 If you want to, we can do what we did yesterday and since we're in Wolf Hall, let out a wolf howl to wake up the people downstairs. In case there's anybody still sleeping in the building, we'll have to make that a tradition, Wolf Hall. My topic for this lecture is the Curse of Economic Nationalism. And I've written three or four books about this. Doesn't necessarily mean I'm a big expert on it, but it's one of my interests. And my book, Hamilton's Curse, the reason I chose that title is that, this one here, I might as well put it up there. No, that's not good. The reason I chose that title is there's a book by a business historian, John Steele Gordon, called Hamilton's Blessing. And Alexander Hamilton once said that a large public debt would be a public blessing. And so that's why I chose one. No, I said, no, it's a curse, not a blessing. But Hamilton's, the reason he said that is to give you a little background on what economic nationalism is. And Hamilton is the godfather of so-called economic nationalism in America. And many other countries have copied what he stood for, the ideas, the policies, and so forth. So this is not just an American history thing. But so he's the godfather of the economic nationalism. And so anyway, what I'm going to start with is President Trump, one of the first speeches he made about economics, he chose to go to Louisville, Kentucky to give his big speech on economics. And so his big speech. And what's the speech about? Well, here's one of the things he said in this speech. This was on March 20th, 2017 in Louisville, Kentucky. Henry Clay believed in what he called the American system and proposed tariffs to protect American industry and finance American infrastructure. And so he was there in Louisville because Henry Clay was from Kentucky. Henry Clay was the Speaker of the House of Representatives, a member of Congress, Secretary of War, and he was a well-known politician in the early 19th century. He basically was in politics from, I think, 1911 until he died in 1852. And so Trump, at least one of his speech makers or his economic advisors, apparently convinced him that his economic agenda should be economic nationalism in the spirit of Henry Clay. And I doubt that Trump himself knew anything at all about Henry Clay before that, before somebody told him, hey, let's do this. Let's do this. And so anyway, I want to give you some background. Henry Clay, he's not the father of economic nationalism. It was Hamilton. But after Hamilton died, Henry Clay picked up the mantle. Hamilton died in 1804 in a duel with Aaron Burr. And our friend Gary North once said that he started an Aaron Burr society once and had ball caps. And on the back of the ball cap it said, not soon enough. And Aaron Burr shot Hamilton dead in the duel. So he wasn't a fan of Hamilton. And neither was Murray Rothbard as far as that goes. So what was this economic nationalism? The word itself is deceiving because it implies that if it's nationalism, that everyone in the nation would benefit from this. But actually it's exactly the opposite. It was always a collection of policies that would benefit a very narrow group of special interests at the expense of everybody else. Economic nationalism. And the group of interests, it was really another word for mercantilism. And Murray Rothbard, one of his simple definitions of mercantilism, was a collection of policies that benefits producers at the expense of consumers. That's basically what it was. It was in the 17th, 18th, 19th century in Europe and in parts in the United States eventually. That was mercantilism. And mercantilism is the system that Adam Smith sought to debunk in his famous book, The Wealth of Nations. And the book is a critique of mercantilism which was the prevailing interventionist, corrupt interventionist system of England at the time. And that's why he wrote the book. And here's what Murray Rothbard said about the gang in America, the Hamilton gang. Patrick Newman yesterday mentioned a man named Robert Morris. Robert Morris was the first Treasury Secretary even before they called the job Treasury Secretary. I think they called it superintendent of finance during the American Revolution. And he was one of the wealthiest men in America. He was well connected with the whole the New York, Boston, Philadelphia business class of wealthy people. And he picked Alexander Hamilton as his front man in politics. And here's what Rothbard said was their objective, the objective of the nationalists who were their political party was the Federalist Party. So what they wanted was, and Rothbard says this in his book, The Mystery of Banking, he wanted, quote, 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. The 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 launch a massive system of internal public works. In short, the United States was to have a British system without Great Britain. And then in the next part, Rothbard says an important part of what he called the Morris scheme, as Rothbard called it, was to organize and head a central bank to provide cheap credit and expanded money for himself and his allies. The Bank of North America, which was the first government national bank in the U.S., was deliberately modeled after the Bank of England. And so that was the agenda. It was always the agenda. That was the economic nationalist agenda, protectionism, what we today call corporate welfare, supposedly for road and canal building and then later railroad building when railroads came along, a large public debt and a bank run by politicians to provide cheap credit to politically connected businesses. Not to provide cheap credit to everybody, only your political supporters. You don't want to provide cheap credit to