We don’t deserve it. But we so need it. Please, God, have mercy on us.

How can you read this, or the author write this, and think we really have a pope?

I am in no way omniscient. Hey, I am not even seminiscent. So, while acknowledging I could somehow be wrong, I just don’t get it.

This is what St. Gregory’s administrator writes in an email about Easter Sunday there:

I have updated the SGG Easter Plan document to reflect this year’s timeline. There are areas that are highlighted in yellow that may need to be addressed—some practice times, coverage for overflow in the PLC, distribution of the Eucharist on the lawn (especially at the 11 am), etc. 
 
As of now, we are expecting and praying for good weather, which means SGG will be very busy Easter Sunday. The KofC are preparing for helping with parking during the 9 am and 11 am Masses; Hispanic Ministry plans to handle parking for the 1 pm; we also have contracted with the State Highway Patrol from 7 am to 1 pm to assist with general traffic direction. We have six troopers on Easter Sunday with two planned at the fire department area and four in the Berkeley Hall/SGG entrance. I have also communicated with the Beaufort County Traffic Engineers and the SC Department of Transportation on making significant adjustments to the lights to help us with traffic flow. Please note that Sunday, April 20 is also the last full day of The Heritage on Hilton Head Island—so there WILL BE traffic!
 
Deacon Denny plans to coordinate with the deacons on coverage, especially in the PLC and for additional coverage at Masses (or on the lawn to help with Communion, because the 11 am tends to have a large crowd).
 
The large screen will be on the lawn for the 9 am and 11 am—with the 1 pm also as a possibility!
 
If you would communicate with your ministries (ushers, greeters, etc.), that would be appreciated—and any staff who are present for any of the Masses can be expected to be “called into action” to assist with chairs, passing baskets, etc. 
 
If you have any questions, please do not hesitate to reach out to me or coordinate with your team. It will be a flurry of activity here in the next few days so get your rest and be ready to go!
 
Have a blessed rest of your week…

What is up with the bond market? Many rumors are floating around. For instance, some claim China is selling Treasury bonds in retaliation for increased tariffs. Another rumor claims the bond market is besieged by investors raising money for equity margin calls. While both are plausible, negative interest rate swap spreads point to liquidity problems. We will have more on swap spreads in an article next week.

In late March, Bloomberg published an article titled "Fed Urged to Explore Hedge Fund Bailout Tool for Basis Trades." The article's first paragraph recommends that the Fed create an emergency program to help bail out leveraged hedge funds caught underwater in basis trades.

Treasury basis trades are an arbitrage strategy that exploits the price difference between U.S. Treasury securities and their corresponding futures contracts. The trade, popular with hedge funds, aims to profit from minor discrepancies between the cash and futures market and the guaranteed convergence by maturity. Basis traders buy/sell Treasury bonds and sell/buy futures contracts using up to 20x leverage. While the trade is a guaranteed money maker if held to maturity, illiquid market conditions can cause irregular fluctuations between the bond and future prices. These variations force margin calls. Hedge funds can either meet the margin call with cash or bonds or reverse the trade. Today, that entails selling bonds and buying futures. Hence, that likely explains the swoon in the bond market. The graph and commentary below are courtesy of Bloomberg.

Either the bond market situation resolves itself, or, as we saw in 2019 and 2020, the Fed is forced to bail out hedge funds. Coincidentally, the bailout of Long Term Capital (LTCM) was also due to failed basis trades, as detailed in a section below.

What To Watch Today

Earnings

Economy

Market Trading Update

What a move! Yesterday, we wrote:

"Regarding the S&P 500 specifically, despite the complete reversal of gains yesterday, market breadth signals that we are likely closer to a near-term bottom than not. While the sell-off is certainly weighing on our emotions, selling at this level may alleviate some short-term pain, but will likely lead to missing out on a substantial rally that would provide a better exit point. Given the deep oversold conditions and the continued negative newsflow from the White House, as we saw on both Monday and Tuesday, any small piece of positive news is going to lead to a vicious rally. Use that rally to reduce risk and raise cash levels. Continue to disregard the majority of media headlines. Stock and bond market volatility has not been this high without a nearby bottom in prices."

Yesterday, the White House took an interesting pivot. On Monday, a "fake news" headline suggested that the White House would pause tariffs for 90 days. After seeing the markets' reaction to the headline on Monday, the White House used that same narrative to alleviate the continued asset liquidation in the stock and bond markets by pausing tariffs for 90 days. Was Monday a "leak" and a "test balloon," or did President Trump provide the market a much-needed short-term lifeline? Whatever the reason, it was welcome news and allowed investors to rebalance portfolio risk and exposures.

As shown, if we use the 2022 market correction as a model, the first decline led to a 61.8% retracement. While the decline so far has been more dramatic, there are two retracement levels that investors should consider using to raise cash levels and rebalance portfolio risk. The first is the 50% retracement level at 5480, then the 61.8% retracement level at 5600. We will use both of the levels to begin raising cash levels, adding hedges, and rebalancing exposures as needed. With the weekly "sell signal" in place, we will very likely see the market either stall at those levels (best case scenario) or retrace to test recent lows (most likely case.). Let's see if we can get some follow-through on today's trading.

