 The topic I gave for this talk is the Curse of Economic Nationalism, and I've written several books about this curse. So I'm going to try to summarize some points that I've made over the past 15 or 20 years and 45 minutes about this. Economic nationalism is really another way of saying mercantilism. And if you ever studied mercantilism, as I did, you know, I was an economics major through the PhD in economics. I took three courses in history of economic thought in graduate school with E.G. West, and so we've read all about mercantilism. And the American version of mercantilism was led by Alexander Hamilton. He was the leader of the economic nationalist in early America. And so I thought I'd start with a definition of what mercantilism is. And it's basically the same as economic nationalism in today's language. And here's a quote from Adam Smith in The Wealth of Nations. In the mercantilist system, the interest of the consumer is almost constantly sacrificed to that of the producer. And the restraints upon the importation of all foreign commodities, which can come into competition with those of our own growth or manufacture. The home consumer is evidently sacrificed to that of the producer. It is altogether for the benefit of the latter that the former is obligated to pay the enhancement of price, which this monopoly almost always occasions. That's Adam Smith. Murray Rothbard had an essay. It's online called Mercantilism, A Lesson for Our Times. Question mark as though is tongue-in-cheek, of course, a lesson for our times. And here's what Murray said. He said mercantilism was, quote, a system of statism which employed economic fallacy to build up a structure of imperial state power, as well as special subsidy and monopolistic privilege to individuals and groups favored by the state. Which is not too different from what Adam Smith just said. And one of the students from Venezuela, is he here today? One of them wasn't you. He told me that he read my book Hamilton's Curse, which talks about this. And he said that it pretty much explains Venezuela government policy for the past 200 years, he told me. And so this is not just an American thing. It's mostly about American history and economics. But the way the world works is once one group of politicians figures out a slick way of plundering the population, the word spreads, and then they all start doing it in one way or another in their own way. So I'm not at all surprised to know that we have someone here who said, well, Venezuela has been like this for 200 years. Well, yeah. And these ideas didn't originate with Hamilton. I mean, a lot of it came from Europe. It came from England. And many of the same Europeans who migrated to Latin America, as well as North America, adopted made the same policies centuries ago, there as well as here. So, you know, the American Revolution was largely a revolt against British mercantilism. When the slogan was taxation without representation, when Jefferson wrote in the Declaration of Independence, the train of abuses of the condemnation of King George III, a lot of them were economic complaints. You know, he has separated us from trade with other countries. They complained about the Navigation Acts, which imposed a system of protectionism for the benefit of the British at the expense of the colonists, the Stamp Act, and so forth. And so a lot of the revolt, the American Revolution, was an economic revolt. And so the Americans fought a revolution basically against the British mercantilist system first and foremost and all of the tyranny that was used to enforce it. You know, one of Jefferson's complaints in the Declaration of Independence was a king of England had sent his swarms of bureaucrats. He didn't use the word bureaucrats, but who have eaten up our substance and come into our homes, things like that. Well, that was the enforcement of British mercantilism on the American colonists is what was going on. And so the war ends, the American Revolution ends, but there was always a group of Americans who were patriots and who fought against the British for eight years in the American Revolution, but who wanted to bring the rotten, corrupt British mercantilist system to America, as long as they could be in charge. It reminds me of this old movie, the Mel Brooks movie. I think it was history of the world part two. I think that's what it was where Mel Brooks plays the king of France in a laugh line all throughout the movie. It's good to be the king. It's good to be the king. He said he has big piles of gold stacked up beside him and he is good to be the king and things like that. And that's basically the attitude that the Hamiltonians or the economic nationalists in early America took, that yeah, this is a rotten, corrupt system. It's worth fighting an eight-year long revolutionary war to escape from. But if you're on the receiving end, it's a good deal. It's a bad deal if you're on the paying end. But if you're on the collecting end, yeah, that's a good deal. And so those were the economic nationalists led by Alexander Hamilton. And here's what Murray Rothbard again said about this. This was from his book The Mystery of Banking, page 192. After the American Revolution, a group of men led