Guest Post: How Has the Official State of Emergency in Continuous Effect from 2001 to the Present Affected the Economy and Business?

A reader asked whether the U.S. is still in an official state of emergency, and if so, what that means.

The answer is yes, we are still in a state of emergency.


On September 11, 2001, the government declared a state of emergency. That declared state of emergency was formally put in writing on 9/14/2001:

“A national emergency exists by reason of the terrorist attacks at the World Trade Center, New York, New York, and the Pentagon, and the continuing and immediate threat of further attacks on the United States.
NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, by virtue of the authority vested in me as President by the Constitution and the laws of the United States, I hereby declare that the national emergency has existed since September 11, 2001 . . . .”

That declared state of emergency has continued in full force and effect from 9/11 [throughout the Bush administration] to the present.

On September 10 2009, President Obama continued the state of emergency:

The terrorist threat that led to the declaration on September 14, 2001, of a national emergency continues. For this reason, I have determined that it is necessary to continue in effect after September 14, 2009, the national emergency with respect to the terrorist threat.

Does a State of Emergency Really Mean Anything?

Does a state of emergency really mean anything?

Yes, it does:

The Washington Times wrote on September 18, 2001:

“Simply by proclaiming a national emergency on Friday, President Bush activated some 500 dormant legal provisions, including those allowing him to impose censorship and martial law.”

Is the Times correct? Well, it is clear that pre-9/11 declarations of national emergency have authorized martial law. For example, as summarized by a former fellow for the Hoover Institution and the National Science Foundation, and the recipient of numerous awards, including the Gary Schlarbaum Award for Lifetime Defense of Liberty, Thomas Szasz Award for Outstanding Contributions to the Cause of Civil Liberties, Lysander Spooner Award for Advancing the Literature of Liberty and Templeton Honor Rolls Award on Education in a Free Society:

In 1973, the Senate created a Special Committee on the Termination of the National Emergency (subsequently redesignated the Special Committee on National Emergencies and Delegated Emergency Powers) to investigate the matter and to propose reforms. Ascertaining the continued existence of four presidential declarations of national emergency, the Special Committee (U.S. Senate 1973, p. iii) reported:

“These proclamations give force to 470 provisions of Federal law. . . . taken together, [they] confer enough authority to rule the country without reference to normal constitutional processes. Under the powers delegated by these statutes, the President may: seize property; organize and control the means of production; seize commodities; assign military forces abroad; institute martial law; seize and control all transportation and communications; regulate the operation of private enterprise; restrict travel; and, in a plethora of particular ways, control the lives of all American citizens.”

(Most or all of the emergency powers referred to by the above-quoted 1973 Senate report were revoked in the late 1970’s by 50 U.S.C. Section 1601. However, presidents have made numerous declarations of emergency since then, and the declarations made by President Bush in September 2001 are still in effect).

It is also clear that the White House has kept substantial information concerning its presidential proclamations and directives hidden from Congress. For example, according to Steven Aftergood of the Federation of American Scientists Project on Government Secrecy:

Of the 54 National Security Presidential Directives issued by the [George W.] Bush Administration to date, the titles of only about half have been publicly identified. There is descriptive material or actual text in the public domain for only about a third. In other words, there are dozens of undisclosed Presidential directives that define U.S. national security policy and task government agencies, but whose substance is unknown either to the public or, as a rule, to Congress.”

As former United States congressman Dan Hamburg wrote in October:

While … Congress and the judiciary, as well as public opinion, “can restrain the executive regarding emergency powers,” nothing of the sort has occurred.Under the 1976 National Emergencies Act (50 U.S.C. 1601-1651), Congress is required to review presidentially declared emergencies. Specifically, “not later than six months after a national emergency is declared, and not later than the end of each six-month period thereafter that such emergency continues, each House of Congress shall meet to consider a vote on a joint resolution to determine whether that emergency shall be terminated.” Over the past eight years, Congress has failed to obey its own law, a fact that casts doubt on the legality of the state of emergency.

As far as public opinion is concerned, how many Americans are even aware that a state of emergency even exists. For that matter, how many members of Congress know? …

The Obama administration is essentially arguing that the United States is currently in a state of resisting foreign invasion a full eight years after the attacks of 9/11!

This is ludicrous. [Dr. Harold C. Relyea, a specialist in national government with the Congressional Research Service (CRS) of the Library of Congress] argues that Congress and the judiciary, as “co-equal branches of constitutional government,” serve as a check on the executive power. As we have seen, Congress has either been shut out of this process, or, as in so many cases, it has capitulated. Dr. Relyea then offers that public opinion can restrain the executive. But the public doesn’t even know they’re living under a state of emergency. The media doesn’t report it, and the government is certainly not in the business of providing information that might raise the hackles of real Americans.

It’s time for the American people to rise to this challenge. Write your member of Congress, and your senators. Tell them to obey their own laws. Tell them to end this phony and treacherous state of emergency that imperils the freedom of us all.

Hamburg’s must-read article also discusses the suspension of Possse Comitatus, the operation of Northcom inside the U.S., and the refusal of the Department of Homeland Security to provide information on the state of emergency to Congress or even to Congress members on the Homeland Security committee with the highest security clearances.

