The Curse of Economic Nationalism | Thomas J. DiLorenzo

this class I gave gave the topic of the curse of economic nationalism and I've taught an online meeseeks Academy course so a couple years ago on on this tough topic things I've ever written a good bit about it but there's a so some of you who have read some of my writings know that one of the things I try to do is study economic history and then draw lessons for today from from history you know but it's not unique with me of course you know the old saying those who fail to learn the lessons of history are doomed to repeat its failures you know is probably thousands of years old that not that idea and so that's that's what I'm doing here and this is particularly relevant I think because the topic economic nationalism well would they is it first of all but this is an article from the Breitbart website which is the of the main proton I think in the world probably and now you know it's a you know his right-hand man Steve Benin was the ranat until he joined the government and this is an article but there's a guy who writes for them in by a pseudonym named virgil guess he thinks pretty highly of himself and he to them that's his picture there on the lower left-hand side and in this one says this is about a speech that President Trump made in Kentucky a couple of months ago because in March and they said the Trump connects to the taproot of American economic and nationalism with Henry Clay's American system Henry Clay was from Kentucky he's a Kia he ran a slave plantation that grew hemp in Kentucky he was known as the Prince of hemp in his time and he once said you know any of you know he became the Speaker of the House of Representatives senator Secretary of War you know quite the big shot in American politics in 19th century and he once said that the reason he got into politics was that he wanted to impose protectionist tariffs on foreign hemp and he wanted to give her taxpayers to pay for roads and canals so he could ship his hemp to the markets in the east and so he was an honest politician and that was and so you know I'm working on a book on him you know Gary North has been bugging me for years because I wrote a book on Hamilton and then a blinkin is sort of the political son of Hamilton and but in the middle there is Henry claims sort of the the connecting link ideologically between between two of them and so and so here's President Trump saying that this you know his agenda is economic nationalism and they're writing about it in Breitbart I've sent a book proposal to a regular not too long ago to write a book about this and they've turned me down they said it wouldn't have the popular appeal of my last book but it's the whole Trump agenda so they they they apparently thought the whole Trump agenda I would not have any appeal to the public the public producer so uh so I'm going to publish it elsewhere anyway but this article you know what it says about this I'll read a few things about it the 45th president Trump name-checked claim no less than seven times in his speech and use the phrase American system three times so he his speech writers and probably Bannon knew all about this this stuff trumpism says is in fact an agenda deeply informed by the best traditions of American history it was the American system that built up this country giving us widespread prosperity and also crucially the material muscle we needed to win the wars we had to fight I know when's the last time we want a war anyway what wars are they talking to Civil War I don't know the factory is envisioned by Clay were truly the Arsenal's of democracy I don't think he ever envisioned factories with that and then he says the up it's fair to say that the American system was the dominant economic school of thought in the US until the 1970s then over the next few decades it was disastrously pulled down and today we see the consequences all around us and that's all false by the way and I'll explain why and so this this American system you know what is it I mentioned it briefly in my other talk yesterday yeah it's the phrase that's a coin by Alexander Hamilton and and and I described that yesterday in my talk I'll repeat this quote again from Murray Rothbard because he really nailed it it wasn't when he studied early America and he first ran across this American system language by reading Hamilton and here's here's what Murray Rothbard said in his book the mystery of banking Hamilton and his his political compatriots were up to they wanted quotes quoting Murray Rothbard to reimpose in the new United States a system of mercantilism and big government similar to that in Great Britain against which the colonists had rebelled the object was to have a strong central government particularly a strong president or King as chief executive built up by high taxes and heavy public debt a strong government was to impose high tariffs to subsidize domestic manufacturers develop a big Navy to open up and subsidize foreign markets for American exports and launched a massive system of internal Public Works in short the United States was to have a British system without Great Britain and this was called mercantilism at the time and a rough definition of mercantilism is a set of policies that benefits producers at the expense of consumers protectionism would be a perfect example mercantilism and if you ever study the history of economic thought as I did I had three courses in it in graduate school and you know mercantilism was you know it's something one of them more foolish ideas an old history