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Exposing the Hidden US History Fueling Tariffs, Shutdowns, and National Breakdown

by Yves Smith
October 24, 2025
in Finance
Reading Time: 12 mins read
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Yves right here. Most nations and peoples have interaction in flattering myth-making. However the distinctive US could also be distinctive right here within the diploma to which we whitewash our historical past and the results of acing on these nationwide myths.

By Lynn Parramore, Senior Analysis Analyst, Institute for New Financial Considering. Initially revealed on the Institute for New Financial Considering web site

In his new e-book Difficult the Myths of U.S. Historical past, historian Marc Egnal takes intention on the tales People like to inform themselves — on each the correct and the left.

He argues that America’s path has been formed much less by summary beliefs and extra by the financial and territorial ambitions of the higher class. Racism, he says, wasn’t an unlucky byproduct, however deeply woven into that drive for enlargement. Egnal takes intention at each ends of the political spectrum: he challenges MAGA efforts to whitewash the uglier elements of historical past, but additionally critiques the “liberal synthesis” — the acquainted story that admits previous wrongs however nonetheless frames the U.S. as steadily marching towards freedom and progress.

Egnal’s tackle U.S. historical past lays naked the roots of in the present day’s chaos — political dysfunction, rising violence, Trump’s endurance, and the financial pressures Democrats maintain lacking. In a dialog with the Institute for New Financial Considering’s Lynn Parramore, he breaks down how the previous nonetheless drives the battles shaping America now.

Lynn Parramore: You argue that America’s growth was pushed much less by summary beliefs like liberty and extra by the financial pursuits of its elite — particularly their pursuit of progress and enlargement. How does this problem the narrative of American exceptionalism?

Marc Egnal: American exceptionalism meshes properly with the “liberal synthesis,” the story that folks study at school. The USA, like many nations, has its personal myths. The U.S. myths return to the “Metropolis on a Hill” and John Winthrop — the entire concept that it stands alone, aside from different nations. The nation’s historical past, because it’s taught and understood, actually circulates round these myths.

Textbooks reinforce this outlook and level to a couple high-minded paperwork as the important thing to America’s previous. The Declaration of Independence is ennobled, the Gettysburg Deal with is widely known. These dots are linked to form the narrative of the USA as a rustic guided by excessive beliefs, extra so than different nations are. It’s the nation of the Statue of Liberty.

Whereas that’s not an absolute fabrication, it is a fable. It’s not the substance of what really went on.

LP: You stress that historians ought to floor their work in proof, not political agendas. How does that precept apply to in the present day’s debates over how colleges train historical past, particularly on race, inequality, and nationwide identification?

ME: Beginning within the Sixties and persevering with into the Nineteen Nineties, the liberal synthesis emerged. That’s the concept America has confronted issues in areas like race, overseas coverage, inequality, and the place of girls, however little by little, progress prevailed. We’ve addressed these points by two waves of feminism, the Civil Rights Motion, and so forth.

LP: The arc of the American story bends towards justice.

ME: Precisely. I provide a critique of that retelling from one perspective, whereas MAGA and Trump method it from a really completely different one. What angers MAGA is the uncomfortable incontrovertible fact that America had points as nasty as racism and slavery, and that many Southerners (and others) actively defended it.

The demand that we settle for, and even honor, Accomplice leaders and title navy bases after them is their response to that historical past. They brush apart insurrection and racism. However should you take a look at skilled historians — the members of the Group of American Historians or the American Historic Affiliation — nearly uniformly, they reject the MAGA/Trump perspective as a distortion of the previous.

On the similar time, I argue that the liberal synthesis has its shortcomings too.

LP: Let’s discuss these limits. Take the Civil Warfare — how does the liberal synthesis clarify its causes and what both sides was combating for? The place does it fall quick?

ME: The liberal synthesis sums up the reason for the Civil Warfare in a single phrase: slavery. It’s primarily framed as an ethical battle. The North opposed slavery on moral grounds, whereas the South defended it. The battle is seen as the results of a basic ethical disagreement between the 2 sides.

Overwhelmingly, skilled historians adhere to that view. They reject the state’s rights clarification. I don’t settle for the state’s rights view both, however the concept the North went to battle due to an ethical revulsion towards slavery doesn’t stand as much as the information. The abolitionists had been a small, reviled group within the North. And when the North went to battle in April 1861, Lincoln was keen to just accept a thirteenth Modification — not the one we all know that ended slavery, however one that might have constitutionally protected slavery the place it already existed.

LP: And assist for slavery wasn’t confined to the South — many New Yorkers are shocked to study that town’s mayor as soon as advocated secession, given town’s deep monetary ties to the South, particularly by the cotton commerce.

ME: Sure. instance of the play of financial pursuits.

LP: You level out {that a} key purpose of the North within the Civil Warfare was to construct a powerful, federally-backed industrial state. Is that mission remains to be shaping our politics and economic system in the present day?

ME: Completely. Understanding the Civil Warfare as pushed extra by financial targets than by a dedication to ending slavery helps us see how these priorities nonetheless form American politics and the economic system in the present day.

