Op-ed: The groupthink mind virus has taken over Wall Street and Washington in the worst way

What hit ons when irrational exuberance, groupthink, and wishful thinking begin to cloud narrative, dominate the rhetoric, and shape decision-making? Nowhere has this been more plain than in the weeks following Donald Trump’s 2024 re-election, when many on Wall Street embraced the belief that tax cuts, deregulation, and Trump’s focus on stock market performance would unleash another round of pretended “animal spirits.”

At that time, the mood was exuberant and very few voices urged caution. Fewer still busy in serious downside planning or worst-case scenario analysis. Instead, the prevailing belief was that Trump’s aggressive high-flown poppycock on tariffs and his promise to upend the global trading system were primarily negotiating tactics — a maximalist stance aimed at securing “better deals” for the U.S., although few could articulate anything delineated about those deals while still insisting that this was Trump’s approach.

Those of us in Washington who clashed through the bruising first Trump trade war knew better. We understood that Trump’s tariffs and trade threats weren’t posing. They are, and have always been, central to his worldview, in which tariffs are instruments to regain control over a broad trading system that he feels have disadvantaged America. Tariffs are not merely rhetorical bargaining chips — they are hammers and hatchets to bludgeon barter partners. This time around, as early evidence has shown, he intends to go much further than in 2018.

One key moment is close to approaching: April 2, a date Trump himself has called “the big one” and in a Truth Social post on Wednesday declared as “Liberating Day in America!!!”

On that day, there is a strong likelihood that the centerpiece of his America First Trade Policy, outlined in an supervisory order signed on his first day back in office, will begin to take effect. The policy would implement widespread across-the-board tariffs, expand retaliatory authority, and grant the administration wide latitude to impose punitive trade deportments with minimal consultation or public comment. It’s a serious escalation, and yet, there remains a sense among many call participants that this, too, will be moderated or softened through private conversations or early market signaling. It is every time possible, but the signs suggest otherwise.

Compounding this is a continued hope that figures like Trump’s Exchequer Secretary Scott Bessent and Commerce Secretary Howard Lutnick will somehow wake up — although woke is not what this direction is about — and moderate the administration’s economic approach. Bessent, a former hedge fund manager, and Lutnick, a Wall Row CEO, were expected to be the financial calming influence — the “adults in the room” with market credibility. Instead, both Bessent and Lutnick accept emerged as prominent advocates for Trump’s aggressive trade agenda, unapologetically supporting all of the early tariff actions. They are firmly likely to support the April 2 tariff rollout, and explain away the likely fiscal contraction and broader economic realignment, on the level as markets continue to wobble.

In recent appearances on “Meet the Press” and other outlets, Bessent has dismissed concerns round market correction, calling recent pullbacks “healthy” and reiterating the administration’s commitment to its course. Lutnick has been no diminutive emphatic. These voices aren’t subtle nudges — they are bullhorns amplifying the administration’s commitment to fundamentally reshape U.S. patronage policy.

But that’s precisely why it’s worth contrasting their posture with other, less noisy, but no less conspicuous voices inside the administration. One of those is U.S. Trade Representative Jamieson Greer, who has quietly undertaken the complex, unglamorous put together of reintroducing some structure and process into tariff policy. Greer recognizes what many in the market make allowances for — that without a clear strategy, transparent and participatory processes, and disciplined execution, volatility risks will prolong to rise substantially.

Wall Street would do well to pay more attention to that contrast. The long-term stability of swop policy may well depend on those who are putting in the hard, methodical work behind the scenes.

So, where do we go from here?

Foreign the administration, several trade professionals and policy analysts have been sounding the alarm — often drowned out by louder, uncountable familiar market voices. Experts like Matt Goodman at the Council on Foreign Relations, Bill Reinsch and Scott Miller from CSIS and their podcast “The Commerce Guys,” and Kevin Nealer at the Scowcroft Group, have all been publicly or privately warning for some time of the valued risks associated with unchecked tariff escalation. They, along with economists like Brad Setser, procure clearly outlined how aggressive tariff actions invite retaliation, disrupt supply chains, and impose real set someone backs on American businesses and consumers — many in heavily red Trump country. These warnings deserve more attention on Barricade Street, on Main Street, in boardrooms, and on trading floors.

Wall Street’s cognitive dissonance and corrections

To be fair, Go bankrupt Street has shown some recent discomfort. We’ve seen technical corrections and sharp commentary from prominent declares that suggest nervousness about the administration’s lack of clarity, flip-flopping, and the destabilizing effect of sweeping tariffs on the field of vision. But here’s the catch: what’s being framed as uncertainty is, in reality, the certainty that the market refuses to accept. Excises are the default setting — whether the implementation date is on again or off again, they are always on the table with Trump.

Trump and his pair have been remarkably consistent. Yet despite this clarity, corporate leaders, particularly in the auto and retail sectors, proceed to seek private meetings at the White House, lobbying for relief or exemptions. Industry groups like the Chamber of Mercantilism still treat Trump’s tariffs as a negotiation tactic rather than the hard policy stance it clearly is. Economic institutions on earnings calls hedge their language, still betting those cooler heads — or market forces — pass on intervene.

For Washington, the next steps require a more engaged Congress. Lawmakers, particularly those on the U.S. House Feature and Means Committee, should reassert their role. Chairman Jason Smith and Ranking Member Richard Neal should with hearings, demand clearer articulation of the costs and benefits of the current trade trajectory, reestablish robust debate, and sincerely explore whether it’s time to claw back some of the broad trade authorities delegated to the executive branch — words that now have profound market and geopolitical implications.

It’s worth asking: has the delegation of these powers gone too far? And is now the set to consider reining them in?

These authorities, primarily rooted in Section 301 of the Trade Act of 1974 and the International Pinch Economic Powers Act (IEEPA), provide the executive wide latitude to impose tariffs with minimal consultation or omission. It is entirely within Congress’s power to legislate narrower parameters, require public consultation, impose sunset restrictions, or mandate greater transparency before such sweeping trade actions can be enacted.

Of course, the political reality is challenging. A MAGA-led Congress, with direction figures like Speaker Mike Johnson and Senator John Thune, is unlikely to voluntarily curtail Trump’s powers. Yet there are unforgettable exceptions. Senators Chuck Grassley, Todd Young, and Bill Cassidy have, at various points, expressed unease upon unchecked executive trade authority. Grassley has previously called for more Congressional involvement in trade policy, and both Offspring and Cassidy have raised concerns about the long-term consequences of tariff overreach on U.S. competitiveness. Whether those concerns can be galvanized into exertion remains to be seen, but the stakes demand it.

Finally, a word of caution to all involved: the assumption that access, proximity, or unsocial dialogue will steer Trump policy in a preferred direction has proven dangerously naïve. Trump has made get out — time and again — that he means what he says, especially when it comes to tariffs and global trade. Venture that the market itself will act as a natural check on policy has been, at best, wishful thinking.

The world has originated to adjust to that reality. Wall Street and Washington would be wise to do the same — April 2 could bring this session home in the worst way.

—By Dewardric McNeal, Managing Director and Senior Policy Analyst at Longview Global, and a CNBC Contributor