“We’re breeding black swans in Washington, D.C.” — Anthony Danaher, Guild Investment
“When Washington sleeps, the economy grows.” — William Rees-Mogg (“Maxims of Wall Street,” p. 147)
Special Announcement: I have a new website! Check it out at http://www.americaseconomist.us, in honor of my designation as “America’s #1 Economist” at last year’s Las Vegas MoneyShow.
See my latest press release: Dr. Mark Skousen, “America’s Economist,” Says Trump’s Trade War Fuels Inflation: Gold Shines in 2025
President Donald Trump is making history with his blitzkrieg signing of executive orders. He may surpass Franklin Delano Roosevelt in the first 100 days of office.
On day one, Trump signed 26 executive orders, compared to 17 by Joe Biden in 2021.
Biden signed 60 executive orders in his first 100 days. Trump has already signed 46 and is on his way to a record.
Is this a dangerous precedent for our republic? MAGA supporters say no, it needed to be done to reverse the disastrous Biden era; critics say yes, it’s a threat to democracy.
Who Has the Authority to Levy New Taxes?
Our two-century-old Constitution is famous for its checks and balances between the three branches of government (legislature, judiciary and executive).
But Congress recognized that certain “national emergencies” require fast action and thus gave the President authority to issue “executive orders.”
Today, those orders are being aggressively used and abused as never before, and Congress is letting the President do it. The gyrations on Wall Street reflect investor concerns.
For example, Article 1, Section 8, of the Constitution assigns Congress the power to “levy and collect taxes, duties, imposts and excises.”
The power to tax is the power to destroy, as Chief Justice John Marshall warned in 1819. That’s why the taxing authority needs to go through Capitol Hill.
Yet the executive in the White House is now using this taxing power to impose 10% to 25% tariffs on China, Canada and Mexico without Congressional approval, based on the loosest interpretation of a “national emergency.” In the past, “national emergency” meant wartime measures, but now any excuse will do.
Trump as ‘Benevolent Dictator’?
The amended Constitution also limits the Presidency to two four-year terms to avoid excessive dictatorial power by the executive branch after FDR famously was reelected four times.
It’s pretty clear that Trump feels limited only by the Constitution and the veto power of Congress and the Supreme Court. Like Theodore Roosevelt, he’s carrying a big stick and using it.
He’s aggressively using executive orders as never before, such as his latest decision to abolish the Department of Education, which Republican presidents have promised to do since Ronald Reagan, but could never get Congress to agree.
I say “benevolent” in the sense that Trump is on the right track when it comes to getting rid of woke culture in government, climate change extremism, weaponizing the FBI and Department of Justice and returning decisions on education back to the states. He also supports free speech.
The Threat of Protectionism
The big exception is his protective tariffs, which are a tax imposed on American businesses and consumers. Most economists of all political stripes oppose tariffs. Insiders say that Trump’s trade war is a negotiation technique, and I’m all for it if it means lower tariffs at the end.
Otherwise, it means more price inflation and disruption of all important supply chains. See my Skousen CAFÉ column here: Trump’s Disaster Plan: Raising Taxes! – Mark Skousen.
I recommend you watch this video interview with John Stossel on the five myths of trade and globalization. It’s only seven minutes long.
Protectionism Destroyed Argentina
I thought of what Trump is doing to the United States when I read this on page 56 of Rainer Zitelmann’s new book, “The Origins of Poverty and Wealth” about Argentina. Available here.
Zitelmann is a big fan of FreedomFest and will be speaking about his book this June. Details below.
He explains why Argentina stagnated in the 20th century:
“Trade was increasingly regulated and Argentina relied more and more on protectionism — industrialization through import substitution was the watchword. ‘Protectionism was one of the main sources of our country’s economic decline,’ says Professor Ivan Carrino (U of Buenos Aires).”
Fortunately, Javier Milei is turning things around in Argentina by loosening trade, not tightening it.
Milei’s policies of cutting regulations and expanding trade have worked. Argentina had the best performing country stock market fund last year, doubling in value. We still recommend it.
Let’s hope Trump’s tariffs are only a short-term plan to negotiate lower trade barriers for all of us!
As Ben Franklin wisely observed, “No nation was ever ruined by trade; even seemingly, the most disadvantageous.”
Warning About Excessive Power and ‘Men of Strong Passions’
Did the Founding Fathers anticipate the development of dictatorial powers by the President with executive orders?
