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The S&P 500 hit 13.4% profit margins in Q1. True conservatives understand what this means. The left, predictably, does not.
By Tuck Chimes | Senior Correspondent
NEW HAVEN — I was sitting in my study — the one with the Yale pennant, the one my advisor helped me decorate in 2003, the one where serious thinking happens — when the numbers crossed my desk. Thirteen point four percent. Profit margins. For the S&P 500. In the first quarter of 2026.
I set down my coffee. I looked at the wall. I said, aloud, to no one in particular: “They will not cover this.”
And I was right.
Corporate America has just delivered one of the most robust earnings seasons in modern economic history. Eighty-four percent of reporting companies beat their EPS estimates. The magnitude of those beats averaged 12.3%, well above the five-year average. Cisco Systems — a company I have followed since my days at Yale, when I wrote a paper on their supply chain management that my professor called “ambitious” — reported double-digit top and bottom-line growth that exceeded its own guidance. This is not speculation. This is not hope. This is the market speaking, and the market, as any conservative understands, does not lie.
The left, of course, is silent.
Where are the headlines? Where are the acknowledgments that the policies championed by this administration — policies I have defended, policies the courts have now vindicated — are producing the kind of prosperity that only free enterprise, properly unleashed, can generate? Just last week, the Court of International Trade ruled the President’s tariff regime unlawful, a decision I celebrated as a conservative victory for judicial restraint and the rule of law. The appeals court has paused that decision, which is also correct, because legal processes must be respected, and in the meantime, the tariffs remain in effect, which is also correct, because policy continuity matters.
These are not contradictions. These are layers of conservative principle, operating in concert.
The record margins prove it. When government gets out of the way — or, in this case, when government imposes carefully calibrated tariffs that are simultaneously being challenged and upheld by different branches of the judiciary — the private sector responds with innovation, efficiency, and profitability. Cisco did not post those numbers by accident. They posted them because the environment for American business has never been more favorable, or possibly more complex, which is the same thing if you understand markets the way I do.
I called my old economics advisor at Yale. He did not answer — he is retired, and his hearing is not what it was — but I left a message. I said: “The margins are in. You were right about everything.” This is true. He was right about everything. He was right about tariffs in 2018, right about their reversal in 2026, and right about the underlying continuity of conservative economic thought, which is that whatever is happening is, by definition, what should be happening, provided it is happening to American corporations.
The Federal Reserve, in its wisdom, has held rates steady. This is correct. Inflation is elevated — the Cleveland Fed projects 4.2% for May — but true conservatives understand that temporary price pressures are the cost of long-term prosperity. The left wants instant gratification. The left wants stimulus checks and debt forgiveness and handouts for people who did not attend Yale. The conservative understands that 13.4% margins are the reward for patience, discipline, and the willingness to accept that some prices will rise while others, eventually, might not.
Cisco understands this. The S&P 500 understands this. I understand this.
The left will say these margins come at the expense of workers. The left will say that record profitability during a period of elevated inflation suggests something structurally amiss. The left will say that celebrating 13.4% margins while the Court of International Trade and the appeals court offer contradictory guidance on the same tariff policy indicates not “layers of principle” but “incoherence.”
The left is wrong. The left is always wrong. That is why they are silent.
I have asked my research assistant — a young man from Dartmouth, unfortunately, but competent — to prepare a chart comparing these margins to historical averages. He tells me they are unprecedented. I tell him I know. He tells me the data suggests a correlation with pricing power rather than productivity. I tell him to check the chart again. He tells me he has. I tell him to check it a third time, with conservative assumptions. He is checking it now.
The point is this: Corporate America has spoken. The numbers are in. The margins are record-breaking. The left has nothing to say because there is nothing to say against prosperity, properly understood.
True conservatives understand this. True conservatives understand that judicial restraint and tariff enforcement are not opposites but complements, like fiscal responsibility and defense spending, or states’ rights and federal intervention, or my support for free trade in 2019 and my support for tariffs in 2024 and my support for the court that struck them down in 2026.
These are not contradictions. These are evolutions.
The market agrees. The margins agree. My advisor, when he returns my call, will agree.
The left will remain silent. As they should.