of economic thought but it's a synonym for the American system and so when you see article like this you know like in the Breitbart claiming that the Trump economic policy will bring us back to the glory days of mercantilism it's like like 18th century corruption is what we want and so so Hamilton's so that was Hamilton's American system of protectionist tariffs what do we today call corporate welfare for a road building Canal building eventually it became railroad building in the US and had a National Bank a National Bank to to provide cheap credit for politically connected businesses and to inflate the economy and also a big public debt that was that was a part of Hamilton's original American system a large public debt okay and to to persuade people of this you know mercantilism the people who defended mercantilism in England and other parts of Europe they had to hire publicists for this they had to bamboozle the public into thinking that special interest policies that rip off the public for the benefit of a small group we're really in the best interest of the public so they had the they had to pull the pull the wool over the people's eyes and they did that in various ways and in America one of the masters of that was Hamilton himself and and and one of the techniques he used was which was not original with him is to describe all these policies as in the public interest and I used the public interest in many ways there's a political scientist named Cecilia Kenyon who wrote an article once in the American Political Science Review called the the conservative Russo I think it is about Hamilton as a conservative Oh Rizzo of the right that's the one was we so of the right and in it she put together a big long list of the various synonyms that Hamilton used in his writings for the public interest and in various writings where he tried to convince people that say protectionist tariffs or the granting of a monopoly to a particular politically connected business we're really in the public interest to do that and now I read you some of the language he used in his action writings the public good the public can't reduce the public wheel public safety the public welfare of the public felicity the public happiness the general good the general interest the common interest of national interest the national happiness the welfare of the community the true interests of a community the permanent welfare of society the good of the whole community common interest of humanity and so so if you if you get ripped off by paying two or three times the price for the next pair of shoes you have to buy that's for the good of humanity according to the mercantilists and you know if you repeat language like that enough a lot of people will believe it in that so that's one of the oldest tricks in the book and it come it comes from jean-jacques Rousseau he really French philosopher that's really argued that there is such a thing as the public will and but only a small elite knows what this well is in it and they therefore have the right to oppose that will on everybody and so so in many ways the Hamilton and his cronies were they were the real jacobins in American politics not pant not the Jeffersonians and so so the the Bank of the United States story that was the linchpin of economic nationalism as a national bank to fund to fund this and we did get a National Bank Hamilton succeeded and I was the first plank of the American system and here's what Roth Martin said about the Bank of the United States in his book history of money and banking in the United States as soon as it was created 1791 the Bank United States promptly fulfilled its inflationary potential by issuing million of dollars and paper money and demand deposits peer meeting on top of two million dollars in specie a gold and silver the bank invested heavily in loans to the United States government in addition to two million dollars invested in the assumption of pre-existing long-term debt assumed by the new federal government the Bank engaged in massive temporary lending to the government which reached 6.2 million by 1796 the result of the outpouring of credit and paper money by the new bank of the United States was an increase in prices of 72 percent in five years so it created pretty much massive inflation price inflation immediately as soon as we created it and as I said my talk yesterday the the first Bank United States had a 20-year Charter and it created so much inflation and economic stability and corruption that it was not renewed after 20 years but then the war of 1812 came they renewed it again and in 18 January of 1817 it went back into business and it promptly created the panic of 1819 that was of course Roth Mart has written about pretty pretty extensive it was his doctoral dissertation on the panic of 1818 19 and then the bank you know so it was quite the calamity I mean keep in mind these are the things that you know the advocates of the economic nationalism are saying you know what this is what we need we need Henry to have this this today we need to bring this back today and so so the bank was resurrected and it was it was killed again by Andrew Jackson in India in the late 1820s early 30s and I mentioned yesterday some of the statements Jackson made and in vetoing the bank and I didn't tell you all of them but here's here's one description that Andrew Jackson said about the this Bank of the United States he called it a monster a Hydra headed monster equipped with horns hooves and a tail so dangerous that it impaired the morals of our people