businesses who are going to vote against the opposing party. You're going to provide cheap credit to the businesses that support your party. And that's what it was for. And as far as Hamilton's public blessing, he was very Machiavellian about that. And the reason he gave for this, of a big public debt, was not that we needed to borrow a lot of money to build roads or infrastructure or anything like that. But a public debt for the sake of having a big public debt is what he wanted because he said that the affluent and the wealthy people of the country would own most of the bonds, the government bonds, and therefore they would form a potent lobbying force for bigger government and higher taxes to make sure that there would always be enough money in the Treasury to pay off the principal and interest on their bonds because Hamilton had condemned the U.S. Constitution. He called it a frail and worthless fabric after it was ratified because it didn't make government big enough. It made it bigger and more powerful than the Articles of Confederation, but he wanted it much bigger, much bigger. And so his scheme to make it much bigger outside of the Constitution was public debt, the connection with public debt. And he would spend the rest of his life after the Constitution was ratified thinking of ways to undermine the U.S. Constitution. He's the one who invented the idea of implied powers of the Constitution as opposed to the delegated powers that are actually in the Constitution. It was Hamilton in his debate over the bank with Jefferson who invented that. So that's the genesis of what's known as economic nationalism, where it comes from. And so let me look at some of the elements. I'll give you why I call it a curse, why I call this whole agenda a curse. Let's take a look at the bank. The first bank, government-run bank, was called the Bank of North America. It only lasted about a year or so because it inflated its currency so much and had so little gold reserves behind it that no one trusted the currency. And it just became defunct, it had to be privatized after about a year. And that was Robert Morris, that was his idea, Robert Morris. And Murray Rothbard called Hamilton Morris his young disciple. Well, he's a young disciple. And so Morris failed there and then they turned right around and started lobbying for the same thing basically, but with a different name, the Bank of the United States. And so they succeeded in getting the Bank of the United States. George Washington invited Alexander Hamilton and Thomas Jefferson to both give him their opinions on the constitutionality of the Bank of the United States. Jefferson said it's unconstitutional because it's not in the delegated powers. Hamilton said, if you read between the lines of the Constitution, it is constitutional because there are implied powers. And Jefferson came back and said, I've read between the lines and it's all blank space. He didn't say that exactly, those are my words, but that's pretty much the gist of his argument. But Hamilton relied on the necessary and proper clause of the United States Constitution that says the delegated powers are all listed there. And then it says the government has the power to do what's necessary and proper to execute all these delegated powers. And Hamilton said, well, it's necessary to have a bank run by politicians to do all this. Jefferson came back and said, it's not necessary, it's just convenient. We have banks. The government could put its money, tax money in banks. We don't need a government bank to run it. But anyway, George Washington signed the legislation and the story goes, what really convinced him was not the brilliance of Alexander Hamilton, but what convinced him was he had purchased a lot of land in Virginia near Washington, near what is now Washington, D.C., Mount Vernon. And they were in the process of moving the capital from New York to Virginia to create Washington, D.C. And George Washington said, if you extend the boundary of D.C. over to adjacent to my property in Mount Vernon, I will sign the legislation for your bank. He told the federalists. And so he did. And so he was a big real estate speculator. George Washington was. So we got the first bank of the United States. And the Jeffersonians had been arguing, well, this is going to create price inflation. It's going to corrupt politics. And it did exactly everything they said it would do. It created 72% price inflation in the first five years, just as suspected. And here's what Rothbard said about it, about the first bank of the United States. The bank of the United States promptly fulfilled its inflationary potential by issuing millions of dollars in paper money and demand deposits, pyramiding on top of $2 million in specie, gold and silver. The bank invested heavily in loans to the United States government. In addition to $2 million invested in the assumption of preexisting 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% from 1791 to 1796. So it came into being in 1791. There was a 20-year charter and the United States Congress did not renew the charter because for these reasons it created price inflation. It created boom and bust cycles. And it corrupted politics. Eventually what it would do would give cheap loans to politicians who promised to support the continued funding of the Bank of the United States. Daniel Webster was on the retainer as a lawyer for the Bank of the United States and he threatened to leave and no longer represent the Bank of the United States unless they gave him his retainer and I quote a letter from him in one of my books. And so that's what it was like. But then what happened was the War of 1812 instigated by Henry Clay, he was the main warhawk for the War of 1812. And