- Stocks flirt with bear market…
- Can Trump legally establish tariffs?…
- April 15 is now just week away! If you haven’t yet, you need to learn about this loophole that can LEGALLY save you thousands in taxes this year
Dear Reader,
The Nasdaq Composite strayed into bear market territory last Friday — defined as a 20% retreat from recent highs.
The S&P 500 tiptoed briefly across the ursine boundary yesterday… before stepping back out.
In all: An entire year of stock market gains has vanished into the great void of nothingness whence it originated.
Like a wonderful ball from yesteryear… it lingers only in memory.
Meantime, President Trump has assumed the posture of a wartime leader.
Here he appears to channel the shade of Sir Churchill. He counsels intelligent, strengthful patience:
- Don’t be Weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!). Be Strong, Courageous, and Patient, and GREATNESS will be the result!
How Patient Are You?
You may be strong. You may be courageous and patient.
You may even attain greatness.Yet will you be wealthier?
The answer reduces to timing. It depends upon the quantity of time you are willing to wait.
Survivors of the great gale of 1929 waited 16 years to make their losses good.
In 1972 the stock market entered a decade-long famine.
The decade beginning in 2000 is known as the lost decade. Investors endured nearly 13 years upon the hamster wheel.
The bear market of the 2020 plague was sharp — yet brief. Stocks regained their foothold within four months.
Meantime, the bear market of 2021-2022 endured the length of an average pregnancy — nine months.
How Long Will It Take to Recover the Losses?
When will this stock market reclaim its previous heights?
You know the answer of course. The answer is that nobody knows. This humble scrivener certainly does not know.
I hazard the answer reduces largely to the United States president.
Mr. Bhanu Baweja, chief strategist with UBS Investment Bank:
- This is a manmade problem, concentrated really around one man. If that one person changes his mind, suddenly the whole algebra changes.
Perhaps the whole algebra does change.
The stock market vaulted vastly higher yesterday morning upon whispers that the president may suspend his reciprocal tariffs for 90 days.
Investors bought the rumor. Yet they sold the news — the false news — as the administration dismissed the report.
Stocks reboarded the elevator… and fingered the downward-pointing arrow.
Where Does Trump Get the Authority to Set Tariffs?
Here I raise a concern:
I lift from my breast pocket the copy of the United States Constitution — where it is lodged symbolically above my beating patriotic heart.
I consult the presidential powers listed under that Constitution’s Article II.
Thus I am informed that a United States president shall:
- Be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States; he may require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any Subject relating to the Duties of their respective Offices, and he shall have Power to grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment…
- He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and 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, whose Appointments are not herein otherwise provided for, and which shall be established by Law…
- He shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient; he may, on extraordinary Occasions, convene both Houses, or either of them, and in Case of Disagreement between them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper; he shall receive Ambassadors and other public Ministers; he shall take Care that the Laws be faithfully executed, and shall Commission all the Officers of the United States.
Nowhere in Article II do I discover the presidential warrant to establish tariffs.
Does my vision fail me? Are Article II’s “penumbras” and “emanations” invisible to me?
They are invisible to me.
A 50-Year Old Emergency
The president claims this authority under the 1977 International Emergency Economic Powers Act, so-called.
He argues the United States confronts emergency conditions, including trade deficits. And that tariffs hold out a rightful remedy.
Does trade deficit constitute national emergency?
If it does, it constitutes an emergency of 50 years.
The United States last posted a trade surplus in 1975.
A bunch labeling itself The New Civil Liberties Alliance is challenging the president’s tariff-establishing powers under the International Emergency Economic Powers Act.
It maintains that:
- This statute authorizes specific emergency actions like imposing sanctions or freezing assets to protect the United States from foreign threats. It does not authorize the president to impose tariffs. In its nearly 50-year history, no other president — including President Trump in his first term — has ever tried to use the IEEPA to impose tariffs.
- His attempt to use the IEEPA this way not only violates the law as written, but it also invites application of the supreme court’s major questions doctrine, which tells courts not to discern policies of ‘vast economic and political significance’ in a law without explicit congressional authorization.
Just so. And I hazard that the courts will lend The New Civil Liberties Alliance a sympathetic ear.
The Imperial Presidency
Should a United States president enjoy the authority to determine tariff settings?
I return to Article II. And I cannot locate that authority therein.
I believe that authority is properly an Article I authority — a legislative authority.
Yet as Mr. Jefferson observed long ago:
“The natural progress of things is for… government to gain ground.”
War by war, national crisis by national crisis, the American president has gained ground.
I offer you the examples of Lincoln, of Wilson, of Roosevelt, of Bush — to name some.
Today’s president wields powers old King George would envy.
Constitutional Failure
Do you believe President Trump lacks the lawful authority to establish tariffs?
Then do not forget — he occupies ground his predecessors seized long ago.
“Whether the Constitution really be one thing, or another,” as wrote the 19th century libertarian Lysander Spooner…
“This much is certain — that it has either authorized such a government as we have had, or has been powerless to prevent it.”
The Constitution has either authorized the Imperial Presidency… or has been powerless to prevent it.
Yet the Constitution was always but a “parchment barrier” to power.
And power ultimately triumphs over parchment.
Brian Maher
for Freedom Financial News