Long Term Capital Management's Bailout

The potential basis trade blowup reminds us of the Long Term Capital Management (LTCM) bailout in 1998. The following quote is from our article- From LTCM to 1966:

LTCM specialized in bond arbitrage. Such trading entails taking advantage of anomalies in the price spread between two securities, which should have predictable price differences. They would bet divergences from the norm would eventually converge, as was all but guaranteed in time.

LTCM was using 25x or more leverage when it failed in 1998. With that kind of leverage, a 4% loss on the trade would deplete the firm’s equity and force it to either raise equity or fail.

The world-renowned hedge fund fell victim to the surprising 1998 Russian default. As a result of the unexpected default, there was a tremendous flight to quality into U.S. Treasury bonds, of which LTCM was effectively short. Bond divergences expanded as markets were illiquid, growing the losses on their convergence bets.

One or multiple hedge funds appear to be caught offside as the tariffs roil markets. What comes next? If the 1998 LTCM debacle is a good proxy, the Fed will support the hedge funds, ultimately protecting the banking system. QE is possible, but more likely is a program in which the Fed buys or sells cash bonds to the hedge funds while the hedge funds sell or buy Treasury futures to the Fed. Essentially, the Fed will help the hedge funds liquidate the trades.

The takeaway is that the financial system has highly leveraged players, including some like LTCM, which supposedly have “foolproof” investments on their books. Making matters fragile, the banks, brokers, and other institutions lending them money are also leveraged. A counterparty failure thus affects the firm in trouble and potentially its lenders. The lenders to the original lenders are then also at risk. The entire financial system is a series of lined-up dominos, at risk if only one decent-sized firm fails.

Trump's Economic Revolution: Unraveling A Blessing And A Curse

Deuteronomy 11:26 – “Behold, I set before you this day a blessing and a curse.” This biblical passage has been used countless times to describe the global economic structure in place since 1944. As World War II raged and Britain suffered significant financial stress, the allied forces signed the Bretton Woods Agreement. As part of the pact, the US dollar would replace the British pound as the world’s reserve currency.

Since then, many of the original commitments have gone away. However, friends and foes of the US remain heavily dependent on the US dollar as its reserve currency. With it, they accept the blessings and curses that come with it. The unwritten US dollar reserve pact is and always has been unsustainable. Nevertheless, every US President since 1944 has fully supported it. Donald Trump may no longer be willing to pass the buck as his abrupt economic and foreign policy reversals signal economic revolution.

READ MORE...

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“Thou shalt not commit adultery” (Ex 20:14)…

Francis Congratulates King Charles and Queen Camilla on the Anniversary of Their Adulterous Union

Francis during a general audience on March 24, 2024 (image: Shutterstock/Fabrizio Maffei)

[UPDATE: Video of Charles and Camilla’s Visit added to post below]

Nine years ago, on Apr. 8, 2016, the Argentinian Modernist Jorge Bergoglio (aka ‘Pope’ Francis) issued the infernal apostolic exhortation Amoris Laetitia, which gave the green light to those in the Vatican II Church who are in an adulterous second ‘marriage’ — the so-called ‘divorced-and-remarried’ — to receive Holy Communion without first repenting of their adultery.… READ MORE

This article follows Born of the Virgin Mary (1) and (2). Companion and image of the man in the ministering of the truth, guide and model of the man in the ministering of charity: such is the woman as Christianity has made her; such are the two bases of her glorification, even on earth, since […]

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April 15 Provides A Wonderful Lesson On How Government Conditioned Americans To Tyranny

Paul Craig Roberts

Americans have become so accustomed to living under tyranny that they are probably incapable of recognizing tyranny.  Once upon a time, April 15 was the annual day of infamy.  It was the day you had to pay your income taxes. 

Americans have been subjected to a tax on their working lives for less than half of their existence as a free people, or, to correct myself, as a former free people.  With the gradual long-term demise of American education, helped along by the US Department of Education, the content of what Americans know has dramatically changed.  Once they knew who they are and the principles on which their liberty rested.  Today they know how to play video games, write software for programs that regulate their lives from instructions their cars give them to how the NSA and businesses spy on them. They know movie trivia, the affairs of celebrities, the standings of their college football teams, their golf scores, and the expense of their wives’ remodeling of kitchens and baths.  

But they don’t know much else, except the Democrats know that Trump is evil. And America and white people are racist and evil. And there are many genders.  And illegal immigrant-invaders have the same, or greater, rights as American citizens.  Just ask any Democrat federal district judge.  And still  Americans vote for Democrats.  In other words, the question is:  Are the American people capable of self-government?

The historical definition of a free person was a person who owned his own labor.  Historically most people were not free.  They were either slaves of serfs.