corrupted our statesmen and threatened our Liberty it brought up members of Congress bought up members of Congress by that doesn't subvert of the electoral process and sought to destroy our Republican institutions that's a pretty good reason for vetoing the rich are turning on the bank I would think and so you don't hear politicians talk like that anymore unfortunately about about the Fed is it so this is a precursor of the Fed that is he's condemning with this kind of language and then you know John Marshall was a protege of Hamilton's he worshiped Hamilton a lot of John Marshall's legal opinions were literally verbatim of some of Hamilton's writings literal word-for-word and some of them and when John Marshall issued the opinion his opinion personal opinion that the bank the United States was constitutional well back in those days in America not everyone thought of the Supreme Court as black robe deities as the voices of God and they did always pay attention to it they pretty much said okay thanks for your opinion now get lost sometimes and here's what this jackson's version of that he says to this conclusion that is the conclusion of the bank the united states is constitutional i cannot have sent Congress and a president as well as the court must each for itself be guided by its own opinion of a constitution so he's saying we have three branches of government well one it went alone just you mr. marshall who are you it is as much the duty of the House of Representatives of the Senate of a president to decide upon the constitutionality of any bill or resolution which may be presented the opinion of the judges has no more authority over Congress than the opinion of Congress has over the judges and on that point the president is independent of both the authority of the Supreme Court must not therefore be permitted to control the Congress or the executive but to have only such influence as a force of their reasoning may deserve and so back in those days it was assumed by a lot of people that yeah we have three branches of government in United States and five government lawyers with lifetime tenure should not be responsible for defining everybody's liberties in the inner country in fact the old Jeffersonians warned that they'd ever come would all live under a tyranny and the court who we've had that system in this country for at least 150 years now as far as that goes and so so we did destroy the bank and it went out of business and we didn't have another central bank until 1913 but we had something also insidious in the 1860s the national currency acts which I'll talk about a little bit the second plank of Hamilton's American system was crony capitalism what today we call crony capitalism is a great free book downstairs on crony capitalism he should be you should pick up it's a very interesting topic and in Hamilton wrote this this famous series of reports to the government very long-winded reports one was called a report on manufacturers where he made the case for what will we today call crony capitalism in those days they called it internal improvement subsidies no euphemism for money from mercantilism basically and here's where he made the famous infant industries argument that he said this you know some new industries of their infants and they need support by the government they they can't they can't compete against the British or the French the Spaniards who have already developed industries and various things and for a long time for in some cases for decades so they need help they need to be subsidized and of course the standard response by most economists is that the history of this is that the infants never grow up you know once once you put them on the dole they're always on a dull the steel industry for example has been subsidized with protectionist tariffs of or in other forms of protection from competition from the very beginning from the early early 19th century its invent its inception and and you know you fast forward a couple hundred years 150 years anyway and one of the first things the Bush administration did was to put 35% tariffs on steel and so it's still an infant industry $0.35 era this was the George W Bush administration and so you know some infant infant industries never do grow up and and of course when while Hamilton was saying that there were American industries that's especially shipping that were growing like crazy and doing very well without any subsidies whatsoever and we're overtaking some of the some of the European industries in terms of competition in terms of global competition and so they were proving him wrong as he wrote this this thing but this has been you know a case that has been made yet to this day we still hear examples of this as far as that goes he made the case for free the free rider problem he articulated free rider problem to justify government subsidies to build roads and canals and that was later used to build for railroads and again at the same time you know private corporations were building thousands of miles of private roads in America in the first decade or two of the 19th century and what you know while he was making this argument this was all going on he hadn't he had to know that and I think anyway and it was Hamilton also a part of this was the idea that the government should should choose which industries to to subsidize and which not to subsidize picking winners and losers in the language of gambling I guess is what you would call here and the basic problem that always exists with this is there's a public choice problem and then