it's amazing to read when you read this history and you see how the American historians twist and spin history. Henry Clay was one of the main warhawks who wanted the War of 1812. He thought it would be a cakewalk. He said the Kentucky militia alone could take over Canada and they wanted to conquer Canada. They wanted to make Canada a state, an American state. And so blame him for the war, not only him, but him for the war. But then the biographies of Henry Clay at the end of the war, he was a member of the committee that negotiated the treaty with the British and they gave him high praise for being a great compromiser and they gave him the name, the Great Compromiser, because he compromised with the British as part of the committee to end the war. So they don't blame him for starting the war, but they praise him for ending the war. So if you read this history, you've got to keep an eye out for this sort of contradictions here because they're everywhere. It's been my experience in reading these hagiographies of these people. So the Bank of the United States went defunct. But then after the war, the politicians were persuaded to bring it back to monetize the debt to help pay the war debt. So it was brought back into existence with legislation in the year 1816 and came into operation in January of 1817. And who remembers the title of Murray Rothbard's dissertation? The Panic of 1819. So the bank is brought back into existence in January of 1817 and promptly creates the Panic of 1819. Just as the Jeffersonians always said it would. And I'll read you from Rothbard again. Let's see, 68. Here's what Murray said about this. The Bank of the United States precipitated the Panic of 1819, the first economic depression in the new country by a series of deflationary moves which sharply limited and contracted the loans and no-dissues of the bank branches. That was after their inflationary moves when they printed money to monetize the debt. And so he clearly made the connection in his book between the recreation of the Bank of the United States and the Panic of 1819. And he also got to say this was the first time in American history where there was large scale unemployment in the cities. And he points out that like in Philadelphia alone, the number of people employed in small manufacturing went, I think, from 9,500 people to 2,500 people. That's a pretty big decline in employment in one year in the city of Philadelphia during the Panic of 1819. And so it was given another 20-year charter beginning and operating in 1817. So you fast forward to the days when Andrew Jackson becomes president and Andrew Jackson is president and he had a big pitched battle with the Bank of the United States and he ended up not renewing the charter. He vetoed the renewal of the charter of the Bank of the United States even though by that time the Bank of the United States had accumulated all these special interests, all the Hamiltonian interests, the big business interests from New York, Philadelphia and Boston, New England. But he defeated them. He had a lot of help, but he finally defeated them and by vetoing this. And his veto statement, which is online, is quite remarkable. If you read in Murray Rothbard's History of Money and Banking in the United States, one of the students yesterday asked me about Andrew Jackson, what I thought of Andrew Jackson. Well, I want to think of Andrew Jackson. Well, as a young man in the military, he was ordered to murder seminal Indians, so he did that. And then in the military, he was ordered to administer the Trail of Tears, forcing the Cherokee Indians to walk to Oklahoma from North Carolina. And so he was no saint. But I praise him for vetoing the Bank of the United States. It's a good thing that he did. So you don't have to say that Andrew Jackson is my God to praise him. So he did a couple of good things and a lot of bad things that, you know, who among you cannot say that about yourself, you know, as far as that goes. But every time I've written something where I would praise Andrew Jackson for vetoing the Bank, I'd get bombarded with emails, but he killed the seminal Indians. You know, he did all these horrible things. He kicked small children, you know, and all this, you know. So what? So what? But who cares? And of course, all these people who write me have never committed a sin in their lives. They are angels, they're all perfect angels, otherwise known as libertarian purists, who Murray Rothbard did not like, by the way. So anyway, so Jackson did do that. He had to help from the people of Ohio, too. The Bank of the United States opened up two branches in the state of Ohio, and the state of Ohio did not want this bank run by politicians messing with their society and their politics and their economy. So they imposed a $50,000 per year tax per branch. This is in the 1830s on the Bank of the United States, and they refused to pay the tax. And so the governor of Ohio sent armed marshals into the bank vaults and scooped up the money and put it into big chests and carried it off. And so it was not just Andrew Jackson by himself. There were people in the states around the country that did not want this government run bank. They knew it was a menace. So he had a lot of help there. But his statement that I was going to mention, if you read the section of Murray's book on the Monetary History of the United States, has a little section on the Jacksonians. And a student yesterday asked me about Jackson, and I told her, well, for a brief introduction to who the Jacksonians were, read that 10 pages or so in the Monetary History of the United States, because it was the Jacksonians were libertarians, Murray Rothbard said. Not necessarily Jackson himself, but the