A slave did not own his own labor.  His owner did.  His owner purchased the slave’s labor when he purchased the slave. He purchased the slave in order to acquire his labor which was needed as there was no available labor force to hire. Instead, producers had to acquire a work force by making a capital investment, not by paying a wage. In place of a wage, producers had to purchase labor by purchasing slaves, often warriors who were captured in the black King of Dahomey’s slave wars.  Many black Africans who became slaves in the New World, were the defeated black warriors in Dahomey’s slave wars. Those who themselves were fighting for slaves became, in defeat, slaves.  

The fact that a black warrior class, which constituted a percentage the slaves on 19th Southern cotton and tobacco plantations, never revolted, not even when provoked by Lincoln’s “Emancipation Proclamation” when no while male adult  presence was on the plantations, is proof that the Northern propaganda against the South had hatred of Southerners as its purpose.  It is amazing but a fact that the world view of every person on planet Earth is contaminated by propaganda accepted as fact.  Almost every narrative people believe is false.

A Medieval serf owned the largest part of his labor. The lord of the manor on which the serf lived had use rights to no more than one-third of the serf’s labor, and serfs had use rights to a portion of the land.  

We can look at the lords use rights in the serf’s labor as a form of taxation. A system of use rights predates and is different from a system of alienable rights, rights that can be bought and sold.  But if we ignore the exchange, which involved the serfs rights to use the land in exchange for the rights of the lords to use the serfs’ labor, we have the fact that serfs did not own the full portion of their labor.  This is the identical position of all peoples who today labor under an income tax.  

In other words, the medieval era was brought back to Americans with the income tax in the second decade of the 20th Century.

From their inception until 1913–really until 1918–Americans were still a free people.  The income tax introduced in 1913, along with the Federal Reserve–two disastrous events in American history–turned free Americans into the serfs of the government.  Your labor, and the income from it, no longer belongs to you.  Your feudal lord, your “constitutional democratic” government, has the same claim to your labor as a feudal lord had on a serf’s labor in the medieval era.

The handful of conspirators who snuck a medieval fiscal policy into free America were far more clever than the American population and legislative leaders.  They brought the income tax in at such a high threshold and such a low tax rate that no threat was perceived.  

Some decades ago I wrote the story.  When the constitutional amendment to pass what was an unconstitutional income tax was presented to states for ratification, few states had citizens with sufficient incomes to be subject to income tax.  I remember that the Georgia legislature said it had no objection to the income tax, because there was no one in the state with an income large enough to be subject to the tax.

What the state legislatures overlooked is that once an income tax is in place, all that is needed is a “crisis” and down go the thresholds and up go the tax rates.  This happened to Americans with the First World War.

Instead of seeing April 15 as the day Americans turn over to a master a share of their year’s working time, Americans experience a bonanza.  They get a “tax refund,” a gift from the government in time for their summer vacation. For them, income tax withholding is a form of forced saving. They are overwithheld and denied the use of their money all year and then receive it as a “refund.”

Imagine their view toward the income tax if they had to pay the full amount annually on April 15. If you hadn’t been withheld, you would be faced with an income tax payment the size of a mortgage payment, car payment, and credit card payment combined. Your view toward the government would not be the same as the view that results from being handed a refund.

From the government’s standpoint, this is the advantage of the withholding tax.  You never see the money in the first place. Your salary is the take-home amount.  The employer pays the tax for you.  You file a  tax form, and money from the government appears.  

Government regards it as wonderful how stupid Americans are, and  stupid Americans regard it as wonderful that the government sends them money every year for their summer vacations.

How exactly do you make a government this corrupt and a people this stupid great again?

Prior to the income tax the work force received weekly pay envelops with cash.  What workers earned was not recorded in order that it could be taxed by withholding.  No one needed a bank.  The income tax turned your work time into a criminal offense should you misstate it on your income tax return. Thus, for the first time among a free people a workers work and how he reported it became a possible criminal offense leading to the imprisonment of the “free” worker.   If truth be known American taxpayers have been subject to worst punishment than slaves on 19th century cotton plantations.

Yet, after 100 years there are no protests. Serfdom is so institutionalized that it is not recognized.

Taxation has many inequities.  I will point out one of them–the narrative of a capital gain.  Let’s take the example of a home.  Over time house and land prices rise with inflation.  For example, when I was in high school the price of an upper middle class house in the city in which I lived was $20,000 – 25,000.  After decades of life in the house its value would be much higher.  If the property is sold, the government will say you have a capital gain in the price rise. But the price you receive is the replacement cost of the house.  You have no gain.  Indeed, after closing costs and real estate commission, you cannot replace the property with your net receipts.  So where is the gain?  The same holds for financial instruments.  There is no such thing as a long-term capital gain.

For investment properties you can avoid the capital gains tax by reinvesting the sale proceeds into another investment property, but this avenue is not open to homes used for residence.

There are short-term capital gains from, for example, financial market participants conducting arbitrage or front-running stock trades and making a penny or fraction of a penny per share in large volumes.  In reality this is ordinary income from a day’s work.

