• Trump, like Reagan, a Lincoln Republican on Trade  By E.J. Smith
• Why I Read The American Conservative  By Richard C. Young
• 64 People Shot in Chicago  By E.J. Smith
• Clinton, Abedin, Mills—Reckless and Unreliable  By Richard C. Young
• Vermont: No Permit for Open Carry  By Richard C. Young
• Hillary’s Cradle to Grave Dependency State  By Debbie Young
• The United States and China: Who’s Balancing Whom?  By Justin Logan
• EMP Technology in the Hands of Terrorists  By Richard C. Young
• “Best Album of the Year”  By Debbie Young

As you know, some of the best intelligence comes from unexpected places. Recently my client Khushro Ghandhi and I were talking about politics and the market. To say I get an education every time I speak with him would be an understatement, as you’ll soon see. One day, to make his point he said to me “E.J., believe me I know how the left thinks, I was one of them, I’m a reformed Marxist!” That got my attention. I love my conversations with Khushro because what he says is from his heart. He has learned his beliefs from personal inflection, studying, and not being afraid to question “the system.” Here Kushro explains how Donald Trump’s skepticism of the benefits of free trade may not be such a new idea in the Republican Party.

The American System

By Khushro Ghandhi

In a discussion with teachers of American History, the subject of teaching “protectionism” came up. I recommended Pat Buchanan’s book “The Great Betrayal” as the best popular book on the history of American trade policy I know. I myself became aware of this aspect of American history in the seventies well before Buchanan wrote the book, so I can say with some assurance that Buchanan presents the history fairly and is consistent with good scholarship on the matter, though it is certainly a work of advocacy.

When protectionism is discussed, the issue of the “Smoot-Hawley Tariff” usually arises, often described as being a cause of the Depression of the 1930s. Milton Friedman’s work in the 1950s largely laid that ghost to rest: Friedman pointed instead to failures at the Federal Reserve. In fact the U.S. was the most protectionist nation on earth during its period of greatest growth from 1792-1929.

Modern “conservatives” are mostly against protectionism or “neo-mercantilism” and for what they describe as “free trade.” Whatever one may think of the policy it is not “conservative” if by “conservative” is meant the traditional policy of the Republican Party and its predecessors, the Whig Party and the Federalist Party, all three of which were “protectionist.” As far as I can tell, the change on the part of conservatives from protectionism to free trade is first clear in the “new right” of Buckley and National Review in the 1950s, which on this issue at least, was decidedly NOT “conservative” in the sense of traditional Republican Party policy. The reason for the shift? Thinkers of that time, including Buchanan, were impressed with the problem of “big government” typified by Fascism, Communism and the New Deal. In looking back into the roots of American thought on central government they concluded that Jefferson rather than Hamilton had been right on this issue of the danger of centralized government (a point with which I have some sympathy). Consequently, they rejected the Hamilton, Clay, Lincoln tradition of the Republican Party as it had existed until 1930 and adopted a Jeffersonian point of view, which is dominant among conservatives to this day. The question is whether their difference with Hamilton on the dangers of central government should have been extended to the specific issue of tariffs, which practically defined Republican Party economic policy (which could be summarized as free enterprise, internal improvements and tariffs).

In the Nineteenth century the fundamental divide on economic policy was between free trade, which American Whigs called “the British System” and protectionism, which Whigs called “The American System.” The British system was epitomized by the writings of Malthus and Ricardo. The American system, tracing its roots to Adam Smith, was grounded in Alexander Hamilton’s famous “Report on Manufactures,” which he wrote as Washington’s Treasury Secretary and which became policy under Washington and Adams. Jefferson and Madison were initially for free trade (as was the South generally) but both later switched to a nationalist trade position (after the war of 1812). Protectionism was the policy especially of Henry Clay and Lincoln. Key economists in the U.S. who expanded on Hamilton’s writings were Matthew Carey, a Hamilton protégé, and his son Henry Carey who was an advisor to Pennsylvania Iron and Steel interests, who were in turn key to Lincoln’s election (Lincoln’s First Inaugural Address is focused on the tariff at least as much as slavery).