On June 2, 1787, Benjamin Franklin addressed the Constitutional Convention and warned:
“There are two passions which have a powerful influence in the affairs of men, ambition and avarice, the love of power and the love of money… And of what kind of men will strive for this profitable pre-eminence, thro’ all the bustle of cabal, the heat of contention, the infinite mutual abuse of parties, tearing to pieces the best of characters? It will not be the wise and moderate, the lovers of peace and good order, the men fittest for the trust. It will be the bold and the violent, the men of strong passions and indefatigable activity in their selfish pursuits. These will trust themselves to this government and be their rules… I am apprehensive, therefore, perhaps too apprehensive, that the government of these states may in future times end in a monarchy, and a king will the sooner be set over us.” (emphasis added)
After the Convention ended, Franklin expressed overall optimism about the future of the young American nation. As he gazed at the back of President George Washington’s chair, he wondered if the half sun on it was a rising or setting sun, and decided it was a rising sun. He wrote, “America will, with God’s blessing, become a great and happy country.”
As he walked out of Independence Hall, a lady asked Franklin what kind of government had been created. He replied, “A republic, if you can keep it.”
Words to live by.
Upcoming Conferences: Meet America’s #1 Economist!
This Saturday, Feb. 8, San Diego AAI Meeting: I’ll be speaking at the American Association of Individual Investors (AAII) on “The Great Rotation: What Investments Will Do Well in the Trump Era, and What to Avoid,” followed by an autograph session of my book “The Maxims of Wall Street.” Meeting is from 9-11 a.m. at the Good Samaritan Episcopal Church, 4321 Eastgate Mall, in San Diego. Chapter website is here. It’s free to my subscribers, but please RSVP by emailing Thomas Jones at joneste1977@gmail.com.
Las Vegas Money Show, February 17-19, Paris Resort: Last year, the MoneyShow honored me with “America’s #1 Economist” award (see photo).
Kim Githler presents Mark Skousen with “America’s #1 Economist” award in 2024.
I return to give the keynote speech, “Trumponomics: The Winners and Losers,” plus workshops on “Bears Make Headlines, Bulls Make Money: My Five Most Important Lessons from the Maxims of Wall Street,” followed by “The Lazyman’s Way to Riches: My Five Favorite “Buy-and-Hold” Stocks and Funds to Beat the Market in 2025 and Beyond.” Join me and Ed Yardini, Keith Fitz-Gerald, Ralph Acampora and Robert Helms. Register at www.moneyshow.com.
FreedomFest, June 11-14, Palm Springs Convention Center, California: Several hundred people responded to our “super early bird” discount last month. We are on our way to over 2,000 attendees at Palm Springs!
I mentioned historian Rainer Zitelmann above, who wrote me the following: “Yesterday I signed up two more people for FreedomFest. They are from a university where they study the libertarian movement, so I told the professor that FreedomFest is the best place for anyone who wants to understand this movement.”
Rainer has been to FreedomFest twice and will be speaking at this year’s conference on his new book (highly recommended) “The Origins of Power and Wealth: My World Tour and Insights from the Global Libertarian Movement” (Management Books, 2025), which includes several chapters on FreedomFest. “I had an incredible time at FreedomFest and consider it a great honor to speak there.”
Over the weekend, I spoke at the Liberty United conference in Utah, run by Jake Oaks. He said, “FreedomFest is the best networking conference I’ve ever attended, a unique opportunity to meet top speakers like Steve Forbes and Ice-T and representatives of freedom organizations from around the world.”
Our “early bird” discount is now available for only $450 per person, $400 for guests at www.freedomfest.com. Use code EagleEB. Sign up today!
Good investing, AEIOU,
Mark Skousen
You Blew it!
Is New York City the Pothole Capital of the World?
By Mark Skousen
New York City Mayor Eric Adams seems to be proud of the fact that the city filled pothole number 500,000 in three years. See Pothole No. 500,000 Has Been Filled – The New York Times.
Having lived in New York for over 20 years, and having traveled the world, I consider New York City the “pothole capital of the world.” It’s neverending… potholes everywhere. I’ve written letters to the New York City mayors, but nothing has improved, whether Republican or Democrat. They blame it on the winter months.
Several years ago, I asked one of my Chapman students who was from Germany, “Do you know what a pothole is?”
He responded, “Sorry, Professor, but I’m not familiar with that term.”
That’s because, in my travels to Europe, it was almost impossible to find a pothole on the roads in Germany; they are so well built to last. Unlike the New Yorkers, the Germans don’t give out road contracts to the lowest bidder every year. On the famous Autobahn, the roadbed and pavement surface are typically 75 cm in depth. This is deeper than in other countries and ensures greater longevity of the pavement and higher resistance to warping and cracking in cold weather.
However, Germany has apparently changed for the worse since Angela Merkel took over as chancellor in 2006. Rainer Zitelmann wrote to me, “A lot has changed for the worse in the last 10 or 15 years. The infrastructure in Germany is falling apart, and that now includes many potholes, watch this Berlin video.”