there's a knowledge problem to use a language of Hayek the Knollys problem because of course you know how can politicians who have no financial stake in a particularly the growth of a particular industry be relied upon to pick which industries should be subsidized and which should not it's one thing for investors to put their money behind what they think is a promising new industry because if they if they guess wrong they personally lose their money if they're right they make a profit so you've got the incentives in the right place anyway it doesn't guarantee they're always going to be right but that's the right incentive whereas if government when you have politicians doing this if they're wrong it's no sweat off their back there's no penalty at all for being wrong because it's not your money and if you're right well yeah you know you don't really win out and except you don't get anything an exceptional income yourself anyway if you if you're right you just you just give campaign contributions from subsidized businesses or industries and that's about it and so so that's and that's one one problem with that and then the public choice problem is of course is that if you put politicians in charge of subsidizing what they think are the industries of the future the industry is what will determine how they spend the money is is politics it's them were they how it will earn them the most votes and campaign contributions and that's not necessarily the same as the industries it will serve the consumers the best as far as that goes and when I talk about this with students I asked them if the US government were to start massively subsidizing the computer industry back in the 1970s at the beginning of the computer revolution you know there'd be personal commercial computer revolution anyway and it had some options of who to subsidize IBM so you could give money to IBM that would be a safe safe place to put money choice number two would be a computer company that exists in the disk congressional district of the chairman of the House Ways and Means Committee that's another company or a bunch of bearded long-haired 20-somethings tinkering with computers in Bill Gates's father's garage in California who do you think the US Congress would give the subsidies to now these are the people who founded Microsoft in Bill Gates's father's garage and that money would go to IBM and the company in it own mother that's in cahoots with a chairman of the House Ways and Means Committee and and if you want to see something funny by the way Google a picture of Microsoft founders you'll see a picture of Bill Gates it looks like it looks like the cast of the movie Revenge of the Nerds you know Bill Gates look like he's about 5 years old and in a picture but I use that in a classroom to talk about how how competition is always pervasive and ongoing and even mighty IBM was toppled by these guys and you look at him it look like a bunch of kids you know and in the 1970s it's a funny-looking picture now I think it is anyway it's probably some of the although all of our faculty here probably look just like that at the same time that time and so that's a problem it's always been a problem with that and if you read the this the report of manufacturers one of the interesting aspects about this is that the historians that typically say that it was Jefferson who was sort of the economic ignorance Hamilton's nemesis he well he was in favor of agriculture he wanted America to be a bunch of farmers and what does he know about industry but that's unequivocally untrue was Jefferson who was very widely educated in economics you know one of the names up here I don't know if it's in this room or downstairs Turgot they give French different origin yes right there it's right in front of me there goes right there he's a you know he was a French physiocrats you know free market precursors to the Austrian school and he was the leader of that he was also the French finance minister and he was a personal friend of Thomas Jefferson if you were to walk into Monticello this afternoon it's a Jefferson's home in Virginia you walk in and right here above your head is the big marble busts of Tragos right there there was Jefferson himself put there and he translated into English his writings his free market economics writings Hamilton on your hand all he knew nothing about his bow before on Cherno writes that when he got the job as Treasury secretary George Washington told him I didn't know you knew anything about finance we never talked about finance and and so he read a dictionary write a dictionary of economics that Senator Timothy Pickering had given him to sort of learn some of the lingo of economics and then he wrote a big long letter to the richest man in America Robert Morris who got him who hired him as his sort of political plant in the administration of George Washington to help get the Bank of the United States started and things like that but it was him he it was Hamilton who was the ignoramus on economics if you read his report on manufacturers if you read The Wealth of Nations or understood the ideas in Adam Smith's Wealth of Nations published in 1776 there's no evidence of it in there in there at all because he sort of thought he had this idea that economic development could not take place unless it was guided by a very visible hand such as his his his hand and so he didn't buy into that at all that's how he can make all these these arguments infant industry heart medicine and so forth and on trade he was especially bad on trade he was also big