I brought this up on X yesterday but I want to do to a bit more on explaining my tariff views – and, indeed, my overall economic views. So, here goes:

You’ve seen this picture of some variation of it, probably many times: the driving of the last spike in the Transcontinental Railroad. This was a major development in the growth of the United States – tying together the East and West and ensuring rapid settlement of the Great Plains. But what most people don’t know is that the rails used to build that railroad and the tires (wheels) on the trains in this picture were probably made in Germany, by Krupp. Here’s the logo of that company:

De drie ringen – the three rings. After the World Wars a lot of foreigners thought the three rings stood for Krupp cannon as Krupp was the premier gun maker for both the German Empire and Nazi Germany…but the truth is much more prosaic. Alfred Krupp was the first major German steel manufacturer and his firm struggled mightily early on. He did, indeed, realize his steel would be excellent for cannons and rifles but the military establishment of Prussia (his homeland) and the rest of Europe was skeptical of the newfangled thing, preferring to retain their cast-iron muskets and bronze cannon as tried and true (it was only after the astonishing performance of Krupp cannon in the 1870 Franco-Prussian war that everyone was sold on steel guns). What allowed Krupp to take off was two things: the exceptional quality of their steel and their invention of a new method of making steel railroad tires which produced a product superior to everyone else. The Krupp firm made so much money off the tires that Alfred Krupp decided to make three railroad tires his company logo – de drie ringen. Krupp’s rails and tires were so good that we Americans bought them in huge quantities. Krupp-steel was used to crisscross our continent with railroads.

But during all this time, we lived under a Protectionist trade policy. Sure, everyone loved the quality of Krupp products but they were expensive, as such, and then you had to pay the tariff to import them to the USA. Modern Free Trade nimrods would say we should have lowered the barriers to allow more Krupp steel in…but what happened was that the high tariffs induced American manufacturers to get into the game…by the 1890’s American-made railroad tires and tracks were only slightly less good than Krupp’s and being made at home and not subject to tariffs, were a lot cheaper. Boom: American railroads started buying American products. Here’s the key thing to remember: had we not had Protection, the American industries created to make railroad tracks and tires would have not come into existence. German labor costs were lower than American. The German product was better than we could produce out the gate. No tariffs would mean the German product would not only be better than we could ever make, but cheaper.

Now, think about this: had we not developed domestic railroad suppliers, what would have happened to us during the two World Wars when German imports were no longer available? We would have been in one heck of a bad situation…at a time when American rolling stock would be massively used, we would lack the domestic means to maintain and expand our rail system. Absolute catastrophe. Thanks to tariffs, we didn’t need German products. The loss of Germany as a trade partner meant absolutely nothing to us.

The economy, my friends, is not something to make your stock portfolio grow. It is what we do for a living – how we get our daily bread. Just think of all the things you use every week – by and large, everything you use should be made domestically if at all possible. We’re not talking luxury goods like an excellent French wine or some delicate silk fabric from the storied East…we’re talking about the bread and butter in your pantry, the pipes that bring water to your home and carry away waste, the gasoline in your car, the power lines that carry electricity to your house, the shoes on your feet, the shirt on your back. These are the things we need to do for ourselves…because in a crisis, nobody is going to do it for us. Point blank: the more dependent we are upon foreign suppliers for our basic necessities the more advantage foreign enemies have over us. And here’s another thing to consider – the US dollar is the global currency and nobody is going to want to dispense with it mostly because nobody trusts any other nation to hold assets…this has worked out well for us because we can print as many dollars as we like and buy cheap foreign goods with them…but in a real crisis, your wealth isn’t your money: it is what you can make, mine and grow.

Money was invented so that I don’t have to exchange a sack of potatoes for a bushel of wheat. It is a convenience – something standing in the place of me exchanging goods for goods because much easier to hand money to someone instead of the tedious transactions of a barter economy. But behind that money, you’d better have something someone wants. We used to back our money with gold, silver and copper…now we back it with “full faith and credit” which is meaningless support for a myth. If foreigners ever perceive that having US dollars isn’t the way to go – like, say, if we’re at war with China and not doing well – then they’re going to essentially demand goods for goods. Perhaps still denominated in dollars, but there better be something behind that slip of paper. And if we don’t make, mine and grow things? What then backs up our currency?

To have wealth, we must make – and to be safe, we must supply as much of our needs domestically as we can. This isn’t to say that trade isn’t beneficial. It is, in fact, one of the most beneficial of human actions. It is trading nations who always do best. If you ever wonder why Africa – where humans originated – never developed a high sub-Saharan civilization then look no further than Africa’s geography: outside the Nile, none of Africa’s major rivers are navigable year-round at distance. The African coast has hardly any natural harbors. Basically, deserts and oceans isolated sub-Saharan Africa from the main cross-currents of human development and so when Europeans first went into central and southern Africa starting in the 16th century, they found people who simply could not withstand superior European technology and organization. Had Africa been able to trade as readily as Europe, it probably would have developed similar to Europe. Lack of trade is a society-killer.