Americans are accustomed to thinking of inequities in the tax laws in terms of loopholes for the rich, but the worst inequities go beyond the special pleading and lobbying successes of organized interests.

For most of our history the US government was financed by tariffs.  If we could return to tariffs as the basis for government revenue, we could regain our freedom.

For those of you with bearish nightmares, we share one important takeaway from Monday's market roller coaster. While there is a good chance the market may explore new lows over the coming months, we must appreciate that there is plenty of fuel for a sizeable bounce. The one piece of important evidence supporting this thesis was a Tweet claiming that Trump is considering a 90-day pause in all tariffs except those on China.

As the graph below shows, the S&P 500 rose 8.5% in a half an hour, solely based on one non-official Tweet. Furthermore, there was no corroboration from mainstream media or the White House. Once debunked, the S&P 500 gave up two-thirds of the gain. But, it finally found some stability. Whether the administration planted the Tweet or it was fake news designed to reap a quick profit, the one important lesson is that the market anxiously awaits positive tariff news to buy aggressively. Moreover, note that the 8.5% rally occurred despite the Tweet claiming that all tariffs remain on China. As we saw on Tuesday, any signs China is willing to deal could erase some of the damage we have witnessed over the past week.

The recent bearish trend may not be over even if we get friendly tariff news. Significant technical damage has occurred. Furthermore, the economy is weakening, and the Fed, at least for now, doesn't appear willing to cut rates.

What To Watch Today

Earnings

• No notable earnings releases today

Economy

Market Trading Update

Yesterday, we discussed the process we will follow on a significant market rally, and all it will take is some good news on the tariff front. So far, we have not gotten that as of yet. The market tried to rally early yesterday morning but was swatted down by the escalation of tariffs on China. With no sign that China will negotiate, the pressure remains on the market. But importantly, it is not just one market under pressure but all markets, as shown. In other words, there has been no safe hiding place, even for the ultimate "safe-haven" asset.

As noted, the bond market, which is the only "risk-free" investment, has also been under considerable pressure over the last two days. On Monday, Treasury bonds had a sharp decline far outside of what the economic or tariff data suggested would be the case. We suspect that on Monday, there was forced liquidation through either margin calls or demand redemption of an institutional fund. The outsized selling and volume on a single day for bonds is highly unusual. The media excuses of "tariffs" or "economic concerns" are issues the bond market has known about for quite some time.

Last week, in our Before The Bell segment, I noted that bonds were overbought, and we could see a rotation with oversold stocks. With bonds in an uptrend from the 2025 lows, they are now oversold and present a better entry opportunity than last week. With the Fed set to cut rates and the risk of recession on the rise, the outlook for yields remains optimistic. Furthermore, we suspect that bonds' "safe-haven" nature will regain its stature if the market decline continues.

Regarding the S&P 500 specifically, despite the complete reversal of gains yesterday, market breadth signals that we are likely closer to a near-term bottom than not. While the sell-off is certainly weighing on our emotions, selling at this level may alleviate some short-term pain, but will likely lead to missing out on a substantial rally that would provide a better exit point.

Given the deep oversold conditions and the continued negative newsflow from the White House, as we saw on both Monday and Tuesday, any small piece of positive news is going to lead to a vicious rally. Use that rally to reduce risk and raise cash levels. Continue to disregard the majority of media headlines. Stock and bond market volatility has not been this high without a nearby bottom in prices.

Remain patient, even though it's difficult right now.

Wall Street's Principal Agent Problem

It's rare to hear a Wall Street analyst predict a bear market. Moreover, it's even rarer for Wall Street to have anything but a buy recommendation on individual stocks. For example, the heat map below, courtesy of FinViz, shows the average Wall Street analyst recommendation for each of the S&P 500 stocks. Per the scale at the bottom right, the brightest green is for strong buy recommendations. The color spectrum fades to a darker green than red as the recommendations turn less bullish. Virtually every one of the S&P 500 stocks is green. How can almost all 500 stocks from diverse industries and unique financial situations have buy ratings? The answer is the principal-agent problem.

Wall Street has a significant conflict of interest. Better known as the principal-agent problem, Wall Street must serve two distinct types of clients. Two of Wall Street's primary sources of revenue are from trading and capital raising. For Wall Street to earn business from companies needing capital, those companies demand Wall Street to make them look good. Consequently, this results in inflated ratings. However, Wall Street also advises investors. This provides trading income. By and large, Wall Street executives have found that the policy that works best for their bottom line is to be permabulls. This way, investors are more likely to be active, and companies looking to raise money have more willing buyers.

The principal-agent problem clouds Wall Street's market views. Being bearish is not in their best financial interest. Accordingly, take their advice with a grain of salt!

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This article was published by Kelsi Sheren on April 8, 2025

Kelsi Sheren
By Kelsi Sheren

Yes, Yes they are.