that was a third plank of the American system protectionism tariffs and some of the arguments that he makes and it's this report work that he thinks said that trade barriers such as high tariffs will actually cause lower prices to consumers so we should push a block off all imports and he said because if we do that then the internal competition will become more intense that you know the American businesses competing these are become more intense and prices will fall well that's contrary to all world history for one thing there's not logical you know if the competitive pressure is lessened but you're going to have less price cutting a lot more he also made the argument that transportation costs or a waste therefore we should prohibit anything that has to be shipped from England or France or anywhere like that if we can make it here we should only allow imports of things which we cannot grow or make here like coffee if we can't grow coffee in America then we can import coffee but otherwise nothing because transportation costs are a waste and that sort of contradicts the idea that the founders put into place when they advocate it via the Commerce Clause of the Constitution where they gave the federal the right to to regulate interstate commerce because the history books tell you that one of the things they talked about was they wanted to encourage free trade between the states but of course that involves transportation cause if you if you ship something from Alabama to Georgia Island and so should we ban that we ban it totally flat contradiction and so insert another thing he said he just ignored the effect on consumer this was a classic mercantilist polemic the report on manufacturers because it is almost a hundred percent ignores the effects on consumers of the higher prices it would be caused by all of this and they also advocated at banning illegal banning of exports of goods that could be used in manufacturing by foreigners so if the British are making certain type of textiles in competition with American textile manufacturers or clothing manufacturers we should not ship cotton to to England if they can use the cotton to make textiles and ship in the United States then he said and of course what what that would do is that just American businesses will just lose up to foreign businesses who would ship that that's things to England so that they could use to make to make these products it's sort of like the futility of sanctions you know that we sometimes impose or the Cuban embargo the embargo on Cuba of American traders whether you know dozens of other countries around the world are free to trade with Cuba and so all that does is deprived of American businesses and Cuban consumers with the things that they could have bought from American businesses but but they they can buy the same things or get the same things from other countries and so these are things of it that these arguments for protection have been repeated endlessly over the decades Abraham Lincoln made all the exact same arguments for protection he was you know as I said he was the political son of Hamilton who carried forth the mantle of the American system and his system his of administration and he especially repeated many times the argument about transportation cost we shouldn't allow any imports in because the transportation costs will add a cost to to to the good and of course that you know that's not even necessarily true all the time because because of competition you know the other if somebody in another country can produce something 50% cheaper than Americans can so what there's a tiny transportation cost involved was still so achiever than than the American company can over here and so so you go through this and Henry Clay became the the carrier of the flame after Hamilton died and I in a duel with the Aaron Burr I got an applause yesterday when I said that when Aaron Burr shot him dead and as some of those students that I told story of Gary North once told me that he once started a Hamel a Aaron Burr Society and they made baseball caps and said not soon enough on the back of it come out he had a little pistol on the side and a lot soon enough with their logo as far as that goes and so he carried this mantle through it had no success you know president after President vetoed internal improvement subsidies the Bank of the United States was destroyed and and put America had pretty much free trade by the eve of this American Civil War the average tariff rate was 15% 1/5 in in the late 1850s and that's the closest of free trade United States ever was in the 19th century right on the eve of the Civil War and then the one when the Republicans came in they immediately increased the average tariff rate from 15 to 45 percent and it remained it 45 50 percent or even higher until the income tax that was enacted in the year 1913 so the the ascendancy of the Republican Party first with Lincoln and then with a whole the caste of criminals after after the the protectionism was the trade policy the United States very high tariff rates okay and that so when Lincoln himself decided to run for pub for political office he made speeches proclaiming that Henry Clay was he called him the Beau ideal of a statesman and he once said that all of his ideas Lincoln's all of his ideas about politics came from Henry Clay and here's what he said when he first ran for political office is Abe Lincoln he said he said I presume you all know who I am I am humble Abraham Lincoln you know you know a politician is lying when it calls himself humble no matter