Jacksonians. And he founded the Democratic Party of the 19th century in the U.S. Okay, so where is Jackson? He's page 72. He said this when he vetoed the Bank of the United States. It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, of wealth cannot be produced by human institutions. Every man is equally entitled to protection by law, but when the laws undertake to add to these natural and just advantages, artificial distinctions, to grant titles, gratuities, exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society who have neither the time nor the means of securing like favors, meaning government favors to themselves, have a right to complain of the injustice of their government. If government would confine itself to equal protection of the law, it would be an unqualified blessing. In the act before me, that is to recharter the Bank of the United States, there seems to be a wide and unnecessary departure from these just principles. So that was a very libertarian statement there, saying that the central bank is a bank that basically grants exclusive privileges to the already rich and powerful at the expense of the rest of the country. And so, and this is why, after I read that years ago, I wondered, well, what does the history profession, the American history profession, think of this? They hate it. They hate it. They call them a country bumpkin, an ignoramus, you know, in all this, they call them names. And for not every single historian, but the ones I looked up, they have sort of the general thinking is this is an awful statement. But I think it's wonderful. I think it's great. I don't even know if Jackson wrote it. You know, they all had speechwriters even back then, but it was a very libertarian statement in vetoing the Bank of the United States. So that's one reason why I think the economic nationalism has always been a curse. That's the first peg of economic nationalism as a central bank. And of course, you've heard a lot more about central banks this week already. The tariff, protectionist tariff. How many of you have ever heard of the infant industry argument for protectionism? Does that ring a bell? Something about, raise your hand. It looks like about maybe about a half, possibly, infant industry. Well, that too came from Alexander Hamilton. He argued that the new industries had to be protected with tariffs or else they would never be able to compete. And so it was called the infant industry argument. And even from his time, the argument against that was that, well, the infant industries never tend to grow up. And that's certainly true of the steel industry. The steel industry was protected almost from the very beginning with tariffs. Certainly during the Civil War, when tariffs went on average of 50 to 60%, they were protected. All throughout the rest of the 19th century, the steel industry was protected. And fast forward to the election of George W. Bush as president, the very first thing he did in terms of economic policy was to impose new tariffs on steel. And so the infant steel industry that came about in the early 19th century is still being protected today. Still being protected today. And so that was Hamilton's baby. And so a part of this cabal, the economic nationalists, of course, they wanted a bank that would provide them with cheap credit. They wanted to be protected from international competition with high tariffs. And in 1824, the year 1824, they thought they were in the catbird seat. They had control of Congress. And they passed a tariff of 1824 that sharply increased tariffs from the 10 or 12% average rate to closer to 40% average rate. So there was a huge average tariff. I mean, some goods had 100% tariff and some had a 2% tariff. But the average, we're talking averages here. And this was the first time where there was a clear separation between North and South in America on economic policy. The votes in the U.S. Congress for the 1824 protectionist tariff. And this was the first really big protectionist tariff in America. 104 votes from the Northern States, three votes in favor from the Southern States. And the Senate, the United States Senate, there were 25 yes votes from Northern States, two from Southern States. And so there was a very clear North-South distinction here. The North being the champions of protectionism. That's where the manufacturing was, what little manufacturing there was in 1824. That's where it was taking place in the North. And the South was an agrarian society. And so they didn't see any benefit. What were the tariffs on? The tariffs were on the manufactured goods imported into America so that the Northern manufacturers would have less competition and can charge higher prices. And the Southerners saw this as, well, what's in it for us? We're paying higher prices for everything. And on top of that, they complained for decades that most of the money, the revenue, was being spent in the North anyway. So they didn't see it as it's very good for them at all. And also, since it was an agricultural society, the basic economics of it is that, of course, everybody would pay. Consumers in Massachusetts would pay more for farm tools and shoes. And consumers in Alabama would pay more for farm tools and shoes with higher tariffs on farm tools and shoes and blankets and clothes and things like that. But there was a secondary effect on farmers, not just Southern farmers or any farmers anywhere, that if we have protectionist tariffs and it impoverishes our trading partners in Europe, the Europeans have fewer dollars with which to purchase American exports. And what were they purchasing from Americans? Agricultural products primarily. That's what the exports were from America to Europe primarily. And so a lot of the business