by Robert Morris. You know, he's, Robert Morris is called in history books, the financier of the American Revolution. But Murray said, no, he was more a defense contractor who got rich off the American Revolution. He wasn't some benefactor, some generous person who gave his money away to finance George Washington's army. And he was possibly the richest man in America at the time. And Morris and his compatriots, Murray writes about, his compatriots are basically the well-healed business community in New England, Philadelphia and New York, you know, the northern, that part of the kind of the northeast part of the part of the United States. And he said, so what are they up to after the revolution? They wanted, quote to quote Murray, 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 so that was Murray Rothbard. And Robert Morris picked Hamilton as his basically political water boy. It was Hamilton who he sent from New York to the, well, the capital was in New York at the time. The Washington D.C. didn't exist yet at the time to get this done. And so after the American Revolution, an interesting story is that, you know, Hamilton was a very young man, and he must have been good at politics because he sort of ingratiated himself so much that he was George Washington's adjutant general during the Revolutionary War. And then as the war was ending, Hamilton is thinking, well, what am I going to do now? I'm the assistant to the most powerful man in America. Well, I'll send my resume to the richest man in America. That's a natural step. So he writes a letter to Robert Morris, and he mentioned in this letter, he pretty much said, you know, I think what we need to do after the Revolution is have high protectionist tariffs, internal improvement subsidies, a national bank, and a heavy public debt, which is exactly what Morris wanted. So he was a big kiss up. And when he mentioned when Morris contacted George Washington and said I would like Alexander Hamilton to be the Treasury Secretary, George Washington says to him, I didn't know you knew anything about finance. We never talked about it. And he didn't. He wrote, he knew that another friend of Washington, Senator Timothy Pickering of Massachusetts, was well schooled in economics and finance of his day. And so he wrote Pickering and said, well, what can I read up on that learn something about finance? So Pickering sent him some sort of sort of Cliff note type readings on on finance financial matters enough that he would learn the lingo. And that's how he was able to write this letter to Robert Morris. And so he so the deal was done. He did become the Treasury Secretary. And but which is, you know, if you read this and I read this is this story is told in Ron Cherno's Pulitzer Prize winning biography of Hamilton. This is not some reclusive right wing publication or something like this is mainstream mainstream historians know this story, which is why I find it so ludicrous that you see people like Pat Buchanan or some of the neocons like David Brooks writing in the Wall Street Journal claiming that Hamilton was an economic genius who invented the American economy. They actually say things like that as though, you know, in one one swoop of a magic wand, he invented the American economy. When the reality was he was sort of an ignoramus on economics, sort of a crude mercantilist, very unschooled. Whereas it was Jefferson, who was the really his nemesis, who knew a lot of economics. Jefferson studied under Terjeu of his name is up here somewhere, one of the precursors of the Austrian school. If you walk into Monticello today, Jefferson's home in Virginia, right by the front door. There's a big bust of Terjeu, the French finance minister, one of the physiocrats, as they were called. And so it was Jefferson who knew Adam Smith and read the French physiocrats and understood the economics of his day. And it was Hamilton who was the economic ignoramus really, as I'll show you when I talk about some of his crazy sounding ideas. And so that that was the origins of the economic nationalism in America. The attempt to bring British mercantilism against which the revolution had been fought to America. And the original elements of that Hamilton gave it a name. He coined the phrase the American system and talk about Orwellian language. This was the British system, but he called it the American system. And the planks of it were protectionist tariffs, a national bank run by politicians. There's a good idea for you, huh? How's that? Hey, let's put all the money in charge of politicians in charge of all the money. Corporate, what we today call corporate welfare, but in those days they called it internal improvement subsidies, which is basically government subsidies to corporations to build roads and canals. And then later railroads. The railroads didn't come online until the 1820s and 30s. And so they're not quite Hamilton's time. And then the fourth plank was a large public debt. And Hamilton famously called a large public debt a national blessing. And the reason why he called it a national blessing was that he thought the Constitution created a much too small of a government. The government was not nearly big enough. In fact, he stormed out