who matter who it is you also know he's lying when he says this I'm continuing with the quote I have been solicited by many friends to become a candidate for the legislature my politics are short and sweet like the old woman's dance I am in favor of a National Bank in favor of the internal improvement system and a high protective tariffs period that's what Abraham Lincoln said was his why he was getting into politics so he was the Whig party at the time was the party of the wealthy and apple and a politically connected of the north of New York Philadelphia Chicago the railroad corporation of the banking industry that was the Whig party of the north there are southern Whigs that were somewhat different but those are the northern Whigs and that's who I blinkin hooked his yeah and you hook in with is connected himself with these people and a few more aspect quotations here as to assume what Henry Clay was all about and Lincoln you know just slavishly praising Henry Clay and saying I'm just like him I you know I want to run for political office to carry forward the Henry Clay's agenda which was Hamilton's agenda there's a book by Edgar Lee masters on Lincoln called Lincoln the man in Lincoln the man Edgar Lee masters was Clarence Darrow his law partner famous via the monkeys Scopes Monkey Trial monkey case in in 19th early 20th century and which HL Mencken reported on very hilariously and he was a famous playwright also but he wrote this about clay in this book is that Henry Clay was the champion of that political system which doles favours to the strong in order to win and keep their adherence to the government his system offered shelter to devious schemes and corrupt enterprises he was the beloved son figuratively speaking of course of Alexander Hamilton with his corrupt funding schemes his superstitions concerning the advantage of a public debt and a people taxed to make profits for enterprises that cannot stand alone his example and his doctrine has led to the creation of a party that had no platform to announce because its principles were plunder and nothing else so if you're what you're about in politics is plunder you better keep your platform to yourself don't announce it if that's what you're about and so so that's what we're into when we get the Hamilton Clay Lincoln American system cemented into place finally during the American Civil War and we had a we have some trial runs of this in America in the 1830s and 1840s where state governments started funding internal improvements and this was the first big push in the direction of of actually achieving this American system and it turned out to be such a debacle all over the United States that by the time you get to the American Civil War 1861 every state except for Massachusetts had amended its constitution to prohibit the use of tax dollars to go to any corporation for any reason because they had all had such horrible experiences with money going to corporations to build roads and things and I'll give you one example this is Abraham Lincoln's personal secretaries in the White House George Nicolay and John Hay after his death they wrote a book about Lincoln and in that they describe what happened when Lincoln was a leader of the Whig party and the Illinois legislature and he got 11 million dollars allocated to build roads and canals in Illinois he thought they they could turn Illinois into New York he wanted to be the empire state of the Midwest and here's what Nikola and Hayes said the market was glutted with Illinois bonds one banker and one broker after another - whose bonds they had been recklessly confided in New York and London failed or made away with a proceeds of the sales the system had utterly failed there was nothing to do but repeal it stop work on the visionary roads and endeavor to invent some means of paying the enormous debt and they go on to write that not a single road or canal was completed and all that money some of it was stolen it was just one big inefficient mess what else would you expect by getting politicians of power money to spend yeah they're not experts in a road building and that's what happened in state after state and so so it became a quite a debacle and Lincoln was personally responsible for this this was the 1830s but they never gave up on this at a time when you get to 1840 my favorite president in all of American history and Lou Rockwell's William Henry Harrison was elected president he's our favorite because he died in one month in office not of pneumonia alas so he could have done much damage so he has to be the best highly ranked most highly ranked president all these rankings of presidents I don't see how he couldn't be number one and all of them no matter what but he died and then a member of the Whig party was vice president John Tyler and so hey yeah and so Henry Clay thought he was in high cotton as they say down south that they're finally gonna get a rammed through protectionist tariffs on national bank and corporate welfare gone wild it turns out John Tyler was a Jeffersonian and he vetoed everything and so they they kicked him out of the Whig party they burned him in effigy in front of a white house and and and and they didn't they'd had no success he vetoed everything protectionist tariffs corporate welfare and so forth and so that's this is why by the way if you read the book regarding Rushmore by Ivan elands it's a good book that ranks American presidents on the basis of how faithful they were into enforcing the Constitution in a way that would limit government that's his criteria it's