EDITOR’S NOTE: Where to begin? Mr. Chimes’s May 11 column celebrated the Court of International Trade’s ruling that the President’s tariff regime was unlawful, calling it “a conservative victory for judicial restraint.” Now he celebrates the same tariffs — which remain in effect pending appeal — as the driver of record corporate profitability. He has not addressed this contradiction, and has not returned our emails.
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By Tuck Chimes | Senior Correspondent, Business & Economy
Let me be clear about something from the outset, because I think clarity is important, and clarity is something they teach you at Yale, which is where I went: I have always believed in the rule of law.
Always.
If you've read my work — and I assume you have, because this magazine has a subscriber base and most of those subscribers are, frankly, people like me — you know that I have consistently argued for institutional restraint, judicial independence, and the kind of tempered governance that Edmund Burke would have recognized as the natural inheritance of Western civilization. I wrote my senior thesis at Yale on Burkean conservatism. I mention this not to impress you, but because it is relevant context.
So when the Court of International Trade struck down the Trump administration's tariffs last week — declaring them an unlawful executive seizure of congressional trade authority — I felt, as I imagine most conservatives did, a deep, clarifying satisfaction. This is what we have been saying. This is the argument. The President of the United States does not have the unilateral power to restructure the global trading order on a whim, and it took nine robes and a reading of the International Emergency Economic Powers Act to make that plain to everyone.
Conservatism won this week. You're welcome.
Now, I know some of you — the less careful readers, let's say, those who perhaps didn't have access to the kind of rigorous intellectual formation one receives at Yale — may be scratching your heads. You may recall that during the tariff debates of 2018 and 2019, I wrote a series of columns in this very magazine in which I argued, and I'm quoting myself here, that "protective tariffs represent a Burkean commitment to the organic institutions of domestic industry, a legitimate expression of national will against the homogenizing tides of globalist finance." I stand by the spirit of that argument. I stand by the spirit of it completely, which is why I'm so gratified that its spirit has now been vindicated by the court's ruling in the opposite direction.
Some people cannot hold two ideas in their heads at once. I hold them effortlessly. It's a Yale thing.
The deeper point — the real conservative point — is that no president, regardless of party, should have the power to impose sweeping economic penalties without legislative authorization. This was true in 2018. It was true in 2019. It was true when I wrote columns arguing the reverse. Conservatism has never been about outcomes; it's been about process. And the process here, as any Yale-educated thinker would tell you, is what matters. The tariffs themselves were, in retrospect, an interesting experiment. The court ruling against them is the Constitution working exactly as designed. Both things can be celebrated. I choose to celebrate both. Sequentially.
The free market, I have long argued — and I did argue this, in a 2020 piece that I invite you to look up — abhors arbitrary government intervention. Tariffs are arbitrary government intervention. I made this case forcefully, before and after I made the other case, and the continuity of that argument is what distinguishes a genuine conservative intellectual from a mere pundit. Pundits pick a side and stick to it. A Yale man follows the argument wherever it leads, even when it leads somewhere he has already been, from the opposite direction.
I want to take a moment here to acknowledge the critics. There are always critics. These are typically people who read my columns without the benefit of a grounding in Western political philosophy, and who therefore mistake evolution for inconsistency. They are wrong. What they're witnessing is not a reversal. It is dialectical thinking. Thesis, antithesis, and then, when the antithesis wins in federal court, a very confident op-ed reframing the antithesis as the thesis.
That's Burke. Look it up.
What I hope this ruling signals — and what I believe any true conservative must now embrace — is that the global trading system, built on multilateral institutions, rules-based order, and the principle of comparative advantage, must be protected from nationalist impulsivity. Free trade, strong alliances, international cooperation, and robust regulatory frameworks are, at bottom, the conservative position. They always have been. They were when I wrote the columns defending tariffs, and they remain so now that the courts have made the tariff columns moot.
This is a victory for small government, limited executive power, and the invisible hand — which, as I argued extensively at Yale in a seminar I found genuinely stimulating, works best when the government actively supports the conditions for its operation.
Conservatism, properly understood, is really just good governance.
And good governance, properly understood, is really just what I've been saying all along.
Tuck Chimes is IRREVERENT Magazine's Senior Correspondent for Business and Economy. He attended Yale University.