Carey’s work “The Harmony of Interests” (as opposed to the notion of Ricardo and Marx that classes had fundamentally antagonistic interests) is a great book and was extremely influential at the time. It is impossible to distil this work in a few sentences, but the premise is that the world is not one of diminishing resources (Malthus) but the opposite. The interests of industry and labor are ultimately identical in a national system based on protection. A protected market was essential to the growth of nascent industry (protected especially from the British) and to labor which in America was already the highest paid in the world and unprotected could not compete with the cheap European labor–a tariff was essential to put American labor on equal footing with foreign labor. Thus, the Whig and Republican parties, based on protection, were business labor alliance parties. The separation of business and labor into two parties did not become a fixed feature of our political life until FDR.

A young German immigrant, Friedrich Liszt, came to America and studied with Henry Carey. He returned to Germany and became the most influential economist in that country, becoming the mover behind the “Zollverein” or German customs union. Germany under an American inspired protection policy went from a relatively backward economy in the 1840s to become the near industrial equal of Britain by 1914. Japan also, under the Meiji Emperor, consciously modeled their economic policy after the protectionist “national system” of the United States, and went from a quasi-feudal economy in 1865 to defeating Russia in 1905 (turning former Samurai families like Honda, Mitsubishi and Toyota from warrior clans into industrial conglomerates). In all three cases, the U.S., Germany and Japan, the rates of growth achieved were unprecedented.

Whatever one thinks of Donald Trump otherwise, his position is the traditional Republican position on trade.

Which policy is best economically? Naturally, that question can’t be settled here. That a national policy can work is indisputable, as history shows. However, all major schools of economic thought in the post-World War II era believe that free trade is the optimal policy, and this is also a conclusion, a theoretical one, that we cannot possibly settle here. Still, “optimal” for them means optimal for the world economy, not for any one specific national sector. Modern economics, presenting itself as objective and scientific, no longer presents itself as “Political Economy” or “National Economy.” Along with their aspiration for an “objective scientific” status comes an internationalist perspective. Nations, borders and cultures play no role in their calculations by design. Economics is studied as a system of abstract relations between interchangeable people and parts. Even if in theory this is optimal for the world economy, it is quite indifferent to the parts of the world economy which may suffer in service of global optimization. Naturally, those parts may take this a bit more personally than abstract parts ought to, as we are seeing unfold across the western world today.

I will just note the following: in the long run the defining factor in economics is growth and it is hard to argue that trade does not enhance growth. In the short run however, economic models are based on scarcity and equilibrium. It was understood by Carey and Republicans in the nineteenth century that free trade meant lowering U.S. manufacturing output and wages, pure and simple, breaking the social contract between business and labor. Reverting to a simple model of equilibrium, if we have a tank of water divided by a gate, with two different levels of water in each half (wages), then lifting that gate will result in one tank with one water level. The lower will rise and the higher will fall. Supporters of trade restriction today will argue that is precisely what has happened respecting wage levels between the U.S. and China over the last twenty years, and that is what the policies of the Federalist, Whig and Republican parties were designed to avert.

Khushro

P.S. The question of Ronald Reagan’s thinking always comes up in debates among conservatives–a kind of “what would Ronald Reagan do” sort of thinking. Reagan, shaped very much by post- war conservative thought, campaigned as a free trader. However, once in office his administration when confronted with actual trade issues–auto, steel, electronics–split into two factions. On the one side “academic” or “free trade utopians”, and on the other the businessmen, who leaned protectionist. In the end Reagan became the most protectionist president since Hoover. Below is a link to a Cato Institute study of the Reagan record on trade. Note that Cato is libertarian and so is committed to a pure free trade position. The author of the study, pro-Reagan no doubt, complains that Reagan strayed from a pure free trade position, as indeed he did.