But Free Trade between nations is a myth – it has never happened and never can happen. If you brought together the two most honest nations and negotiated the most fair and square free trade deal, you still wouldn’t have free trade because each nation is working under a different tax and regulatory system. Each nation will also almost certainly have developmental differences which means they might be better at this, worse at that and so on back and forth between them. So even with the most honest approach, you still won’t have free trade – the internal differences between the trade partners will work out that one of them gains an advantage over the other. And here’s the spoiler: outside suckers like the USA (and Britain in the 19th century when they became the first nation to try Free Trade), nobody is honest. Everyone is lying, cheating and stealing to the largest extent possible. Bribes, subsidies, secret tariffs and bizarre regulatory mazes are designed to wring every last advantage for their side. Back in the 1980’s when we were all upset about Japanese car imports hardly anyone noticed that the reason the Japanese were able to dump their products in the USA was because their market was protected…not officially but through a maze of regulations and social constructs which essentially kept American automobiles out of Japan (in spite of Japanese loving every last bit of American pop culture and thus being primed to buy a Chevy). On and on it goes like that – Trump is right: they have been ripping us off.

But, as noted, even if they weren’t stealing, free trade is still a blind. Because even if a foreigner can make something for us better, faster and cheaper that isn’t the only consideration. Our people need to work. Our people need to have dignified jobs and lives. Our nation needs to be safe in a crisis. We need to be able to do things.

The Francis Scott Key Bridge in Baltimore was partially collapsed in March of 2024 – officials now say they hope to have a replacement bridge up by the end of 2028. More than four years later! And if you really think a bunch of Democrats in Baltimore will meet that time line then I’ve got a collapsed bridge to sell you. It took less time to build the entire Golden Gate which is a bigger bridge. We’re currently constructing the USS Enterprise (CVN-80) which is a replacement for USS Enterprise (CVN-65) and the newer ship is going to take twice as long to build as the older even though there is no significant difference in tonnage or layout. We see things everywhere taking longer and longer and costing more and more – and, sure, taxes and regulations are playing their huge role here but it is also that we simply don’t make as much stuff as we used to so we’re dependent upon unreliable foreign suppliers and we’re increasingly using cheap, illegal labor which is totally unskilled (some of the new home construction done by illegals is atrociously bad). Suppose we got into a big war and needed to build lots of things very fast – as we had to in World War Two? Right now, we simply can’t do it – we lack the physical plant and the domestic skills.

In order to maintain the irreducible minimum of required capacity, we’re going to have to Protect certain industries and trades from foreign competition, even if that competition is superior (usually it isn’t, though; just compare your garbage Chinese-made drill with that American-made one that you’ve had in your garage for 40 years). In food, we must not import any of soybeans, corn, wheat, beef, pork, poultry and dairy products. In industry we must make all our own steel and aluminum, all our own lumber, all our own trucks, trains, planes, all our own power lines and associated equipment…we must as far as possible drill, baby drill for oil and natural gas and build sufficient nuke plants to ensure a glut of electrical production capacity. And we must do this even if it ends up more expensive – but it won’t because here is the dirty, little secret the Free Traders don’t want to tell you…prices in the USA fell continuously from the end of the War of 1812 until the creation of the Fed in 1913. The reason we need to import cheap consumer goods is because the deliberate use of inflation to sustain the banking system has priced us out of our own economy. If we go to sound money (I’d prefer the Gold Standard, but lets go baby-steps here) and try to eliminate inflation (rather than keep to the Fed’s ruinous and insane policy of ensuring at least 2% annual inflation) then we will see prices drop year over year as increased capacity and productivity drive down prices at the consumer level. We can start getting actually rich again.

And as we produce again, we can really trade again – it isn’t trade if I send a billion dollars I printed up for Chinese goods. That is just robbery. Trade is when I send China a billion dollars worth of goods and I buy a billion dollars worth of Chinese goods. Trade reciprocity…actual trade. I get this, you get that. Not I get your substandard consumer good and you get my money which you use to buy bonds and political influence over my Ruling Class. The exchange of goods and services is trade…not slips of paper. And it would be honest trade – and if China won’t buy from us because they demand I allow myself to be ripped off, then they are simply barred from my market…which they can’t survive, so they’ll actually have to be honest about it. Sucks to be them. I don’t care.

And here’s something to consider – once you think about it, this all makes sense. Certainly makes more sense than blaming tariffs for the Great Depression when you’re completely ignoring the massive financial, social and material dislocations in the period 1914 forward by war, disease and revolutionary overthrow of long-established nations and relationships. Tariffs certainly didn’t cause the Depression – if they played a role in extending it then this was secondary to all the massive government spending which misallocated resources from economic need to political favor. We’ve been living in an economic dream world since FDR…and in a Free Trade nightmare since Bretton Woods in 1944. Our economy is hollowed out, our technical abilities are atrophied, our people have fallen into welfare dependency and drug addiction…while a certain class is happy to sit back and watch as long as their stocks go up 7% per year. Enough of this. Back to the real world. As Trump said, the operation has been a success…the patient is on the mend. It is going to hurt – but healing from terrible illness and injury always does…but we’re restoring ourselves to health.