Michael Lind and the tariff advocates are delusional when they say tariffs will get manufacturing to come back to the United States

During the heyday of American tariffs, tariff revenues were tiny and went to fund a tiny federal government.

From 1880 to 1910, federal spending grew from about $300 million nominal to $800+ million, and tariff revenues more or less tracked it to pay those bills.

 

At the same time the rich risked their own money to build US manufacturing, and the tax code was uniquely arranged to reward them for it.

To put it simply, until Reagan we taxed ordinary income at high marginal rates, while income from long term capital investment received relatively preferential tax treatment. That investment translated directly into American manufacturing, higher-paying American jobs, and robust economic growth.

High marginal ordinary income tax rates, which dominated the tax code from WWI except during the roaring 1920s, were first brought down by JFK to 70% from 91%, then to 50% by Reagan I, and finally to 28% by Reagan II. Democrats subsequently lifted these into the high 30s where they are now. 

Capital gains rates of 25%, which persisted throughout the period, suddenly lost much of their appeal because the spreads closed. The new arbitrage which opened up because of globalization was between costly labor at home and cheap labor abroad, which the rich then exploited to get even wealthier.

For those of us who lived through this period, it was accompanied by the constant drum beat of one business after another closing up its domestic operations and moving them abroad, leaving a steady stream of workers behind who were forced to find usually less well paying work here.

We did this to ourselves and called it conservatism. 

Michael Lind here is delusional about how to turn back this clock:

Tariffs — taxes on imports — are a means to the end of “reshoring” manufacturing in America. By making some imports more expensive, Trump hopes to expand the market for those products at home for American manufacturers.

Apart from not working (!), this makes the consumer pay the bill instead of placing the risk where it belongs, with the capitalists, who have the capital!

You will never accomplish with tariffs, whose arena is now much too small, what you can with the stick of high ordinary income tax rates, high capital gains taxes on income from US investment abroad, and the carrot of relatively lower capital gains taxes on income from domestic investment.

We need to attract capital back to the United States and give it preferential treatment in the tax code while penalizing in a relative way the income received from foreign sources and from high ordinary incomes received at home.

Ordinary incomes up to $101,082/$134,776 single/married-filing-jointly in Sep 2026 should be free of federal tax, but anything higher should be progressively and steeply taxed.

Capital gains tax rates should follow the reverse course: steep taxes on income from capital held up to a year, and progressively lower taxes on income from capital held 2, 3, 5, 7, 10, 20, and 30 years.

In such a tax environment, corporate taxes would be redundant, unnecessary, and counterproductive. 

Meanwhile 10 years of the Trump tariff regime are not working to revive domestic manufacturing, and the long term comparison with the pre-Reagan past remains negative.

 

Back when illegal immigration was a club for Paul Krugman to use against George W. Bush he made arguments he's now trying to hide

Many of the worst-off native-born Americans are hurt by immigration, especially from Mexico. Because Mexican immigrants increase the supply of less-skilled labor, driving down the wages of the worst-paid Americans. ...

It’s intellectually dishonest to say, as Bush does, that immigrants do ‘jobs that Americans will not do.’ The willingness to do a job depends on how much that job pays, and the reason some jobs pay too little to attract Americans is competition from poorly paid immigrants.

More in Krugman vs. Krugman: New York Times columnist tries to memory-hole his prior views on immigration by Michael Lind

Michael Lind is right: American progressives should thank libertarians for hijacking American conservatism

From a perceptive (because he agrees with me) obituary for economic conservatism in Salon, here, by ex-neocon Michael Lind:

In today’s debate about the economy, populist liberals, centrist neoliberals and libertarians are represented. One group is missing from the American economic debate: economic conservatives.

The economists and economic pundits who are usually described as “conservatives” in the U.S. are really libertarians, or, if they are more moderate, right-neoliberals. While genuine conservatives are anti-utopian in temperament, most right-wing economists in the U.S. [today] share the utopian belief that many if not most public services and publicly regulated utilities can be replaced with competitive private markets. ...

The once-influential conservative historian Russell Kirk dismissed libertarians as “chirping sectaries” and declared that any genuine conservative would sooner be a socialist than a libertarian. From Kirk’s Burkean conservative perspective, libertarians or classical liberals were crazed, hyper-rationalist, utopian radicals, like Marxists.

Conservatism Has Always Been Counter-Revolutionary

A frequent MO of the left is to substitute its own definition of something for the real thing, and then argue against it. Otherwise called setting up a straw man. Words mean whatever they say they mean.

That's what Michael Lind has done to Russell Kirk over at Salon.com.

A commenter on his "The three fundamentalisms of the American right: How conservatism went from orthodox and traditional to radical and counter-revolutionary" here gets it exactly right:

The stupidity is also amusing for the way Lind telegraphs his punch in the title, since Russell Kirk, channeler of Burke, consistently advocated for the counter-revolutionary interpretation of the American Revolution throughout his career. More than that, he thought that his own interpretation of the American Revolution as a revolution not made but prevented was entirely consistent with E.J. Payne's interpretation of the Burke who famously loathed what became of France's revolution. Kirk lays out his interpretation in this famous essay, stating from the start his indebtedness to Payne for the idea:

The most learned editor of Burke’s works, E. J. Payne, summarizes Burke’s account of the events of 1688-89 as “a revolution not made but prevented.” Let us see how that theory may be applicable to North American events nine decades later.

On this interpretation, the King of England was the revolutionary, against whose red-coated infringers on the chartered rights of Englishmen the American colonists reluctantly and at length opened fire with more than just words.

Lind would like things to be as they once were, when conservatism was still inchoate, unsure of itself, and above all, politically ineffectual:

Back when conservatism was orthodox and traditional, rather than fundamentalist and counter-revolutionary, conservatives could engage in friendly debates with liberals, and minds on both sides could now and then be changed.

But now that conservatism is a genuine threat to the revolutionary left which has taken control of America, it's time to sound the alarms:

Sooner or later, dogmatism and reality will collide, and it is not reality that will crumple like tinfoil. The only question is how much damage will be done to the American polity before the revolution of the saints fizzles out.

"Collide." "Crumple." "Damage." Sounds more like an invitation to a train wreck than to a battle, but I could be wrong.

Round one to the right last November. More skirmishes to follow.