when President Richard Nixon had the National Guard deliver mail, so quaint, during a postal worker's strike. This time's a smidge different. And because the 1970 incident never made its way into the courts, We have no on-point case law or anything all that close.
¶ California Lawsuit and Judge Ruling
Perhaps sensing the legal vacuum and hoping to create a favorable precedent, the California plaintiffs, Governor Gavin Newsom, represented by state AG Rob Bonta, engaged in a bit of opportunistic judge shopping. They chose to file their lawsuit. not in the Central District of California, which includes Los Angeles, the primary venue of the protests.
or even the Eastern District, location of the state capital, Sacramento, but rather in the famously liberal Northern District, which includes San Francisco, and where nothing especially relevant happened. It worked. Temporarily, the plaintiffs drew Judge Charles Breyer, a Clinton nominee and, yes, the brother of former Supreme Court liberal stalwart Justice Stephen Breyer.
Judge Charles Breyer ruled against Trump on every issue, procedural and substantive alike, at times arguably giving the state plaintiffs more than they had even asked for. The judge concluded that there was no rebellion or danger of rebellion, that the National Guard was not necessarily. to enforce federal law and that Trump had violated various procedural requirements. Accordingly, the judge reversed the president's deployment of the National Guard effective at noon the next day.
Governor Newsom promptly threw himself a party, play acting like a Hollywood sheriff and growling that, quote, the guard will be back under my command and Donald Trump will be relieved of his command at noon tomorrow.
¶ Ninth Circuit Overturns Judge Breyer
Cool line, but it remained true for all of about 180 minutes until the Ninth Circuit Court of Appeals stepped in and put Judge Breyer's ruling on hold pending further appeal. Late last night, late Thursday night, the Court of Appeals reversed Judge Breyer as it had signaled with its immediate pause of his decision. A unanimous three-judge panel featuring two Trump nominees and a Biden nominee held that Judge Breyer had erred by essentially substitution.
his own judgment for the president's. The appeals court did not find that a president's actions are entirely unreviewable, as Trump's team had urged. But it did conclude that the president's determination to deploy the National Guard under Section 12406. is due broad deference by the judiciary. The courts must uphold the president's determination, the appellate panel ruled, unless it is, quote, obviously absurd or made in bad faith.
Applying its highly deferential standard of review, the Court of Appeals found that Trump's activation of the National Guard was within his proper purview as president, though the judges notably punted on the rebellion issue and determined instead that deployment was necessary to enforce. The court also rejected a fairly ridiculous argument by California that the law requires the governor to consent.
and that the governor has the power to reverse the president on an issue of federal law enforcement and national security. Hence, Trump's deployment of the National Guard stands. And Governor Newsom may seek to bring the case to the Supreme Court, but they'll fare no better there. There's no way any of the court's six conservative justices will adopt Judge Breyer's expansive view of his own judicial power.
and a correspondingly minimalist view of executive power. Some of the liberal justices might even join a ruling against California as the Biden-appointed judge did in the Ninth Circuit.
¶ Executive vs Judicial Power Debate
The operative legal question here is not at bottom whether Trump was wise to deploy the National Guard. Even if we stipulate that his actions were unnecessary and foolish, the real question is. Who gets to decide? Making matters more complicated are laws sometimes specifically provide that federal courts can or sometimes cannot review the actions of the president. But the National Guard statute unhelpfully specifies neither. This is not at all unusual.
Many laws fall into the same murky in between. It then falls to the courts on a case by case basis to determine the respective roles of the judicial and executive branches. The California plaintiffs here had a superficially appealing argument. Of course, a federal judge can review the president's actions and can modify or reverse them if they're illegal. That's precisely why we have judges.
And courts and separation of powers to hold otherwise would create an unaccountable monarchy. But while the courts generally do hold the power of judicial review, that's the first case they teach you in law school, Marbury versus Madison. They don't always have to exercise it. And that power can be limited by Congress or the Constitution. Let's set aside the Trump of it all for a moment. Always a helpful, clarifying exercise.
Who exactly is Judge Breyer, an unelected political appointee who took office 27 years ago, one of over 600? federal district court judges in the United States sitting in San Francisco. Who is he to override the duly elected president, the commander in chief on issues of national security and deployment of military and quasi military forces?
What if Joe Biden or Barack Obama had determined that some use of the National Guard was necessary, but a Reagan appointed district judge in, let's say, Arkansas disagreed? Whose position prevails? Whose position should? Don't be swayed by the hyperbole about how if the courts cannot or choose not to review certain presidential actions, we'll wind up with a king or a dictator in the Oval Office. First, as we've seen throughout Trump's first five months back in office, there are plenty.
of contexts in which courts absolutely can and do intervene. Just not all of them. Indeed, judges have temporarily blocked major Trump initiatives on immigration, federal spending, economic policy and the federal workforce. Second, as the Ninth Circuit made clear, there are limits to the president's discretion if it should stay.
beyond the broad boundaries of reasonable decision making. And even if the courts can't or won't review certain executive actions, the president still faces political accountability. A president might lose support in Congress or with the states, or among the general public. And he could be impeached, at least in theory. We know that won't happen in the current political environment.
There's a bit of lawyerly arrogance at bottom to the assumption that the courts must always hold the power to reassess and unwind the actions of the president, any president, if a judge happens to disagree. Not every issue of American public life must or should be resolved by the courts. Sometimes our constitutional system leaves the decision to the president, even if the end result is nonsensical. Thanks for listening everyone. Stay safe and stay informed.