Khushro Ghandhi is a C.P.A. specializing in small business and a member of the Board of Directors of Saint Monica Academy, a private Catholic Classical academy. In the early seventies he was a Marxist; his view of Marxian economics was, unusually, opposed to “New Left” and Malthusian interpretations. Marx accepted the conclusions of David Ricardo that Capitalism ultimately lead to stifling “the productive forces” (growth) and concluded that capitalism had to be replaced by socialism for unfettered growth to occur. Ironically, it was studying Marx’s letters and articles in American newspapers that revealed a school of American economists opposed to Marx, Ricardo and Malthus–a school of economics seldom referred to in contemporary debates. After studying nineteenth century “American System” economists he concluded that capitalism as practiced in America was an unsurpassed engine of economic growth, and suffered from none of the “contradictions”  claimed by Ricardo and Marx. By 1980 he was a supporter of Ronald Reagan and a proponent of what would come to be called the “Strategic Defense Initiative.”

In  TAC’s July/August cover story, TAC founding editor Scott McConnell tells readers, “In one form or another, this nationalist-versus-globalist division is being reproduced in almost every country in the West facing the pressure of working-class decline and mass immigration.”

Scott continues, “Trump is obviously part of this pan-Western nationalistic/populist wave, and may be the first to break through in a major Western country.” Below I give you a synopsis of TAC publisher and my Cato Institute-associated friend Jon Basil Utley’s excellent Trump and Washington’s Wars.

For all one’s doubts about Trump, his main appeal is that of restraining Washington’s war machine…. The establishment Republican leadership that Trump is challenging is virtually addicted to perpetual war, while Democrats are so afraid of being called wimpy that they too end up supporting more wars. Just consider how many nations Obama now bombs. Yet Hillary Clinton would be even worse; it was she who pushed Obama into attacking Libya and was an architect of his Syria policy….

Although Trump’s foreign-policy talk is all over the map, he dared to attack the Republican establishment’s consensus support for the Iraq War and, alone among major Republicans, talked of restraint in launching new wars….

Trump’s sheer joy for life, his instinct for “making deals” with enemies, and his desire for rapprochement with Russia would all check the establishment’s dangerous belligerence….

Trump’s threats towards Americans of non-European racial or cultural heritage may cost him the election, unless he is able to convince immigrants, women, and millennials—among all of whom his negative rating is overwhelming—that his policies, compared to Hillary’s, are worth the cost of his personality….

It’s important to remember that presidents are constrained by the separation of powers—except when it comes to starting wars. Congress and the courts would be a brake on his more extreme programs, including trade and immigration…. [Ed. note: In fact Utley contested Trump’s trade views in an earlier article online, Trump’s Trade Deficits.]

Even if a Trump win cost Republicans their Senate majority, that’s not entirely bad. Remember that the worst policies—think the Iraq War and Obamacare—often come about when one party controls both the presidency and Congress….

For all his drawbacks and the constitutional constraints that would limit his power, a President Trump could create some very positive policies:

• Cut defense spending for new wars.
• Demand more European sharing on NATO spending.
• Get Japan and Korea to pay for their own defense.
• Work on an Israel-Palestine settlement.
• Support the Iran nuclear agreement.
• Stop kowtowing to Saudi Arabia’s dictators.

Perhaps only Trump has the strength of will to cut the Gordian Knot in Washington. He may yet crash as a result of his chaotic management style….But today there is no doubt that he threatens the Beltway establishment—and that challenge is what most Americans want. Should he shock everyone by winning in November, we must trust our system of checks and balances to constrain his worst impulses.

I hope you will join me in supporting The American Conservative by becoming a TAC member. Membership starts at just $60 per year and comes with a free print or digital subscription (theamericanconservative.com/membership). Or you can join TAC’s inner circle by becoming a member of the Publisher’s Club, which is open to those who support TAC by giving $500 or more annually (theamericanconservative.com/pubclub). Together we can do our part to help The American Conservative increase its audience and influence.

Warm regards,

Richard C. Young

Chairman, Young Research & Publishing Inc.

64 people were shot in Chicago over the Fourth of July weekend. Where’s the outrage? “Through June, there had already been 315 homicides in Chicago this year, which is a 49% increase over the first half of last year,” writes Jason Riley in the WSJ, author of Please Stop Helping Us: How Liberals Make it Harder for Blacks to Succeed . “The political left’s response to gun violence is typically more gun control, even though the places with the biggest problems tend to sport harsher firearms restrictions, and criminals by definition ignore laws.” The article concludes that there is no link to higher rates of gun ownership to higher rates of gun violence. In other words, guns are not the problem.