of the Southern farmers dried up whenever there were protectionist tariffs or Midwestern farmers or any other farmers and anywhere else. And so that's what they were complaining about in 1824. Right off the bat. No one was talking about slavery or any of that stuff in 1824. And so the economic nationalists were emboldened by this. And so in 1828, they passed an even bigger tariff. And the Southerners called it the Tariff of Abominations. It was known as the Tariff of Abominations. And it increased the average rate to about 48%. And that gave rise to the famous ordinance of nullification by South Carolina. South Carolinians said, we're not going to collect this tariff at Charleston Harbor. This is the 1828 tariff. Long before the Civil War, any of that stuff happened. And I'll read you a little bit about what this ordinance of nullification said. I'll read from my own book. On November 19th, 1832, a political convention was convened that adopted an ordinance of nullification declaring the Tariff Act was quote, unauthorized by the Constitution of the United States and violated the true meaning and intent thereof. It is therefore null, void, no law, nor binding upon this state, its officers or citizen. As of February 1, 1833, all enforcement of tariff collection in South Carolina is to be suspended. And, you know, the father of nullification was Jefferson and Madison fathers. The Kentucky and Virginia resolutions of the year 1798, they nullified the Sedition Act, which made free political speech illegal by the John Adams administration. And it was Jefferson and Madison who wrote these resolutions saying, we're not going to enforce this law within our states, within Kentucky and Virginia. And Jefferson was asked by a friend from Kentucky to write the resolution for Kentucky, even though he was a Virginian himself. And so that's the genesis of nullification. And it was used all throughout the 19th century by states north and south. The state of Ohio nullified the existence of the bank of the United States by doing what it did, for example. And so the South Carolinians were serious. They even gave the governor $160,000. This is 1832, $160,000 with which to purchase firearms to fend off federal tax collectors, in case they came down and tried to enforce the tax. And also part of the law said that any federal tax collector that showed up in South Carolina would be imprisoned and have his personal property confiscated, that he had whatever he had with him at the time, his money or whatever he had with him. So they were serious. And so they nullified it. And what ended up happening is they had a compromised tariff. And over the next 10 years, the tariff rate was diminished from the high rate of 48% average. And so what happened was by the time you get to the year 1857, so this was 1832, 25 years later, the average tariff rate in America was 15%, 15%. That was the high watermark of free trade in America in the 19th century. But the same cabal, the same gang, the economic nationalists were still there. At this time, it was the Whig Party under Henry Clay, and then the Republican Party took that over. The Republican Party created in 1852 when the Whig Party disappeared. And the Republicans were now the champions of economic nationalism. And they took advantage of the depression of the year 1857 to say, well, what we need to cure the depression is protectionist tariffs. And so they got the ball rolling and they ended up passing the moral tariff named after a Pennsylvania steel manufacturer, Justin Morrill, not Pennsylvania, Vermont. I mean, Vermont, I'm thinking of Thaddeus Stevens. That was another creep in the Republican Party. So anyway, the moral tariff passed during the 1859, 1860 Congress cast the House of Representatives. This is before any Southern state seceded or any of that, Lincoln was not elected president yet. So the House of Representatives passed that. And then the Senate passed it and President Buchanan signed it two days before Abe Lincoln became president. So it was signed into law. It passed the Senate and signed by the previous President Buchanan two days before Lincoln became president. Lincoln gives his First and All-Girl Address bends over backwards to promise not to disturb Southern slavery in his First and All-Girl Address. He says over and over again, I have no intention to do this and all my speeches, if you read all my past speeches, I've never said I had any intention. It would be unconstitutional for me to do it anyway. And then he supports in his First and All-Girl Address something called the Corwin Amendment to the Constitution named after an Ohio congressman named Corwin that would have made it prohibited the federal government from ever interfering in Southern slavery, the Corwin Amendment. And the Corwin Amendment had already passed the House and Senate and several states had already ratified the Corwin Amendment to this. But on the issue of tariffs, Lincoln was totally uncompromising. He says in his First and All-Girl Address, it is my duty to collect the duties and imposts tariffs. And then he said the next line is but beyond that, there will be no invasion of any state. So he literally threatened the military invasion of the Southern states over tariff collection. Unlike, you know, Andrew Jackson was the president during the tariff of abominations and he didn't invade. Lincoln did. Lincoln kept his word because the Southern states, when they seceded, they no longer intended to send money to Washington, D.C. They had their own government in Richmond and so he used the words invasion and bloodshed in his First and All-Girl Address to describe what would happen to any state, the people of any state that refused to continue to pay the tariff, which