SD enterprise: America’s Political Poison

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Have you heard about the Tariff of Abominations? No, not President Trump's extreme economic plan that tanked the stock market this week, but an earlier episode of U.S. policy folly. Charles P. Pierce is here to explain the connection between the two. Ordinarily, Last Call is reserved for Esquire members only. But for a limited time, we're giving all newsletter subscribers the weekly long read from Pierce, one of America's foremost political pundits.

Today, Charlie explores how tariffs have been a volatile political issue in America going back to the nation's founding. As in his daily blog posts on Esquire.com, the piece is infused with historical context and his signature irreverent humor. We hope you enjoy Charlie's newsletter and consider supporting Esquire's commitment to quality journalism. —Brian O'Keefe, Executive Editor

America's Political Poison

Let the president explain how tariffs work, and why they simply are a form of taxation laid upon you.

But our present tariff laws, the vicious, inequitable, and illogical source of unnecessary taxation, ought to be at once revised and amended. These laws, as their primary and plain effect, raise the price to consumers of all articles imported and subject to duty by precisely the sum paid for such duties.

Thus the amount of the duty measures the tax paid by those who purchase for use these imported articles. Many of these things, however, are raised or manufactured in our own country, and the duties now levied upon foreign goods and products are called protection to these home manufactures, because they render it possible for those of our people who are manufacturers to make these taxed articles and sell them for a price equal to that demanded for the imported goods that have paid customs duty. So it happens that while comparatively a few use the imported articles, millions of our people, who never used and never saw any of the foreign products, purchase and use things of the same kind made in this country, and pay therefor nearly or quite the same enhanced price which the duty adds to the imported articles. Those who buy imports pay the duty charged thereon into the public Treasury, but the great majority of our citizens, who buy domestic articles of the same class, pay a sum at least approximately equal to this duty to the home manufacturer. This reference to the operation of our tariff laws is not made by way of instruction, but in order that we may be constantly reminded of the manner in which they impose a burden upon those who consume domestic products as well as those who consume imported articles, and thus create a tax upon all our people.

It is not proposed to entirely relieve the country of this taxation. It must be extensively continued as the source of the Government's income; and in a readjustment of our tariff the interests of American labor engaged in manufacture should be carefully considered, as well as the preservation of our manufacturers. It may be called protection or by any other name, but relief from the hardships and dangers of our present tariff laws should be devised with especial precaution against imperiling the existence of our manufacturing interests. But this existence should not mean a condition which, without regard to the public welfare or a national exigency, must always insure the realization of immense profits instead of moderately profitable returns. As the volume and diversity of our national activities increase, new recruits are added to those who desire a continuation of the advantages which they conceive the present system of tariff taxation directly affords them. So stubbornly have all efforts to reform the present condition been resisted by those of our fellow-citizens thus engaged that they can hardly complain of the suspicion, entertained to a certain extent, that there exists an organized combination all along the line to maintain their advantage.

The president takes great pains there at the end to point out that tariffs so benefit the wealthier citizens that the rest of them can be excused if they think the whole economic system is rigged, which it was. He went on with a warning.

Opportunity for safe, careful, and deliberate reform is now offered; and none of us should be unmindful of a time when an abused and irritated people, heedless of those who have resisted timely and reasonable relief, may insist upon a radical and sweeping rectification of their wrongs.

That sounds bad.

The year was 1887 and the president was Grover Cleveland–who is, we should note, the only other president to serve two non-consecutive terms. It remains an altogether remarkable State of the Union speech in that it is dedicated entirely on one subject during peacetime. Because of its tariffs on foreign imports, the U.S. government was running what Cleveland believed was a dangerously high surplus, while most of the people in the country were paying through the nose for imported goods.

The simple and plain duty which we owe the people is to reduce taxation to the necessary expenses of an economical operation of the Government and to restore to the business of the country the money which we hold in the Treasury through the perversion of governmental powers. These things can and should be done with safety to all our industries, without danger to the opportunity for remunerative labor which our workingmen need, and with benefit to them and all our people by cheapening their means of subsistence and increasing the measure of their comforts.