Maclean's recent article advocating for the inclusion of individuals with mental disorders in Canada's Medical Assistance in Dying (MAID) program isn't just controversial—it's dangerously unethical, manipulative, fundamentally dark and sinister.

Maclean’s is very quickly gaining a reputation for promoting death porn and suggesting that those suffering mental illnesses should have access to assisted dying. They are once again choosing to send a chilling message to it’s readers, which at this point I doubt are many. They implicitly suggests that lives affected by mental health conditions are less valuable, less deserving of intensive care, treatment, or societal compassion.

In the most recent article promoting and manipulating it’s readers is their attempt to frame suicide as a legitimate option for those struggling with mental health, when all this really shows is Maclean's constant attempt at devaluing the lives of the mentally ill, effectively promoting hopelessness rather than hope.

Imagine the devastating effect on a vulnerable individual reading that their life is considered disposable or irrecoverable by society. This undermines decades of work aimed at destigmatizing mental illness and reinforces dangerous stereotypes about mental health struggles being inherently hopeless. While reading there most recent article I couldn’t help but notice the add for “war amps” on their site, which makes me laugh a bit because people who aren’t perfect are exactly what this magazine is attempting to suggest are disposable.

This magazine continues to frame the argument that people with mental illness are “irremediable”. In the Maclean’s article the concept of "irremediable" mental illness is a wild one. This position is scientifically and ethically unsound. Mental illness, unlike terminal physical illness, is complex, dynamic, and subject to significant change and improvement over time.

Mental illnesses such as depression, PTSD, bipolar disorder, or schizophrenia can indeed be severe and debilitating. But the nature of these illnesses is often fluctuating, with many sufferers experiencing meaningful recovery after proper care, therapy, medication, lifestyle changes, and even innovative treatments like psychedelics.

To label someone’s mental condition as "irremediable" is both wildly misleading and irresponsible, but this magazine seems to have no soul and seems quite alright with removing the very hope necessary for recovery and invalidates the lived experiences of countless individual’s who have successfully recovered from severe mental health episodes.

As someone who has personally overcome suicidal thoughts and severe mental health struggles, I can affirm that recovery and healing are possible. At my lowest point, it felt impossible to see a way forward, but with appropriate support, therapy, community, plant medicine and determination, I found a path out of that darkness. But according to this article Maclean’s wrote, I would have been considered “irremediable” and If I had seen this story over the 10 years of struggling with my mental health, then I'm sure I would have lost hope too. They are contributing to the idea that there is nothing left to live for so why the fuck should we even try mentality.

The thing is my story isn't unique; countless others have walked similar journeys, reclaiming their lives and thriving beyond their struggles.

To advocate for MAID as an option for mental health conditions fundamentally denies stories like mine and many others, wrongly presenting death as an inevitable or acceptable outcome rather than encouraging genuine healing and recovery.

Expanding MAID to mental illness sets a dangerous and dark cliff people will easily jump off of once we remove the responsibility of being the person to take our own life. A lot of the reason people stop before they attempt suicide is the FEAR or pain and what death will feel like. MAID and the “Dr’s” that do this dangle the carrot like a prize, removing the burden from the person and offering an easy way out.

Initially positioned as compassion, this policy change quickly risks becoming a tool of coercion, especially for marginalized and economically vulnerable groups, something we are continuously seeing in Canada and will continue to see as our healthcare system and country crumble to the ground.

Individuals suffering from severe mental health issues also face compounded struggles—economic hardship, isolation, lack of family support, or chronic homelessness. Offering MAID to these individuals coerces vulnerable people into viewing suicide as a reasonable escape from systemic failures and insufficient social support.

This has never once been about compassionate care. It’s darker than that more sinister and the reality is, is that it’s an abandonment of society’s moral responsibility to provide robust and holistic support systems. MAID has becomes not a tool of autonomy but a grim solution offered by a liberal government who is unwilling to invest adequately in mental health care but will send hundreds of millions of dollars overseas, to support ANYONE BUT it’s citizen’s.

The role of psychiatrists and mental health practitioners is to preserve life, treat illness, and support recovery. Maclean’s advocacy fundamentally conflicts with these professional ethics. Asking mental health professionals to facilitate MAID turn’s healer’s into facilitators of death and we are essentially making all healthcare practitioners EXECUTIONERS. Trained killers, guns for hire and instead of using a gun which would be more humane in my opinion. We are giving them government funded-non FDA approved drugs to inject into the veins of the vulnerable victims of people that have been convinced that death is the only option by people DWD and Macleans.

This ethical dilemma isn't abstract. It poses real-world risks of eroding trust in mental health services. People are hesitating to seek help, fearing their mental health struggles might qualify them for assisted dying rather than compassionate treatment, and we are seeing this time and time again. This scenario undermines the very fabric of mental health care, turning hospitals and therapists’ offices from sanctuaries of healing into environments potentially perceived as threats.

Beneath the surface, this debate is marred by an alarming economic incentive. Promoting MAID as an acceptable choice for mental illness is conveniently become a cost-saving measure for overwhelmed healthcare systems and governmental budgets by the liberal government.