The Effect of a State of Emergency on the Economy and Business

The continuous state of emergency in effect from September 2001 to the present may have had a substantial affect on the economy and business.

Initially, as William K. Black – senior regulator during the S&L crisis, professor of Economics and Law, and an expert on white collar financial crime – has repeatedly pointed out, the government knew about an epidemic of mortgage fraud a long time ago. For example, the FBI warned of an “epidemic” of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies putted their agents off of financial fraud investigation and forced them to focus on terrorism instead. See this and this

And as Reuters noted last week:

U.S. securities regulators originally treated the New York Federal Reserve’s bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.

The national security claim may seem outlandish, but it is nothing new.

As Business Week wrote on May 23, 2006:

President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations.

In other words, national security has been discussed for years as a basis of keeping normal accounting and securities-related disclosures secret. While “national security” and a state of “national emergency” may not be exactly the same, they are variations of a single theme – an existential threat to our nation – which has dominated American since September 11.

Similarly, Congressman Brad Sherman, Congressman Paul Kanjorski and Senator James Inhofe all say that the government warned of martial law if Tarp wasn’t passed.

Last year:

  • Senator Leahy said “If we learned anything from 9/11, the biggest mistake is to pass anything they ask for just because it’s an emergency”
  • The New York Times wrote:

    “The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress.”

    Mr. Paulson has argued that the powers he seeks are necessary to chase away the wolf howling at the door: a potentially swift shredding of the American financial system. That would be catastrophic for everyone, he argues, not only banks, but also ordinary Americans who depend on their finances to buy homes and cars, and to pay for college.

    Some are suspicious of Mr. Paulson’s characterizations, finding in his warnings and demands for extraordinary powers a parallel with the way the Bush administration gained authority for the war in Iraq. Then, the White House suggested that mushroom clouds could accompany Congress’s failure to act. This time, it is financial Armageddon supposedly on the doorstep.

    “This is scare tactics to try to do something that’s in the private but not the public interest,” said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. “It’s terrible.”

Most of the Fed and Treasury’s looting of America to funnel trillions in bailouts, loans, guarantees, and other favors to the too big to fails was done under the justification of an “emergency”.

I don’t know whether the official declaration of a “state of emergency” in effect from September 2001 to today was directly used for financial looting. But again, the fear of an existential threat to our country was used to justify the looting.

And many people allege that the government has taken drastic steps to manipulate market prices. If true, the president’s ability to use emergency powers to “stabilize the markets” no doubt makes manipulation easier.

Congress Has the Power to Revoke the State of Emergency

A note to Congressional staffers: Congressman Hamburg is right. Congress does have the power to revoke the state of emergency.

Specifically, the National Emergencies Act, 50 U.S.C. Sections 1601-1651 (passed in 1976), gives Congress the power to countermand a presidential declaration of national emergency. Indeed, in 1976, Congress rescinded all of the declarations of national emergency made since World War II, as many of them had been on the books for years and were giving the executive unrestricted powers which were undermining the Constitution.

In 1983, the Supreme Court struck down a portion of Congress’ power to countermand a declaration of national emergency. But Congress got around that ruling by amending the National Emergencies Act in 1985 to confirm Congress’ power to countermand – through a joint resolution between the House and Senate – a declaration of emergency by the president (see this).

Moreover, in 2007, the Bush Administration tried to ignore the National Emergencies Act by issuing National Security and Homeland Security Presidential Directive 51. But that dog won’t hunt. The Constitution does not allow the president to unilaterally cut Congress out of the picture.

As former Chicago Federal Reserve economist and Senior Morningstar equity analyst William Bergman wrote in 2001:

Lord Acton’s famous saying that ‘power corrupts, and absolute power corrupts absolutely’ provides a valuable warning. In light of the sweeping powers seemingly provided by statutes like 12 U.S.C. 95a and 12 U.S.C. 95(a), those who care about democratic principles and freedom may wish to monitor the implications of these and other laws for government choices before conditions arise giving rise to assertions of emergency authority, in addition to behavior arising amidst an emergency itself. This study could usefully include a renewed assessment of the constitutionality of these and other emergency statutes, as well as more fundamental review of their welfare implications per se, including work along the lines produced for the Senate Special Committee to Terminate the National Emergency in 1973.[i]

[i] See for example Special Committee on the Termination of the National Emergency, “Emergency Powers Statutes: Provisions of Federal Law Now in Effect Delegating to the Executive Extraordinary Authority In Time of National Emergency.” United States Senate Report 93-549; November 19, 1973.

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George Washington is the head writer at Washington’s Blog. A busy professional and former adjunct professor, George’s insatiable curiousity causes him to write on a wide variety of topics, including economics, finance, the environment and politics. For further details, ask Keith Alexander…


  1. john

    Those disgusted by the abdication of our legislature are invited to participate in GOOOH, Get Out Of Our House. This is a non-partisan effort to include citizen selected candidates on the ballot in all 435 congressional districts that binds those candidates to the stated positions of their constituents subject to electronic referendum with those constituents.