Cleveland's efforts to "reform"–which is to say, lower–the tariffs came a'cropper in the Congress. In the House, the Republican opposition to reform was led by Rep. William McKinley, the ranking minority member on the Ways and Means Committee. The House passed the reform package but with the elections of 1888 looming, the bill died in the Republican-controlled Senate. In 1888, however, Republicans won control of both houses of Congress and Benjamin Harrison was elected president, defeating Cleveland who, of course, came back in 1892 and returned the favor. In both elections, a tariff was the driving issue. In 1888, the Republicans won big because of their opposition to Cleveland's efforts at reform. Four years later, Cleveland beat Harrison largely because of the effects of the Tariff of 1890, also known as the McKinley tariff. That worked out so well that, in the 1890 midterm elections, the Democrats beat the Republicans to a pulp with it, taking over the House again.

Historically, then, running the government on the basis of tariffs is to give it the political equivalent of St. Vitus Dance. History indicates that it certainly does nothing to ensure stability and, moreover, it probably undermines not only popular confidence in the national economy, but also popular confidence in the stability of the government itself. I believe presidents Cleveland, Harrison, and Cleveland (again) believed this to be a kind of byproduct. I don't think any of them sought instability as a strategy. I am less sure that the current president feels the same way.

The year was 1887 and the president was Grover Cleveland–who is, we should note, the only other president to serve two non-consecutive terms.

Outside of slavery, and for a lot of the same philosophical reasons, tariffs were the most volatile political issue in the years between the founding of the nation and the Civil War. The most serious threat to the Union prior to Fort Sumter came in 1832 as a response to the Tariff of 1828—which came to be known, melodramatically, as the Tariff Of Abominations. That same year, John C. Calhoun published his Exposition and Protest, an assault on the tariff in which Calhoun for the first time explicated the doctrine of nullification.

If it be conceded, as it must be by every one who is the least conversant with our institutions, that the sovereign powers delegated are divided between the General and State Governments, and that the latter hold their portion by the same tenure as the former, it would seem impossible to deny to the States the right of deciding on the infractions of their powers, and the proper remedy to be applied for their correction. The right of judging, in such cases, is an essential attribute of sovereignty, of which the States cannot be divested without losing their sovereignty itself, and being reduced to a subordinate corporate condition. In fact, to divide power, and to give to one of the parties the exclusive right of judging of the portion allotted to each, is, in reality, not to divide it at all; and to reserve such exclusive right to the General Government (it matters not by what department) to be exercised, is to convert it, in fact, into a great consolidated government, with unlimited powers, and to divest the States, in reality, of all their rights, it is impossible to understand the force of terms, and to deny so plain a conclusion.

This caused some agita in the Executive branch, since Calhoun was Andrew Jackson's vice-president at the time. (The paper was published anonymously, but Calhoun's authorship was an open secret.) Jackson, for all his faults, was a staunch Unionist, believing that the Constitution was derived from the people, and that it was not a compact between states. Jackson pulled out every stop. Calhoun based much of his theory on the Kentucky and Virginia resolutions that had challenged the Alien and Sedition Acts under President John Adams. In response, Jackson brought out of the bullpen no other than James Madison, who repudiated what he claimed was Calhoun's misappropriation of his work on those old measures.

In 1830, the fight over the tariff and nullification famously hit the Senate, with Senator Robert Hayne in support of the doctrine and Senator Daniel Webster rising to reply, in an encounter so famous that it is specifically cited on the plaque outside of the old Senate chamber in the Capitol. Webster presciently saw how nullification would lead, inevitably, to civil war. His peroration is one of the Senate's most famous rhetorical passages.

Nor those other words of delusion and folly, 'Liberty first, and Union afterwards' but everywhere, spread all over in characters of living light, blazing on all its ample folds, as they float over the sea and over the land, and in every wind under the whole Heavens, that the other sentiment, dear to every American heart- Liberty and Union, now and forever, one and inseparable!

Webster's appeal was to the idea of government as a defense against chaos. I don't think he ever anticipated that a president of the United States would find in chaos a political advantage.