Providing comprehensive mental health support, including therapy, long-term care, psychiatric assistance, and social programs, requires substantial investment, an investment the Canadian government is unwilling to make. Although they seem to have no issue making that investment on illegal immigrants who don’t pay taxes, lining the CBC’s pockets, and helping any country besides it own. MAID, by contrast, is inexpensive and expedient. Allowing individuals struggling with mental illness to access MAID has become a financially attractive alternative to addressing underlying systemic and societal shortcomings.

This hidden economic agenda is morally reprehensible, sacrificing human dignity and life at the altar of fiscal expediency, but at this point no one is surprised.

The language used in Maclean’s and similar articles often subtly manipulates public opinion, masking a morally and ethically complex issue behind words like "compassion," "dignity," and "choice." But true compassion would emphasize support, care, and recovery—not present suicide as a rational option.

Macleans is no longer rational journalism and frankly hasn’t been for some time. It’s now bought and paid for suicide porn for the sick, unwell and sad.

Postliberalism and tariffs

It is important to emphasize first that the problem has nothing essentially to do with any dogmatic opposition to tariffs as such, much less with any general commitment to libertarian economics.  I am happy to acknowledge that tariffs can sometimes be a good idea, and my own approach to these issues is postliberal rather than libertarian or classical liberal (or “neoliberal,” “market fundamentalist,” or any of the other epithets being flung about in recent days). 

But neither postliberalism nor the fact that tariffs can sometimes be a good idea entails that they are always a good idea, or that the particular draconian tariff regime announced last week is a good idea.  This is not a matter that can be settled a priori by appeal to abstract principle.  It requires a judgement of prudence that takes account of myriad concrete and contingent circumstances.  Several thinkers representative of postliberalism or allied traditions of thought have affirmed that tariffs are of limited value and sometimes best avoided.  For example, the twentieth-century theologian Johannes Messner, a prominent exponent of Catholic Social Teaching, wrote:

[The] bilateral system [features] differential tariff agreements on the basis of reciprocity.  Its various forms are based on methods of protectionism, of safeguarding the individual national economy by measures to restrict imports.  The means employed to restrict imports [include] prohibitive tariffs… As was shown in the period between the wars… this entails a minimum of international economic cooperation, and nations have paid dearly for it by severe economic losses and chronic mass unemployment.  (Social Ethics, p. 952)

The Catholic distributist Hilaire Belloc, while defending protectionist tariff policy, nevertheless judges that “the argument in favour of Protection applies to particular cases only, and turns entirely upon whether an undeveloped part of the energies of the community can be turned into new channels or not” (Economics for Helen, p. 126).

Similarly, the contemporary postliberal political scientist Patrick Deneen, commenting in his 2023 book Regime Change on Trump’s predilection for tariffs, wrote:

Tariffs, however, are generally crude instruments, often used as much or more for domestic political advantage than true enhancements to national competitiveness.  Where necessary, tariffs can prevent dumping and counteract advantages that foreign manufacturers receive from public funding.  However, they should generally be a policy of last resort, focused especially on protecting national manufacture of essential goods such as pharmaceuticals and basic materials. (p. 179)

In response to Trump’s suggestion that tariffs might some day replace the income tax, postliberal journalist Sohrab Ahmari has written:

Replacing tax revenue with tariffs today isn’t workable, given the hugely expanded size and scope of the government.  And jacking up tariffs high enough to cover the cost would discourage most nations from trading with the US in the first place, thus creating a drastic revenue shortfall.

In a Newsweek article that appeared during the 2024 presidential campaign, postliberal economist Philip Pilkington, while agreeing with Trump that trade imbalances are a serious issue, doubted “whether increased tariffs and protectionism are the best way to deal with these imbalances.”  There are, he wrote, two problems with this approach:

The first is that it overestimates what protectionism can accomplish… Tariffs may well help protect domestic industries, but some in American policy circles seem convinced that imposing tariffs will also lead to a spontaneous regrowth of industries lost to globalization.  Many such industries are highly complex and require skills, know-how, transport infrastructure, and other inputs that take years – maybe even decades – to nurture and develop.  If the American government imposes tariffs on key sectors and American businesses have a hard time substituting the goods targeted by the tariffs, the result will simply be a sharp uptick in the price of the goods.

This leads us to the second problem.  The Trump campaign has signaled a desire to aggressively cut taxes, especially income taxes.  Such cuts would drastically boost the spending power of the average American consumer.  Yet if, at the same time, the government is restricting access to cheap foreign goods with higher tariffs, too much money will be chasing too few goods.  This is a recipe for inflation – perhaps very high inflation.

It is worth noting that the contemporary writers just mentioned are known for sympathizing with much of Trump’s agenda.  Naturally, none of this entails that a postliberal could not favor Trump’s tariff proposal, and some postliberals appear to do so.  The point is that there is nothing in postliberalism in itself that entails either accepting or rejecting it. 