Linking higher rates of gun ownership to higher rates of gun violence is quite problematic. According to the Pew Research Center, 51% of rural residents own a firearm, versus only a quarter of city dwellers, but urban areas have much more gun violence. Similarly, only 19% of blacks and 20% of Hispanics report owning guns, versus 41% of whites, yet gun violence among blacks and Hispanics is much more common.

If the overwhelming majority of gun owners in the U.S. act responsibly, is the bigger problem the number of guns or the small minority of irresponsible owners? And if the perpetrators of gun violence are consistently concentrated among certain racial and ethnic groups, isn’t it more likely that culture—say, attitudes toward established authority in general, and officials in the criminal justice system in particular—tells us more about gun violence than the number of firearms in circulation? Alas, the answers to those questions seem to be of little interest to most liberals, even the honest ones.

Pat Buchanan reports to readers, that the three are charged by the FBI as having been reckless and unreliable in the handling of national security secrets.

Comey said he found no criminal “intent” in what Clinton did.

Yet, he charged her with having been “extremely careless” with U.S. national security secrets, a phrase that seems synonymous with the gross negligence needed to indict and convict.

While recommending against prosecution, Comey added, “This is not to suggest that in similar circumstances, a person who engaged in this activity would face no consequence. To the contrary, those individuals are often subject to security or administrative sanctions.”

Translation: Were Clinton still the secretary of state and were such recklessness with secrets to be discovered, she could have been forced to resign and stripped of her security clearance forever.

Yet if Clinton is elected president, our commander in chief for the next four years, and her confidantes Huma Abedin and Cheryl Mills, will all be individuals the FBI has found to be reckless and unreliable in the handling of national security secrets.

We will have security risks running the armed forces of the USA.

The American people, should decide, given all this evidence, if Clinton should be commander in chief. You decide if a public figure with a record of such recklessness and duplicity belongs in the Oval Office.

Comey was making the case against Clinton as the custodian of national security secrets … while refusing to determine her fate by urging an indictment, and instead leaving her future in our hands.

America’s 1st Freedom explains:

Vermont’s unique state constitution is the reason behind its longstanding deregulation of gun rights—such a constitutional safeguard is the best possible way to secure strong Second Amendment rights for future generations.

Last year saw the deregulation of concealed carry—resulting in the removal of any requirement for a permit in order to carry a firearm, and often referred to as “permitless carry” or “constitutional carry”—in Kansas and Maine. Additionally, the legislature in New Hampshire passed a bill allowing the same, which was unfortunately vetoed by Gov. Maggie Hassan. West Virginia and Indiana have more recently seen bills drafted that would recognize “permitless” carry for their residents.

What we witness here is a heartening trend as states across the nation recognize the value of dropping burdensome restrictions on law-abiding citizens. As the deregulation movement picks up steam, many are looking to the example of Vermont, which has never required a permit for open or concealed carry—and enjoys some of the lowest violent crime rates in the country.

More on your family’s protection here.

If a presidential candidate is perfectly willing to compromise national security, up to and including “top secret” information, in order to evade legitimate FOIA requests, doesn’t that seem to disqualify her for seeking to be President? As Francis Menton admits in the Manhattan Contrarian, it is a hard one to top. But Mr. Menton suggests an even more insidious candidate that disqualifies Hillary for President.

Hillary has literally no idea how the economy works.  Like all good progressives, she does not understand that wealth is generated by the hard work of the people in the presence of property rights, freedom of exchange, and the rule of law.  Instead, she thinks that the wealth comes from the tooth fairy; that government taxing and spending is costless; and that it’s up to the government to distribute the free money in a way to create a world of perfect fairness and justice.  The idea that this agenda might have the side effect of undermining incentives and wealth creation and impoverishing the people has literally never occurred to her.