of the Constitutional Convention and condemned the Constitution as a frail and worthless fabric. And because it didn't create a big enough government that he wanted. And so the idea of promoting a large public debt was very Machiavellian. And Hamilton's reasoning was that the people who would buy up the government bonds would mostly be the affluent people. He was thinking of a lot of his friends and associates along the Eastern Seaboard. And therefore you would tie the affluent to the government. They would want to make sure that the government always had plenty of revenue with which to pay off the principal and interest on their bonds. And so unlike today where we tie the poor people through welfare to the state, Hamilton wanted to tie the rich people to the state. And this is really the origins of why the American Treasury Secretary, I believe it's a federal law, or maybe even in the Constitution, I haven't read the Constitution a while, that the Treasury Secretary has to be from Goldman Sachs. So that's basically the idea of tying the rich people to the state. But that was Hamilton's rationale. In fact, when he was Treasury Secretary and the nationalists had their man in power, he nationalized the war debt. The Revolutionary War had been financed by the states. The states sent money individually to finance whatever needed to be financed with the states. And they sent militias, soldiers as far as that goes. And then after the war, there were some states like Virginia had almost paid off the war debt and borrowed money. And other states like Massachusetts had hardly paid anything at all. The Yankees are always freeloading on everybody. The hated Yankees of Massachusetts. So anyway, Hamilton nationalizes the war debt. And this was a massive insider trading scheme where the insiders in the national capital knew that the Congress was about to pass a law saying that at a future date, say six months from now, all of these bonds would be valued at face value, 100% face value. But at the time, they were trading between two and 10% of face value. So there is a mad rush all up and down the eastern seaboard by the insiders, members of Congress, Hamilton himself hired people with boats and stagecoaches and horse and buggy, anything, any means of transportation existed to buy up these bonds. A lot of them were from Revolutionary War veterans who had been paid in government bonds because they didn't have the cash. And so they were buying up these bonds at between two and 10% of face value. And only they knew that in a few months the government would purchase those bonds from them at 100% of face value of the bonds. So they made a killing. Robert Morris is said to have made the equivalent of $36 million on this deal. And so that will tie the rich people to the state because they learned that we can become fabulously wealthy through our connections to the state, through the independence of our government. And in one of my publications, I quoted a letter that Thomas Jefferson wrote years later where he pretty much knew what Hamilton was all about. And the nationalists, so to speak, when they did this. And he called it, he wanted a sort of more or less a dictatorship bottomed on corruption. Hamilton wanted a permanent president. He proposed a permanent president at the Constitution Committee. It didn't get it though. Okay, so that's why a large public debt was favored by the nationalists. Now the bank, we did get the bank. There was this big debate between Hamilton and Jefferson on the national bank. And the Constitutional Convention had rejected a national bank, which would seem to be pretty good evidence that it's not constitutional. The Constitutional Convention said no. They debated it and said no, we don't want it. It's not in the Constitution. It's not among the delegated powers. But still George Washington asked Hamilton and Jefferson to write basically briefs on, you know, make the case for and against, which they did. And Jefferson, that's where Jefferson announced, you know, enunciated his strict constructionist view of the Constitution. If it's not in black and white, it's not there. Whereas Hamilton said, you need to read between the lines. Jefferson said, I have read between the lines. I only see blank space and nothing there. But then we ended up getting the bank, the bank, the national bank, the Bank of America. And so, but it was part of a political deal. George Washington was basically bribed to sign off on it because he owned a lot of land in Virginia and they were creating Washington, D.C. And he said, if you extend the boundary of Washington, D.C. to be adjacent to Mount Vernon, my property, I will sign the bank bill. So he did. He signed the bank bill. We got the bank. And here's what Murray Rothbard says about the effects of the bank, the first bank of America. See, pages this. The Bank of the United States, it was called, B.U.S., Bank of the United States. Murray writes, quote, it promptly fulfilled its inflationary potential by issuing millions of dollars in paper money and demand deposits. The result of the outpouring of credit in paper money by the new Bank of the United States was an increase in prices of 72% from 1791 to 1796. So it immediately created