But I’d add this caveat.  The “order” part of a postliberal order is no less essential than the “postliberal” part.  And the trouble is that, whatever one thinks in the abstract of a policy like Trump’s, its actual execution tends to chaos rather than order.

The trouble with the Trump tariffs

There are three basic sets of problems with Trump’s tariff plan, which concern its timing, conception, and execution.  Let’s consider each in turn.

1. Timing

The country has been battered by inflation for four years now.  Polls show that high prices were the primary concern both of Trump’s base and of the swing voters without whom he could not have won the recent election.  Trump made this a key campaign issue, pledging: “Starting on Day 1, we will end inflation and make America affordable again.”  Yet it is widely acknowledged, even among defenders of Trump’s tariffs, that they are likely to drive prices up even higher.  They have also driven the stock market down dramatically, with retirees dependent on 401(k) accounts being the hardest hit.  The result is that consumers will have to pay even more than the high prices they are already facing, with less money available to do so.

Even if the tariffs were otherwise defensible, it is clear that this would not be the time to impose them.  Politically, it is likely to be a disaster for Republicans, who will surely lose control of Congress next year if prices remain high.  But more importantly, it is simply unjust to impose greater economic hardship on a public that has already had enough of it, and to whom relief was promised – especially for the sake of a radical policy that is far from sure to achieve its goal, and even lacks a well-defined goal in the first place.

2. Conception

That brings us to the second problem.  As many critics have noted, despite the economic risks any bold tariff policy is bound to have, the new tariff regime is both draconian and poorly thought out.  Over 100 countries are targeted by the tariffs, some of which are very steep. 

But there seems to be no serious rationale for many of the specific amounts decided upon.  It appears that the administration’s basic formula not only does not make much economic sense, but has not even been applied correctly by the administration itself.  The policy focuses on trade imbalances, but a trade imbalance is not by itself necessarily harmful.  For example, a very poor country is bound to buy less from the wealthy United States than the U.S. buys from it.  But this no more entails that the U.S. is getting “screwed” by the poor country than the fact that a rich man buys more from a poor shopkeeper than the latter buys from the former entails that the shopkeeper is “screwing” the rich man.  Yet tiny Lesotho is being hit with a 50% tariff that will inflict vastly more economic damage on its people than any “harm” Lesotho could ever be imagined to have inflicted on the U.S.

Furthermore, Israel agreed prior to the announcement of the plan to drop all tariffs on U.S. goods, but was hit with a new tariff anyway.  The Taliban in Afghanistan got hit with a new tariff too, but a smaller one.  Russia faces no new tariffs, but Ukraine does.  Among others who face them are several small islands, including one we do not trade with and two that are uninhabited.  In some cases, the new tariffs conflict with existing trade agreements.

According to some explanations of the tariffs, they are meant as a short-term negotiating tactic.  According to others, they are intended to be permanent.  Naturally, the uncertainty this entails makes rational economic decision-making difficult, which is one reason the stock market has taken such a big hit.  It is also said that tariffs will yield great revenue for the U.S. government, allowing it to cut taxes and thereby relieve consumers hit with price increases.  But the more draconian a tariff regime is, the less trade there will be, which entails that the revenue the U.S. might in theory enjoy from tariffs will not be what it in fact collects.  Obviously, if you charge people 10% or 25% or 50% more for what you are selling, it doesn’t follow that you will actually make that much more money, because many potential buyers will simply decide not to buy.

It is said that the tariffs will bring back lost manufacturing jobs.  But a tariff cannot by itself do that.  If an industry already exists, protectionist policies like tariffs can shield it from foreign competition.  But if the industry no longer exists, a tariff won’t necessarily bring it back to life, any more than putting a bulletproof vest on a corpse will resuscitate it.  To be sure, the tariff may be among the conditions that make it easier for the industry to revive.  But other conditions (such as the relevant infrastructure and skilled labor) need to be put in place as well, and even when this is possible it can take many years.  There is also the fact that a tariff that on the surface appears to help American manufacturers can in fact hurt them.  If the product a U.S. manufacturer makes requires components that have to be imported from outside the U.S., then a tariff on those foreign components will drive costs up.  And there may be no domestic supplier that can replace the foreign one.

Lurking in the background of any draconian tariff proposal is, of course, memory of the notorious Smoot-Hawley Tariff Act, which is widely held to have deepened the Great Depression.  (It is an example of what Messner had in mind in the quote above, when he notes the grave economic damage that protectionist policies can inflict.)  While even a policy as extreme as Trump’s need not have such a dire outcome, many economists are worried that it will at least lead to a recession.