    This effort expressly excludes professional politicians and is self funding eliminating all outside money to candidates. It may be a pipe dream, but if we don’t try we have none to blame but ourselves.

  2. RagingDebate

    Yes, the last forty years has been an increase in fear-based politics to pull forward demand and loot:

    1) Global Warming: We’re all going to DIE unless we have $1T of funding to stop global warming!!!
    2) H1N1: We’re all going to DIE unless you run out and buy the anti-virus!
    3) 911: We’re all going to DIE unless you run out and consume.
    4) TARP: We’re all going to DIE unless Congress hands over $700 B without strings or accountability while the authors except themselves from legal ramifications.
    5) Iraq: We’re all going to DIE unless we invade Iraq.
    6) Iran: We’re all going to DIE unless we invade Iran.

    Why didn’t we kill Bin Laden in the 1990’s after the first WTC attack in 1993? How come our intelligence agencies knew about the Christmas bomber and did nothing? How come Defense Secretary Gates “Won’t go there” when a Muslim mows down an unarmed platoon yelling Alah Akbar with an AK-47?

    I can keep going here. The reality is that the U.S. citizen cannot or won’t be ploughed further forward with the stick of fear-based politics. I suppose laziness and theft was at the root of fear-based politics.

    It is much harder to create solutions for a citizenship that provides them the opportunity to benefit rather than whip them forward with the stick.

    1. RagingDebate

      Fear does work for a time and then the proles just don’t care. The opportunity to benefit is reason number one why any person does anything. Fear of loss is reason number two. Of course, when the proles stop caring is when forced labor for dissidents begins.

  3. Cynthia

    Because the war on terror is like the war on drugs in that it’s a war with no end in sight, then this means that our country will remain in a never-ending state of emergency. And if our TBTF banking system and our national security apparatus are being protected under state of emergency laws, then this means that whatever crimes that our banksters and our war criminals have committed will be kept under lock and key and thus immune from prosecution indefinitely.

  4. Blurtman

    Obama continues to be a great disappointment. His latest unbelievable comment regarding the heads of Goldman Sachs and JP Morgan: “I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system.”

    Frankly Mr. President, anyone who enriches themselves by selling fraudulently rated securities around the world on such a massive scale as to cause a depression should not be called “savvy businessmen.” They should be called “inmate.”

    Our government has been co-opted by corporations.

    Obama is a fraud.

  5. Jojo

    When the government stops extending unemployment and cuts back on other social programs in the name of budget discipline, they may well need martial law and the troops to impose order and cleanup the blood in the streets.

  6. dlr

    The latest enormity isn’t getting much publicity.

    Administration officials revealed to Congress that Bush has been targeting American Citizens overseas for execution if OFFICIALS BELIEVE they are terrorists.

    Don’t worry about the lack of a trial by jury or the right to confront their accusers. The official was quick to reassure Congressmen “that there is a review process”. Whew. Just when I was starting to think that rule of law had broken down or something.

    Administration Officials further revealed that the Obama Administration has continued the practice.

    The mind boggles. Thank God we got someone elected who would clean house and restore all of our civil liberties.

    So it is the policy of the United States to assassinate people, US citizens, rather than to go to all the trouble to arrest them and put them on trial, if they are ‘terrorists’.

    I guess all it takes these days to lose your most basic civil rights is to be branded a ‘terrorist’. They don’t even have to prove it in a court of law. All they have to do is decide you are a terrorist. Apparently the crime is so dreadful that merely being accused of it robs you of all civil liberties, including a trial to determine your innocence or guilt.

    One Senator (one!) questioned the activity, and asked to be reassured that people wouldn’t be assassinated just for criticizing the government.

    Astonishingly enough this didn’t make it to the front page anywhere I looked, either on the right or on the left. Obviously anyone who thinks we should have a trial and see if the accused is guilty or not before executing them is soft on terrorism.

    Here’s the link:

  7. Rickstersherpa

    I hate to point this out, but given the hysteria since the XMAS pants on fire bomber and Scott Brown’s election on a pro-torture platform, I think the odds Congress passing a repeal of theState of Emergency is slim and none, and slim has left town. In fact, in the upcoming Palin/Cheney administration, I would not expbe surprised if Congress decides to suspend Habeas Corpus and delcare the whole United States a war zone with authorization for enhanced interrogation techniques.

  8. radicalized

    We are 2 years away from martial law.

    1) By then the economy will collapse as stimulus ends and the Gov’t is out of bullets. Unemployment will continue to climb. It is presently closer to 20% than 17% ( The ensuing riots will give Obama the excuse he needs to declare martial law.

    2) Israel, with the backing of the US, will attack Iran thus widening the war on terror. This will prompt a response from Russia and China, both of whom never have to fire a bullet as they can bankrupt the US on a moments notice by dumping our bonds on the market and refusing to buy more.

    The war on terror didn’t have a lasting effect on the population. People are coming around to the idea that the whole thing is fake. Therefore a new threat has to be created. In this case, one internal, the collapse of the economy, and one external, Iran.

    We are always too slow to react as few of us can believe that this could actually happen here in the US, or Europe for that matter. But 5 years ago, what is happening today would have seemed farcical.

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