inflation and a boom and bust cycle. And it was given a 20-year charter. And so at the end of the 20 years, it was not rechartered by the Congress because it had created inflation. It had created a boom and bust in the severe recession. Murray's doctoral dissertation was called The Panic of 1819, for example. And so we already had a central bank creating panics. They were called panics. And then it was Herbert Hoover, by the way, who said, I don't like this word panic. Let's call him depression. That's more enlightening, depression. But they used to call these panics back in those days. So it wasn't rechartered, but then the War of 1812 was used as a rationale to recharter and to monetize the war debt. And so they did. They gave it another 20-year charter. And so this was a big victory for the economic nationalist, central banking. Central banking is they wanted to use the bank as a political tool to offer cheap credit to the politically favored corporations to finance corporate welfare and to finance just the big government in general. And today, in the modern public choice literature, this is called the political business cycle. There's a big literature on something called the political business cycle. But that's what they wanted. It was always intended to create this vehicle, this bank for that reason. For that reason. And by the way, in that letter from Jefferson that I mentioned that he wrote explaining his opinions of Hamilton, he goes on to say in that letter that this scheme where he nationalized the war debt is a way to link the wealthy people, the country to the government. Jefferson pointed out that, well, this is a one-time deal. And many of these members of Congress will retire or die. And so if you want some permanent engine of inflation of the government is necessary in the eyes of the economic nationalist, because this was a one-time thing, buying the favor of the rich people by allowing them to enrich themselves with his bond with his arbitrage. And so that engine, he called it an engine of corruption. He said a more permanent engine of corruption is needed, Jefferson said. And that engine of corruption, he said, is the national bank, the Bank of the United States. That's because that's permanent. Once you got that, that's there forever. Look at the Fed. And so that's one of the reasons why he opposed the Bank of the United States. And it's also the same reason why the nationalists were so in favor of it. They saw this as they're modeled after the Bank of England, which was always a political tool used to enrich the state. Remember that definition by Rothbard, special subsidy and monopolistic privilege to individuals and groups favored by the state. Well, how are you going to do that? Well, if you have a bank and you can counterfeit money, that's how you do that. And so that was always the purpose. It wasn't to correct market failures and stories that you learn about in some of the economics books. And so along comes Andrew Jackson in the 1830s. He was a sworn enemy of the Bank of the United States. And he eventually vetoed the rechartering of the Bank of the United States because it had done what its opponents always expected it would do. It'd create boom and bust cycles, inflation, money was used. They literally financed the political campaigns of members of Congress who supported the bank and who supported the nationalist agenda and at the expense of their opponents who were the Jeffersonians who opposed that. So it totally corrupted politics and created boom and bust cycles. And Andrew Jackson vetoed it. Here's what he said. One of the things he said, he said, when he vetoed the bank, he said, every monopoly and all exclusive privileges are granted at the expense of the public. The many millions which this act, the rechartering of the Bank of the United States, proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people. He said, these stockholders were profiting from their connection with the government only and not any productive efforts on their part. And so he hit the nail on the head, did Andrew Jackson on that. And that's one of the reasons, by the way, the typical history professor who writes about this. After I, you know, when I was doing the research on this topic, and I want to know what are the historians saying about Andrew Jackson and his veto of the recharging of the bank. And it's about the same reaction that CNN had over a Trump meeting with Putin recently, the hysterical denunciations of Andrew Jackson, calling him an ignorant farmer and all this stuff like that. Whereas he was right on the money. If you go online and read his Google, Andrew Jackson's veto of the Bank of the United States, very articulate. It sounds like Murray Rothbard could have helped him out with his speech. It was so libertarian. And that's why Rothbard, by the way, in his book, The History of Money and Banking in the United States, says the Jacksonians were real libertarians. Not everything Andrew Jackson himself did was libertarian, but certainly vetoing the recharter of the bank was. And so, you know, mass murdering the Seminoles was not quite, you know, in that category. But the Jacksonians, you know, these were different people. And just Andrew