had just been doubled two days earlier. So the rate of federal taxation was doubled two days earlier and there was no income tax. The tariff was the main tax. It raised over 90% of all federal revenue. And so Lincoln would pass 10 tariff-increasing bills during his time, during his administration. So by the time you get to the end of the Civil War, the American Civil War, the average tariff rate was over 50% 50. And it remained in that range 50% to 60% until the income tax came into being in the year 1913. So the whole latter part of the 19th century, when the Republican party had a monopoly in government, even one book that I cite in my research it's called Yankee Leviathan by Richard Benzel, B-E-N-S-E-L he points out that he couldn't think of any other government in a world that had more monopoly power for a longer period of time than the Russian Bolsheviks or the Mexican government if you look at in history, it's a monopoly government. And so the economic and nationalists were finally in charge, finally in charge and they did what they always wanted to do since the time of Hamilton. But before that President after President had failed to get this done one of the funnier episodes was when Henry Clay thought he finally had it made in the year 1840 they elected a Whig president William Henry Harrison and the Whigs controlled the Congress they were ready to go to town with high protectionist tariffs bring the bank back and start internal improvement subsidies and then William Henry Harrison, my favorite president, died a month after he was inaugurated which of course is why he's my favorite president and so his vice president was John Tyler who turned out to be a Jeffersonian and he vetoed all this stuff so they kicked John Tyler out of the Whig party and burned him in effigy in front of the White House and they did everything Henry Clay did everything but get down on his stomach and pound his arms and legs in front of the White House and scream like a baby over this if you read the history of what happened they kicked him out of his own party and he's the president of the United States a man without a party so that's why by the way there's a book called Recarving Rushmore by Ivan Elan that ranks all the presidents in the United States according how good a job they did in liberty and property and his number one president is John Tyler he ranks number one of all the presidents who's ever heard of John Tyler anyway that's why he's the most libertarian of presidents so therefore he's a bad guy basically when historians rank presidents it's mostly whoever kills the most people and raises the most tax that's Wilson, Roosevelt, Lincoln those are all the good guys the third plank which they finally got also internal improvements they've been arguing about that since the days of Hamilton economic nationalism that was part of Trump's speech in Louisville infrastructure Hamilton wanted that Jefferson's Treasury Secretary also came out Albert Gallatin with a plan for this but Jefferson said the Constitution first to do this so they didn't do it John Quincy Adams when he was president he said after he was president his biggest failure was they didn't spend any federal money on internal improvements James Madison when he was president his last day in office the last thing he did was to veto a spending bill that included internal improvement subsidies on it Andrew Jackson opposed that when he was president up to 1830 then I just told you the story about 1840 so they didn't get it then either so by the time you get to the American Civil War period there was almost no money, federal money spent on any of these internal improvements roads canals and railroads at all and some of the states had toyed with this but it was such a disaster such a boondoggle so much corruption that every state except Massachusetts had amended its constitution by 1960 to prohibit the use of tax dollars for anything any corporation did it was not just illegal but unconstitutional by state constitution because they had such a horrible experience with all this so you get to the Civil War the southern Democrats who had always been the primary opponents of all this were gone and the Whigs were in control but now they're called Republicans and so the war is on April of 1861 the war starts June of 1861 Abe Lincoln calls Congress back to Washington DC you know all those New England Yankees who were up there back in Boston had to get back on the horse and go back to Washington DC because there's an urgent matter to attend to okay there's a 60,000 man army in Virginia what's the urgent matter getting the Pacific Railway bill passed that's why they were called back that's where they're called back I mean there's a 60,000 man Confederate army in Virginia on massing and here's Congress say well we've got to get the legislation started to subsidize the transcontinental railroads which they did and so that was definitely high on the agenda they did they began subsidizing the transcontinental railroads Lincoln himself had purchased some tracks of land in Council Bluffs Iowa in 1857 and when they passed the Pacific Railway bill it gave the president the right to determine where they would start building the transcontinental railroad to California anyone want to take a wild guess where Abe Lincoln chose to start building the transcontinental railroad Council Bluffs Iowa of course so he must have made a killing on that real estate deal there as did all the luminaries of the Republican party and I'll read you just one short passage about this let's see there's a historian of the American West a man named D. Brown he was passed away a few years ago but the historian of the American West he wrote all these books about the