not who kills the most people and spend the most money that's the history profession that's their criterion and guess who came out number one in the book REE carving Rushmore in light well not my favorite will inventor Harrison but John Tyler no no of course hardly anyone has ever heard of and but he turns out to be number one so that didn't go on but once Lincoln came in in that India the main opposition was always from the south southerners and so once they seceded well then you know the cost if you will secession was there to America one of the cost was well the Republican Party now had a monopoly in the government and they put all this security the national currency axonal legal tender acts created nationalized the money supply the protectionist tariffs rate went to 45 or 50 percent stayed that way for sixty years and and they started massively subsidizing the railroads and and that of course led to one of the most famous cases of political corruption on the credit mobility a scandal of the grant administration's which is also inevitable they want to learn anything about this quiz though it was the name of a company could eaten a billy a company and in my writings you know I write about there was a man named James J Hill has anybody heard of James J Hill Weaver James oh you've read my book okay yeah well the government massively subsidized the railroads this is an interesting story there's a book called Lincoln in the railroads it was written in the early 20th century of a reprinted I have a copy of it and it talks about how in 1857 Abe Lincoln was offered the job of General Counsel of the New York Central Railroad because he was a famous wealthy rail roaded lobbyist and attorney at the time from if I'm really represent all the Midwest Chicago railroad companies and he turned it down because he had just invested in land in Council Bluffs Iowa of all places big bunch of land in Council Bluffs Iowa and when he became president one of the first things he did even though the war was on if neither the Battle of first Manassas was being fought he called Congress back not to discuss the Battle of first Manassas which his army lost but to just to get the Pacific rail Railroad bill going start subsidizing the building of a railroad to California from the American Midwest that was the priority after all he was a railroad lawyer is a railroad attorney and a lobbyist the railroad Corporation has got him elected along with the banking the bankers and the manufacturers and protectionists of the north that's what politicians do you get an office you got to pay back the people who put you there that's why they that's why you're there and so so and in this law he made sure that the president got the right to decide where they would start building the Transcontinental Railroad anybody want to guess where they started building the Transcontinental Railroad the eastern terminus Council Bluffs Iowa yes of course to this day it's called Lincoln's Hill and at that a part of Council Bluffs Iowa so I must admit that's why he turned down this big time job the general counsel of the new york central offered him by Erastus Corning was that he was apparently made a killing there if you have you know it were to go to Springfield little Lloyd this afternoon Abe Lincoln's home and visit his home at the Museum now it's on a part of town that's called old aristocracy row and his house is the biggest house and old aristocracy Row and where he lived before he became president there there and so so that's that's what you know some things never change do they and you know it's pretty much the same as today if you look at the end the Goldman Sachs guy who becomes Treasury secretary lives in the biggest house in Manhattan or wherever something like that but James J Hill in the 1870s built a Transcontinental during the Great Northern without a penny and government aid and proved that it was not necessary investors capitalized the whole thing he paid he paid the Indians for rights away across their land with livestock money or whatever they could trade for he found the shortest routes across the country whereas the government subsidized railroads was all political so here you have absolve you of my quick map of the United States or Thanksgiving turkey whatever you want together let's say they started here here's Council Bluffs over there James J Hill you know he's a capitalist and he has private investors in investing in this he has to make money as to minimize his cost and maximize his traffic so he found the shortest route through the rocky mountain was to the west coast not just something like that like that and he became the most profitable the most efficiently built in the most profitable railroad the Great Northern the government no here's the government railroads there's look more like this because because of the politics of it because every member of Congress even the representatives in the territories were not yet Congress said you'll get our support but you have to run a line to our town there was no vote for me and so they had to run all these lines all over the place and go go hundreds of miles per maybe one person to ride the train every six months because that's the cost of getting my vote and then when they built it you read the book by Burton Folsom on entrepreneurs versus the state they did things like they built railroad tracks on the top of ice packs in Iraq and the Rockies in the early winter when it was still you know not so cold that you couldn't work and they build the tracks and springtime came and the ice