In “A plan to raise American incomes” on Hillary Clinton’s website, here’s what Mr. Menton notes Hillary would do as President:

• First, is there a single place here (or elsewhere on her website) where you can find any recognition that the wealth and success of the United States has come from the hard work of the people instead of from the government?  If there is, I can’t find it.
• “Give working families a raise . . . .” Nothing to it, I guess.  It’s just all free money coming from the government.  Hillary thinks she can make Americans richer by passing out government money.
• “Create good-paying jobs and get pay rising by investing in infrastructure, clean energy, and scientific and medical research to strengthen our economy and growth.”  That’s right, “good paying jobs” in Hillary world are all funded by government spending.  Try to find a counter-example on her website.
• How about the “New College Compact.” Under pressure from the forces of Bernie, Hillary now proposes free college for all, or almost all.  Cost?  $350 billion, according to her website.  Whew!  But don’t worry, it’s all free money.  Does it ever occur to Hillary that with $350 billion to blow, the state universities will just raise their prices and make it all disappear
• Take a moment to focus on that part that says “investing . . . in clean energy.” Recognize that the government does not need to invest a dime in energy for the U.S. economy to provide all the energy that it uses at the lowest cost that anyone can find.  “Investing in clean energy” is obvious code for spending government dollars to subsidize environmentally-correct renewables produced by government cronies at uneconomic cost.  This is what competent economists call “wealth destruction.”  Does Hillary know or understand that government subsidies to uneconomic businesses destroy the wealth of the people and the country?

The millennial voters whom Hillary Clinton is trying to bribe don’t seem to realize they’ll pay for “free” college and “free” everything else for the rest of their lives, writes the WSJ.

As debt and entitlements increase as the baby boomers retire, there aren’t enough millionaires to soak. The politicians will have to raise taxes, and probably severely, on millennials as they reach their peak earning years. Mrs. Clinton’s proposal amounts to a giant national student loan to be repaid with future taxes.

American defense officials, in their less guarded moments, will concede that the central object of U.S. defense posture in East Asia–and indeed Asia as a whole–is to “balance” China. What they don’t realize is what this statement reveals about their own thinking.

The balance of power is a hoary concept in international politics. From Macchiavelli to Fénelon to Waltz and forward, the idea has been that states seek to prevent other states from growing so strong that they could dominate part or all of the international system. Many scholars have suffered some positive/normative slippage, moving from describing a balance of power to infusing the balance of power with some independent moral force over international politics.

But for our purposes, in international relations jargon, “balancing” another state means either allying with other states to offset its power, or developing one’s own military power to prevent it from achieving dominance.

This is not what Washington is doing with respect to China. It is what Beijing is trying to do with respect to the United States.

That is because balancing is the act of a weaker state confronted with a stronger state. China is, by any measure, including its own, the weaker state in the dyad. To put it bluntly, no rational Chinese policymaker prefers his position to that of his U.S. counterpart. For all the talk about growing Chinese A2/AD (anti-access, area-denial) capability, for all the hysteria about the sequester and the moderate haircut the U.S. military budget has taken over the past few years, the United States and its allies continue to dominate East Asia. China is reduced to attempting to push out past two so-called “Island Chains” in the sea surrounding it.

The short version is, as it has been for years, that China could cause big headaches for any country operating between China’s shores and the first island chain. Between the first and second island chain, China would run into real problems if faced with an adversary equipped with modern weaponry, and outside the second island chain China would have very little impact on a military skirmish. (The long version is here.)

However, flip the table and imagine if American defense planners were struggling to come up with new, innovative ways to ensure that they could dominate the sea between Florida and Cuba. The idea is unthinkable. We certainly wouldn’t say that the foreign power that dominated our hemisphere was simply trying to “balance” our growing power. We’d say we were trying to balance it.

American defense planners are lying: to themselves, to China, and to other countries in the region when it comes to their intentions in East Asia. The danger is actually less that China or other countries will believe their lies, and more so that the Americans will believe the lies they tell themselves. China’s behavior will become even more bewildering unless U.S. defense planners have a clear-eyed view of what China–and we–are up to.

