Obama’s National Emergency Powers
As financial markets struggle with repeated failures by our central planners in ‘managing’ the crisis in the Eurozone, a recent statement by President Barack Obama is worth highlighting. On September 13, 2011, in a speech addressing criticism of his jobs plan, Obama stated in part:
“I get fed up with that kind of game plan, and we’ve been seen it for too long. Too long. We’re in a national emergency.”
Granted, this has been the worst recession, and worst jobs recovery from a recession, since the Great Depression. But a national emergency? Are we talking nuclear attacks, poison in the water supply, or a new and unstoppable infectious disease?
What is a ‘national emergency,’ anyway? Might those words carry legal meaning?
In fact, they do, and speaking of the Great Depression and financial markets, well, history matters.
When Obama was giving his speech back in early September, the flare-up in the crisis in the Eurozone was just getting started. Stock prices for large financial services firms in the US exposed to their counterparts in Europe were falling anew, while the CBOE “VIX” index (a volatility index, also called the ‘market fear index’) was spiking sharply higher. Money market funds in the US were also exposed, with European investments comprising a surprisingly large share of their assets.
Was this financial backdrop one component of Obama’s ‘national emergency?’ Correlation is not necessarily causation, the saying goes in econometrics. In other words, it could have just been a coincidence.
But it is worth recognizing as well the tinderbox underneath that phase. There is a very important area of constitutional law called ‘national emergency powers.’ The area deals with assertions of extraordinary Presidential and executive branch authority during a crisis, including any formally declared state of national emergency or a ‘time of war.’ Read more