melted attracts wood this uh just collapsed but that was all good because they had a per mile subsidy from the government so the more miles of track you build the more profit you make and so you know who cares of the tracks collapse in the spring it's all it's all good for me but a real capitalist like James Yale would never think of doing anything like that and so of course this was a later version of the disasters at the state level that I described earlier they did the same kind of thing that's that's the incentives if governments have when you put them in charge of building something that's that's what bureaucracies do okay and then finally you know we had the national currency acts I want to read you a few things about the importance of the national currency accidents of the other the other plank of the American system and I want to read you what some of the advocates of these things were saying here's what Senator John Sherman who was the chairman of the Senate Finance Committee in during the Lincoln years said he was the brother of General Sherman is it from Ohio and when they passed the national currency Act he was praising at me saying this he said the our purpose he says is quote to nationalize as much as possible even the currency so as to make men love their country before their states all private interests all local interests all banking interests the interests of individuals everything should be subordinate now to the interests of the government and that's what Senator John Sherman the chairman of the Senate Finance Committee said was the purpose of the National of nationalizing the money supply in America a Democrat named Bob who was an opponent of this named Lazarus Powell took the opposite position the Kentucky Democrat and he says this the result of this course of banking legislation is utterly to destroy all the rights of the states it is asserting a power which have carried out to his logical result would enable the National Congress to destroy every institution of the states and cause all power to be consolidated and concentrated here in Washington and so the Republicans would hear that and say yeah right on that's exactly that's that's what we wanted the whole purpose of all this and so if you fast forward even further in my book on a Moulton called Hamilton's curse one of the chapters is called the Hamilton Hamiltonian Revolution of 1913 when we've got the Fed the income tax in the 17th amendment at the same time the 17th amendment called for the direct election of senators well what was the importance of the income tax and the Fed is that the central government now has unlimited money if they have a conscription law when Abe Lincoln was president they couldn't afford to run down the The Runaways the people who went AWOL from military they didn't have the money to hire all the police that could chase them down but when you have an income tax and I've the ability to print money like a Fed you can afford anything you know you if some guy in Iraq leaves the army because you could hunt him down again a hundred people to go ahead and down in Iraq you know let alone the mountains of Pennsylvania which is where a lot of the Union Army soldiers hid out after they abandoned the army and so so that's what they're talking about they understood that the central government will become have monopolistic power and then and many orders of magnitude more power than it previously had if it could get its claws and all that money that nationalizing when the currency would do even without a Fed even without a central bank they were they were very happy about this and so so that's why I you know I started out talking about you know this article in Breitbart praising the American system and if you read the whole article this was in March of this year they claimed you know it's a bad thing that we abandoned this this this thing but I think the opposite is true well my book on Hamilton came out my Random House was my publisher and they wrote a great press release they have really talented people to work for a company like that it is very persuasive that that the Hamilton was sort of the evil genius who's responsible for the crash of O age they David because you know after all the fed he was Ben Bernanke himself once called him the founding father of central banking in America and so they brought me on the Morning Joe television show and sat me down next to Patrick J Buchanan and the first thing you can and says to me is Pat as Alexander Hamilton is my hero and so I knew is gonna be a bad day after that so they pretty much shot on me down and didn't but I did so books because I put my book on the TV screen and sold some books and there were four people kind of shouting at me and I just sat there and saying what's the use you know but I had in my mind I'm going to get the last word and I did right before they went to a commercial maybe kind of shut up and they said okay let's give him ten seconds to respond to all this and and all I could think of saying was that at least at least Aaron Burr had a good reason for shooting someone unlike Dick Cheney and and that was the end that's the only thing it's on YouTube where you can look it up it's kind of a force but that but that's August our time is up and that's it for now [Applause]

Channel: misesmedia

Views: 5,877

Rating: 4.8317757 out of 5

Keywords:

Id: Bx99tNEFjDI

Length: 49min 9sec (2949 seconds)

Published: Tue Aug 15 2017

Reddit Comments

[u/Vectoor]

Mises institute? In MY /r/neoliberal?

[u/SirWinstonC]

obviously a globalist cuck

/s