Arizona Rep. Trent Franks provides warning on Obama and his “faculty lounge advisors” ongoing efforts to dismantle our Missile Defense capabilities.

The Obama Administration continues to ignore the growing, existential threat posed by Electromagnetic Pulse (EMP) technology in the hands of a terrorist enemy such as Iran and ISIS or in the hands of a more conventionally armed but equally psychotic North Korea.

The U.S. electric grid could be completely hardened with a minimal investment.

Obama and his faculty lounge advisors have spent the past seven years unilaterally dismantling our Missile Defense capabilities.

Under Obama, the threat trajectory is growing, not shrinking, and the number of enemies has grown longer, not smaller.  It is imperative that Congress push back against the Administration’s reckless abandonment of our strategic Ballistic Missile Defenses.

The threat from civilization-destroying weapons is greater than at any point in our Nation’s history as Islamist terrorists run riot throughout the world.

Click to my series of posts on the serious risks posed to American by a terrorist attack on the grid.

For a greater understanding, read these posts on the EMP threat at Richardcyoung.com:

1. EMP Threat: Be Prepared
2. Boom—Your Life Changes
3. EMP Threat: Cuba Ships North Korea Missile Components: Is a SCUD in a Bucket Next?
4. EMP Attack: No Power for Two Years
5. EMP Attack: When the Lights go Out

You won’t believe what you’re reading. A bunch of rappers and activists, whose careers and rhetoric are often violent and divisive, were the guests of President Obama at the White House on 15 April. The highlight was when rapper Rick Ross’s (a.k.a. William Roberts) ankle bracelet went off—as in beeping—during the event. Why an ankle bracelet? Ross had been arrested for allegedly pistol-whipping a man who had been doing repair work on his house. He was also charged with kidnapping when he prevented the alleged assault victim from leaving his property. Ross also is known for these delightful lyrics from his “U.O.E.N.O. song (which he apologized for after losing his Reebok endorsement deal): “Put molly all in her champagne/ She ain’t even know it  / I took her home and I enjoyed that / She ain’t even know it.” Ironically, the April 15 event was meant to encourage black youths to stay on the right side of the law. In NRO, Victor Davis Hanson reports:

Rapper Rick Ross — on bail pending trial on kidnapping and assault charges — had his ankle bracelet go off at a White House ceremony. Black Lives Matter and Ferguson activist Charles Wade abruptly declined his White House invitation, apparently because he had been recently arrested for pimping and human trafficking. Marquee rapper Kendrick Lamar’s Pimp a Butterfly album cover portrayed black men hoisting champagne bottles and displaying hundred-dollar bills on the White House lawn, in merriment over the corpse of a white judge with his eyes X’d out. Reality mimicked art when Lamar (whose video sets include singing from a vandalized police car) was invited to the White House — or perhaps when five fatally shot policemen on the ground in Dallas superseded Lamar’s image of a prone and eyeless dead judge. Obama, remember, has cited the police-hating Lamar (e.g., “And we hate Popo, wanna kill us dead in the street for sure, nigga”) as his favorite rapper and the dead-judge album “as best album of the year.”

President Obama, ever since he first appeared on the national political scene in 2008, has systematically adopted a rhetoric and an agenda that is predicated on dividing up the country according to tribal grievances, in hopes of recalibrating various factions into a majority grievance culture. In large part, he has succeeded politically. But in doing so he has nearly torn the country apart. Indeed, it is no exaggeration to suggest that no other recent president has offered such a level of polarizing and divisive racial bombast.

When Obama invited Black Lives Matter founders to the White House in February, he praised them by asserting that they were “much better organizers” than he had been at a comparable age, adding that he was “confident that they are going to take America to new heights.” Prior Black Lives Matter marching death chants to police should have been known to Obama at the time.

Under President Obama’s administration, “America has become a society that celebrates separatism and violence and that pardons the venom of Black Lives Matter and its more extreme manifestations, or that exempts Hillary Clinton from all legal accountability…” Perhaps America no longer is able “to exercise a position of world moral authority after all,” writes Mr. Hanson.