None of this entails that there is no serious case for tariffs of any kind.  That’s not the point.  The point is that a tariff policy as ambitious and risky as Trump’s should be thought out extremely carefully, and this one is instead haphazard and reckless.  Many Trump defenders will dismiss such concerns on ad hominem grounds, as the sort of thing dogmatic free marketers would want us to believe.  This is as silly as dismissing an argument in favor of a certain tariff simply on the grounds that it was given by a socialist.  Though as it happens, socialists no less than free marketers sometimes argue against particular tariffs, as, again, some postliberals do.  As I’ve said, the advisability of any particular tariff proposal does not stand or fall with one’s general philosophical or economic point of view.  In any event, what matters is whether an argument or an objection is correct or not, not who raised it.  This should be obvious, but in our hyper-partisan era, reminders of basic points of logic are constantly necessary.

Defenders of the tariff policy also routinely appeal to what has happened to the Rust Belt, and the benefits of restoring U.S. manufacturing jobs and capacities that have been lost.  But this fallaciously supposes that because the end or goal of a tariff policy is good, it follows that the policy itself must be a good means to achieve it.  This is as silly as arguing that communism must be good and achievable, because those who favor it have the good motive of helping poor and working people.  It also fails to consider other possible means to the ends the tariff policy is said to be motivated by.  For example, Deneen suggests in Regime Change that the U.S. manufacturing base can be bolstered without heavy reliance on tariffs, by government spending to support infrastructure, research and development, and relevant education.  And in the article linked to above, Pilkington proposes, in place of tariffs, new rules governing international trade.

3. Execution

As to the execution of the tariff policy, there are two basic problems.  The first is the intellectually and morally unserious manner in which it has been done.  Concerns like the ones I’ve set out are waved away rather than answered.  Trump dismisses those worried about the policy as “weak and stupid.”  The stock market dive and prospect of higher prices are dismissed as irrelevant by the same people who once pointed to the health of the stock market as evidence of the soundness of Trump’s policies, and to high prices as evidence of Biden’s incompetence.  Trump defenders who, twenty minutes ago, were proclaiming that he would liberate us from hard economic times are now calling on Americans to embrace austerity.

This is a grave failure of statesmanship.  Ordinary people, including many working class and elderly people who voted for Trump, are watching their retirement accounts shrink and already high prices looking to get higher, and are understandably frightened.  It is cruel to dismiss their concerns and smugly urge them to toughen up and tighten their belts, especially after having promised them immediate economic relief.  On top of that, this attitude only adds to the fear of looming disaster, because it reinforces the impression that the architects and advocates of the policy are driven by cold ideological fanaticism rather than good sense and concern for the common good.

And again, a rational economy needs predictability, and the stability that predictability presupposes.  But the manner in which Trump’s policy is being executed, no less than its actual content, undermines economic stability.

The second problem with the execution of Trump’s tariff policy concerns its dubious legality.  It is Congress, rather than the president, that has primary authority over tariff policy, and it is implausible to suppose that it has delegated to him authority to impose a tariff policy as draconian as the one announced.  It is also risible to pretend that we face some “emergency” that licenses such action, given that the purported emergency is merely the continuation of an economic order that has persisted for decades and through periods of high prosperity, including the period during his first term that Trump takes credit for.  What we seem to have here is a textbook case of the demagogic manufacture of an “emergency” to rationalize the acquisition of extraconstitutional power. 

It is also part of an alarming trend on Trump’s part toward ever more grandiose and indeed unhinged actions and statements.  This began at least as early as his absurd insistence in 2021 that Vice President Mike Pence had the constitutional authority to set aside the electoral votes of states Trump claims were stolen from him in the 2020 election.  It includes his recent bizarre obsession with annexing Canada; his insistence that Greenland too must be taken over by the U.S., possibly even by military force; his mad scheme to take ownership of the intractable Israel-Palestine conflict and forcibly relocate millions of Gazans; and his flirtation with seeking a third term, despite this being manifestly contrary to the constitution.  These are not the sorts of moves one would expect of a wise statesman motivated by concern for the common good.  But they are perfectly consistent with what one would expect of a prideful and vainglorious man whose cult of personality has blinded him to normal standards of decency and reasonableness.  Any reader of Plato and Aristotle will also recognize in them the marks of the sort of demagogue who tends to arise in the late stages of a democracy. 

It is possible that Trump’s arrogance will lead him to persist with his tariff policy no matter how destructive it may end up being, under the delusion that it simply must work in the long run, no matter how long or deeply the country has to suffer.  It is also perfectly possible that his sense of what is needed for self-preservation will lead him to change course.  If it does, we can expect him and his most ardent followers to declare vindication, as they always do no matter what the outcome.  But if the market recovers and a recession is avoided, that will not magically remove the grave defects with the plan and its execution that I’ve been describing here.  If I accidentally fire a gun in your direction but miss, it doesn’t mean that I didn’t put your life at risk, much less that I did something you should thank me for.

 This is Saint Anne’s Richmond Hill, original church in 2020:

You can watch this Mass as a Facebook video for the Third Week of Lent, March 18, 2020 HERE.

God’s Chosen People at Work with America’s Help

https://x.com/nada_chehade_/status/1907923803608592595 

The US Cannot Stop Interfering in the Affairs of Other Countries

https://www.globalresearch.ca/us-pressures-milei-break-china/5883782