Jackson, Murray writes how they were largely libertarians of the time. The second plank of the nationalists was always protectionism. And again, you know, Hamilton wrote this famous report on manufacturers that laid out the economic agenda of the nationalists. And it's kind of interesting that, you know, this has gone up through history. The Whig Party adopted it after that. And the Republican Party, beginning with Abe Lincoln, adopted it. And so this agenda that was written up by Hamilton, it lasts to this day. You know, I quote George Will just a couple of years ago saying, we live in Hamilton's Republic today. And so this was very, very influential. How many people write a book that is still influential 250 years later as far as that goes. But Hamilton, like I said, he was an economic ignoramus. I don't think he ever actually read Adam Smith. I think he sort of vaguely knew something about the invisible hand theorem. But I don't think he ever actually educated himself. But what he did do is he got these pamphlets from British mercantilists that they used to try to sell mercantilism, to try to convince the British people that higher prices were really in your best interest. You know, paying more for my product. You're using your self-interest. And so Hamilton sort of repeated a lot of these superstitions. As Rothbard said in that quote, mercantilism is a system of statism which employed economic fallacy to build up a structure of imperial state power. Economic fallacy is always, you always have to pull the wool over the eyes of the people with economic superstitions. And here are a couple of the economic superstitions that Hamilton used. And these were repeated by Henry Clay, who was picked up the mantle in America of economic nationalism from 1830s to the 1850s. And most of these exact same arguments that I'm going to mention in a minute were then repeated by Abraham Lincoln because he picked up Clay's mantle after Clay died and the Whig party disappeared. So in the report on manufacturers, he argued for a complete prohibition of all imports, no imports at all. And he made the famous infant industry argument also there. This is not protectionism, but he said, you know, new industries need to be protected with tariffs so that they can become adults. And of course, you can make what economists have always said about this, is that these infants never grow up. The steel industry has been protected by tariffs since it was created in the early 19th century. And then fast forward, President Trump tariffs on steel. They're still being protected. The infant industry argument was made in 1800. And here we are in 2018. They're still infants. They haven't grown up. They still need tariff protection. But that was Hamilton's idea. He also argued in here that protectionism will cause lower prices. You see, you know, isolate domestic manufacturers from international competition, and they will, out of the goodness of their hearts, lower their prices. Contrary to all worldly experience during his time and any other time. You know, this is, you know, everyone in the world had to know this was a foolish who had ever studied economics for an hour. You know, this is foolish even at that time. However, this is all aimed at the general public. This is all aimed at bamboozling the general public, not people who have studied economics. He said this, quote, transportation is an evil. Transportation is an evil. What he meant by that was that, you know, if somebody produces shoes in England and they produce them for, let's say, $2. And it costs $1 per shoe to ship it across the Atlantic Ocean. And they sell it, so their costs are $3, and they sell the shoes for $4. Okay. Well, if American shoe salesmen are selling their shoes for $5, that's an evil thing. It's evil because even though they have transportation costs that still allow them to compete with the American shoe sellers, shoe salesmen, it's evil because you're buying British shoes and not American shoes. And so he argued that anything that involves transportation costs should be banned. Anything that is not produced here should not be allowed to be sold here in this country. Abe Lincoln made the exact same argument when he was making his protectionist speeches many years later. And Hamilton also argued to prohibit the export of any material that could be used to make final goods. And so if the British need leather, to make leather goods, we shouldn't ship any cows to England or any leather to England because they'll use that to compete with Americans. And so, you know, one final example of how ignorant Hamilton was on economics is that even in his day, the economic scholars understood that a tax on imports eventually becomes a tax on exports because when you tax imports, you impoverish your trading partners. If we have a protectionist tariff on British imports, for example, that is so high that it blocks out British imports, then the British merchants have reduced income. They have fewer dollars. They were earning US dollars, but now they're not. And so those dollars will not be used to buy American goods, either from the British or from people who the British sell the dollars to. Those dollars eventually will come back here and