American Indians the history of the American West and one of his books is called Hear That Lonesome Whistle Blow about the building of the transcontinental railroads okay and here's one of the things he said when Lincoln signed the Pacific Railway bill he assured the fortunes of a dynasty of American families the Brewsters, the Bushnells, Alcots Harkers, Harrison's, Trowbridge's he was on and on, my name's all these families and then he talks about the big shots in the Republican party Congressman Thaddeus Stevens received a block of Union Pacific stock in exchange for his vote for the subsidies he also demanded as a condition of his yes vote the insertion of a clause in the law requiring that all iron used in the construction of said railroad to be American manufacturer he was an iron manufacturer from Pennsylvania Republican Congressman Oaks Ames who with his brother Oliver manufactured shovels in Massachusetts became a loyal ally of the Union Pacific Railroad and helped to pressure the 1864 Pacific Railway Act through the Congress and he was a shovel manufacturer and it must have taken a hell of a lot of shovels to dig out the railroad tracks from Iowa to California and so a lot of the members of Congress in the Republican party became enormously wealthy from this and so they finally got their way and this promptly created the biggest political corruption scandal in American history up to that point it was called the Credite Mabillier scandal and that was the name of a company kind of a French word a Credite Mabillier scandal where they set up this company the Credite Mabillier I'm not sure where that word comes from, the title comes from and they would do such things as they were getting government money and so to build the railroad and then this company would supply them with rails, iron rails and the ties and things like that and they would sell them to themselves at grossly inflated prices and they would also buy the votes of members of Congress by giving them shares of stock for say $5 $5 a share and within a couple of weeks when the flood of tax dollars went into the company the shares would be worth $100 and so he had all these members of Congress who became instantly millionaires through all this and it finally was exposed one of the members of this scam apparently got ticked off at another member of the scam over something and he went to a reporter and he gave the reporter the names of all the members of Congress the shares of stock and the whole thing blew up and the whole country knew about this and a lot of people went to jail for it exactly the type of thing that Jeffersonians always argued about that the curse of economic nationalism that it would lead to rampant corruption waste of tax dollars inefficiency in the building and the two railroads that the government built at the time they declared that they were finished with the job and the great James J Hill came along and built the great Northern Railroad at the same time with no government subsidies at all and it was the most profitable and most efficient railroad by far and I have about one minute left here and this is basically what happened with the Transcontinental Railroad this is my map of the United States here's the United States here's Iowa here's Lincoln's property I'll put a picture of Lincoln here here's Abe Lincoln he's happy he's a big smile because he made so much money on that property and the railroad line of the government subsidized railroad line looks kind of like this they're in California because in return for congressional votes or even support by the territories the politicians and the territories they had to promise to run a separate line in your community and return for your vote so they did that James J Hill's line was very different the great Northern here's my map of the United States here's Lincoln again here's Abe Lincoln this was more like that if I had more time and I talk about this in my classes they actually put up on the computer you can find the map of the great Northern route and they really do look like the spaghetti thing that I just drew on here and because James J Hill was a private entrepreneur unsubsidized he did even get land grants he paid for the rights away through Indian territory with cattle or whatever they could trade for and of course his objective was the most efficient shortest route to the west coast because that's the most profitable and so he did and I happened to be in Montana Northern Montana a couple summers ago and I went to a restaurant they had a second floor bar and went out to the outside seating on the bar I sit there and there was a train track in front of it and right in front on the side of the train it said Great Northern, the Great Northern Route it's still there, still operating in Montana but James J Hill it's thought that he was one of the characters in Ayn Rand's novel Atlas Shrug and James J Hill is what one of them is patterned after so anyway that's my truncated story about the curse of economic nationalism how it came to America and of course once this scam was proven to be a recipe for accumulating great wealth and power governments all over the world have ever since imitated it and they've also recruited intellectuals like Trump has to tell stories about how wonderful this is trying to make people think that a set of government policies that benefits politically connected business people at the expense of you is really in your best interest that you really should support that and vote for that but if you understand a little bit about elementary economics you won't be fooled by this scam of economic nationalism and that's all I'm going to do for now and you can let off one more howl wolf's howl if you want thank you