be used to purchase American goods one way or another. And so that's why a tax on imports eventually becomes a tax on exports. But Hamilton, of course, didn't understand that and he actually argued to prohibit the export of anything that could be used by competitors in manufacturing. So these are some of the superstitions that went on for, were repeated for decades. And they were used to create what was called the tariff of abominations in 1828. When the average tariff rate went from a revenue tariff, as they called it, in the 10, 15% rates range to the average tariff being 48%. And that's when the South Carolinians almost acceded then in 1828. The South Carolina legislature by 1832 passed a law declaring that they would not collect the tariff. They gave the governor $160,000 with which to purchase firearms in case tax collectors showed up in the state of South Carolina. And part of the law said that if any federal tax collector did show up that his private property would be confiscated and he would be imprisoned in South Carolina. Hold your applause, please. And so they were dead serious about this. And so there was a big... And Andrew Jackson was still president and this is one of the bad things he did. He threatened to send battleships to South Carolina to collect the tariff. Never did, but he threatened Lincoln did. Lincoln did when his time came. He did send warships to South Carolina because when they seceded finally in 1860, yeah, they weren't going to pay the tariff. They weren't going to send money to Washington, D.C. And so he sent warships before the war started. He did that. And so Andrew Jackson threatened that. So what happened eventually was they negotiated a lower tariff. Over the next 10 years from 1832 to 1842 the tariff was negotiated down. When you get to the eve of the American Civil War the average tariff rate was back down to 15%, one to five. And that was the high watermark of free trade in America in the 19th century. 1857 was when they started creeping out. They started increasing the tariff by 1859 in the United States. But that was the high watermark. And so Henry Clay, as I said, he picked up the mantle of the economic nationalist and he called it the American system because that's what Hamilton called it. And there's some interesting stories about Clay. He was known as the Prince of Hemp. He was a hemp farmer and he wanted protectionist tariffs because he didn't want foreign hemp competing with his hemp. And he wanted government subsidized road building so he could transport his hemp to market. Federal subsidies for this. And so Henry Clay thought that he was finally in the driver's seat in 1840 when the wig, William Henry Harrison, who is Lou Rockwell's favorite president, by the way, was elected president because here's Henry Clay. He was a powerful, very influential speaker of the House, the leader of the wigs in the Congress. And the Congress, the wig party was influential in Congress and they had the presidency. William Henry Harrison was elected. They kept running these old, folky generals, hoping that one of them will finally catch on and Harrison finally caught on. But unfortunately for Henry, Harrison died one month after he was inaugurated. That's why he's Lou Rockwell's favorite president. Couldn't have done much damage in one month. And John Tyler becomes president, Vice President John Tyler. It turns out John Tyler was a Jeffersonian. He's from Virginia. And he was a free trader. He was opposed to corporate welfare. He's opposed to the National Bank. And so the wigs burned him in effigy in front of the White House, kicked him out of the wig party and threw a big hissy fit. And so they didn't get their way until Lincoln came in. Lincoln was a wig for 25 years before he became a Republican. And he once said that all, he said all the ideas I have about politics come from Henry Clay. That's a paraphrasing of an Abe Lincoln quote. And so, so they finally did get their way when Lincoln came around. But, but Henry never succeeded at that. Okay. And so with with the tariff, Lincoln did come in Lincoln signed 10 tariff bills, tariff increasing bills. His tariff rate went from about 15% to close to 50% by the time the civil war is over. And it remained in that range until 1913 when the income tax was adopted. So we had 50 years of protectionist tariffs, although foreign trade always accounted for less than 10% of the U.S. economy. That's why people like Pat Buchanan, I have one of my articles on lourockwell.com, it was called Pat Buchanan's post hoc ergo proctor hoc economics. And so, you know, that means, you know, after this, therefore because of this, the rooster crows in the morning, sun comes up in the morning. Therefore the rooster crowing must cause the sun to come up in the morning. And so Pat Buchanan and people like him will say, we had protectionist tariffs. We also had the industrial revolution in the late 19th century. Therefore the protectionist tariffs caused the industrial revolution in the late 19th century, even though 90 to 95% of the U.S. economy was not affected by these protectionist tariffs. But that was the policy that was ushered in during the civil war and lasted for 50 years. And 50 years of protectionism. And the high tariffs, this really plundered American farmers because American farmers, as I said, when you have a tax on imports, becomes a tax on exports. And what were Americans exporting? Mostly agricultural products. So the farmers of the Midwest and the South in particular were plundered for 50 years and were always a big political voting block for free trade because they understood this. They didn't succeed because the Republican Party had a monopoly. In one of my books, I quote an author, Richard Benzel, his name. He wrote a book called Yankee Leviathan. He said the Republican Party from 1861 until basically 1913 had the type of monopoly political power that has only been matched possibly by the Russian communists and Mexico in terms of the total dominance in national politics for a long period of time. There was just that one respite when Grover Cleveland was president in the 1880s but other than that, the Republicans totally monopolized politics all during that time. So the farmers never got their way until the crusade for an income tax came about. In 1913 was the income tax amendment. A deal was struck with the farmers. Finally, the deal was this, we will reduce the tariff. The tariff rate is 50% to 60% on average, which is killing you. We'll reduce it down to maybe 20% if you, the farmers, support an income tax. Of course, the income tax will be just tiny. It'll only apply to the rich people, so you're good. That's a big lie. By the time you get to the end of World War I, the top income tax rate was 77%. It started at 7% in 1913. The war is over by 1919. It's 77% of the highest rate. The farmers fell for this. They put all their votes and their money behind the income tax, and they did reduce the tariff rate in the low 20s. But then by the mid-1920s, the tariff rate starts creeping up to the mid-30s. Then by 1929, just 1929, 1913 and 1929, it's 60% of the tariff rate. We ended up with an income tax and an ever-increasing income tax rate, and protectionist tariffs, even worse than they were when they started. 60% was the Smoot-Hawley tariff, which should be called the Smoot-Hawley Hoover tariff because Herbert Hoover signed it. He was president then. He's the one who signed it in the law. Of course, that ignited a trade war that shrunk the total volume of world trade by two-thirds in three years, the big international trade war. That didn't help in terms of the Great Depression. That's why I call this the curse of economic nationalism. When Franklin Roosevelt came in, one of the good things Roosevelt did is he understood what a disaster this was, the Smoot-Hawley tariff. What they did was they started the general agreement on tariffs and trade, GATT. Basically, for 50 years, they talked down the tariff rates, but it took them 50 years to do this. Every eight years, they would have a big meeting. Some people used to say that GATT stands for general agreement to talk and talk, which is what they did. But they did eventually undo the damage of the Smoot-Hawley tariff. On corporate welfare, that was another disaster that happened. The economic nationalists wanted this from the very beginning. Hamilton made all these speeches. They talked state governments into this in the 19th century in America. It wasn't until Lincoln came along that the federal government got into this with the railroad subsidies. I'm going to quote myself from my book, The Real Lincoln. There's a section on what happened here. I quote an economist named Carter Goodrich. He wrote a really excellent book on the history of internal improvement subsidies. He said, Ohio stood as one of the chief examples of the revulsion of feeling against government promotion of internal improvement. In 1851, Ohio followed Illinois in amending its constitution to prohibit government subsidies to private corporations because they had done that. They had subsidized road building and canal building companies and railroad companies. The money was stolen. Nothing was built. No roads were finished. It was a catastrophe and the people were left with millions of dollars in debt. They actually amended their constitution to prohibit this in the future. Indiana and Michigan were even less successful in Illinois and Ohio. In the three short years after spending millions on canal and road building projects, the projects were all bankrupt. These states also amended their constitutions to prohibit government subsidies for internal improvements. Subsidized internal improvements were such a universal disaster that when Wisconsin and Minnesota entered the Union in 1848 and 1858, their constitutions prohibited grants and even loans to private companies. By the time the Civil War broke out, the only state that had not amended its constitution to prohibit the expenditure of funds to corporations for any reason was Massachusetts. Because they had all gone through this, these internal improvement subsidies, the Hamiltonian system, and it was one disaster after another. But remember, somebody made a lot of money in all of this. The taxpayers were screwed, but somebody made a killing. And that somebody is the politically connected, the politicians themselves and the business people who they gave all the contracts to for this. And so the Republicans never gave up on this. Lincoln comes in, and in June of 1861, on the eve of the first major battle of the Civil War, what is Lincoln busy doing? Well, of course, he's getting the Pacific Railway Act. He calls Congress back home. They had left, called back to Washington to do what? To deal with the war? No. No, I mean, the Confederate Army is amassing in Manassas, Virginia, you know, right 10 miles from Washington, DC. And Lincoln's priority is to get the Pacific Railway Act passed because he was an old railway lawyer, a railroad lawyer. He represented the Illinois Central and all the major railroads in the Midwest. He was offered the job of General Counsel of the New York Central. He was the man. He traveled on an Illinois Central train with an entourage of executives and it wore expensive suits. He lived in the biggest house in Springfield, Illinois. His office was 50 steps from the state capitol. And so he was really politically connected. And so we have this situation where he passes the Pacific Railway bill and he inserted in the law that the building of the Transcontinental will start in Council Bluffs, Iowa. And it's just a coincidence and a pure accident, I'm sure, that in 1857 he had purchased a large amount of land in Council Bluffs, Iowa. And so Lincoln himself played the corruption game that Hamilton started by buying a big bunch of land. And when he got his chance in politics, he put that in the bill that that's where they would start building the Transcontinental Railway. It's still known today as Lincoln's Hill in Council Bluffs, Iowa there. And so he must have made a killing on that. And so that was the beginning of the federal corporate welfare schemes. And of course, some of you, the Americans in the room, might be familiar that there was one of the biggest political scandal in American history up to that point. It was called the Crédit Mabillier Scandals, the name of the company created by the government subsidized Transcontinental Railroads. And here's, I drew a little map of the route that was built by the government subsidized Transcontinental Railroads. It looks something like that. Because every member of Congress would say, well, yeah, I'll vote for this, but you have to run a separate line to my little town, even though it's uneconomical. We'll do that. And so they did. If you want the subsidies, you'll do that. Whereas there was one railroad that was built, Transcontinental, that was not subsidized. James J. Hill, I mean, one of the characters in Atlas Shrugged is supposed to be James J. Hill. And he took no subsidies, not even land grants. He paid the Indians for right away with cattle or money or whatever they could take. And his route was more like that. And his railroad was by far the most profitable railroad. The Great Northern was the name of it. I happened to be in Whitefish, Montana a couple of years ago in the summer. And there's a restaurant on the second floor. You can sit outside on the second floor. I go up there and I sit down. And there's a train track out there. And there's a train sitting there. And it says the Great Northern. It's James J. Hill's railroad. It's still running through Montana. So that's the difference between that. That's James J. Hill's route. Something like that. And there's the government subsidized route. It looked more like that. And so that started, you know, that was the other. So also during the Lincoln administration, we got the national currency acts and the legal tender acts. So this whole agenda of the American system, British mercantiles and protectionism. We got 50 years of protectionism beginning with the Lincoln administration. We got the legal tender acts and the national currency acts which monopolized the money supply. Didn't get a national bank back, but we got that. And then we had the corporate welfare run amuck, which was of course the Hamiltonian British mercantilist system also. And of course a big debt with the war. You know, war has always created a big amount of debt. Andrew Jackson had paid off the national debt. He paid it off completely when he was president. Okay. And so fast forwarding to today, with President Trump about a year ago, President Trump went to Louisville to make a speech to talk about his economic agenda. And here's what he said. And you'll see why he went to Kentucky. Henry Clay was from Kentucky, by the way. The Prince of Hemp was from Kentucky. Here's what I'm quoting Trump last year. If you go online and just Google Trump's speech in Louisville, American system, you'll see you get the whole speech. He says this, Henry Clay believed in what he called the American system and proposed tariffs to protect country and finance American infrastructure. Like Henry Clay, we want to put our own people to work. And so Trump went to Louisville to announce that he was an economic nationalist and a devotee of Henry Clay and by implication Hamilton and by implication the British mercantilist against which the American Revolution was fought. So I think he should probably get rid of that picture of Andrew Jackson that's in the Oval Office or King George III instead. Be more appropriate. I think my time is up and that's my story and I'm sticking to it.