Whereas emancipation turned a wartime technique — by the preliminary and last Emancipation Proclamations — the North was by no means deeply dedicated to Black rights. Regardless that 90% of free Black individuals lived within the North, most northern states denied them the correct to vote, besides in elements of New England. That lack of dedication made it simple for the North to desert Reconstruction.

Racism was intertwined with the North’s targets of financial and territorial enlargement. From the founding of the nation, the Structure was a compromise with slave states. And through and after the Civil Warfare, the North prioritized constructing a powerful industrial nation over securing rights for Black People.

After the battle, the northern-led Congress shifted focus: federal troops had been withdrawn from the South and redeployed westward towards Native People, and later into cities to suppress labor actions. The earnings tax used to fund the battle, one of many few progressive measures, was repealed, however large federal spending continued for railroads and infrastructure. Freed individuals acquired nearly no land, whereas railroads had been granted tens of millions of acres.

There are placing quotes from African People on the time, noting that there was nothing for them, however the whole lot for the Union Pacific Railroad. That legacy nonetheless echoes within the construction of our politics and economic system in the present day.

LP: See any parallels between the historic use of federal troops to serve elite financial pursuits and what we’re witnessing in the present day?

ME: Effectively, the motion of troops into Los Angeles or Portland or Chicago just isn’t there for financial progress. It’s there due to an animus in the direction of sure individuals. There are continuities and contradictions. Throughout Reconstruction federal troops protected the freedpeople. Beneath Trump, the federal presence is directed towards immigrants who don’t have full citizenship, even when they’ve been within the nation for many years, and are law-abiding, tax-payers with American-born youngsters.

LP: May that animus towards sure individuals in the end serve the pursuits of the rich in the present day?

ME: Good query. I really see Trump as a departure from the financial methods of each Democrats and Republicans earlier than him. For many years, you possibly can argue that a lot of what was occurring, regardless of the issues, nonetheless tied again to selling financial progress. However with Trump, that connection breaks down.

Take race, for instance. I don’t suppose Trump’s insurance policies on race or immigration really additional progress.

His tariffs, as an illustration, haven’t helped the economic system. His aggressive stance on immigration has seemingly harm it. Similar with the path of his tax insurance policies. So in contrast to earlier intervals, the place elite pursuits and financial enlargement had been clearly linked, underneath Trump that hyperlink turns into a lot tougher to see.

LP: So that you suppose that the story of American progress and enlargement is taking a flip?

ME: It has undoubtedly taken a flip. I’m normally one of many first to search for financial motives behind overseas and home coverage, and you will discover them all through a lot of U.S. historical past. If we’re speaking about FDR, TR, or many different presidents, their actions usually aligned with selling financial progress and nationwide energy.

However with Trump, a lot of what he does runs counter to that. His insurance policies continuously contradict the very targets that might strengthen America economically.

LP: What about insurance policies which will harm the broader economic system however might profit a small, well-connected group? Some would possibly level to crypto for example.

ME: It actually very a lot advantages the Trump household, and it’s a part of this rising divergence between what’s good for the nation economically and what advantages a small, rich phase of society.

Take a conventional firm like Normal Motors. I’m in Canada, and as we Canadians know, auto elements and autos cross the border repeatedly — typically a dozen occasions backwards and forwards throughout manufacturing. Trump’s insurance policies harm producers on either side of the border. When tariffs increase the price of aluminum and metal, they disrupt that circulation and once more harm producers.

CNN not too long ago ran a sequence interviewing small enterprise homeowners, and nearly all of them stated the tariffs are damaging. They will’t supply supplies affordably, and it’s hurting their backside line.

Trump is a traditional populist. He’s gained sturdy assist from a lot of the working class and fewer rich People, by racial and ethnic appeals, however his precise insurance policies harm them and favor a slender slice of the elite — one other hallmark of populism.

Have a look at the Trump household — Kushner, for instance. He’s not simply over there engaged on Center East brokering diplomatic offers; he’s additionally looking for individuals just like the Witkoffs and the Kushners themselves. It’s traditional fashionable populism: broad working-class assist, however actual advantages flowing to a small group on the prime.

LP: Is that basically a break from U.S. historical past? Haven’t we seen cronyism earlier than?

ME: We’ve got seen cronyism earlier than, no query. Within the nineteenth century, for instance, tariffs helped industrialists like Carnegie and supported the expansion of key sectors like metal and railroads. So sure, there have been favors and insider benefits.

However I feel what’s completely different with Trump is the narrowness of the circle that advantages. It’s not about constructing a nationwide industrial base — it’s about rewarding a small group of private allies. You see it in who reveals up at his inauguration, who will get entry, who advantages. It feels much less like nationwide financial technique and extra like a non-public community of loyalists.

LP: Let’s discuss extra about who America’s story leaves behind, and what occurs after they attempt to push ahead. You focus on the Sheppard-Towner Act of 1921 — a form of precursor to Social Safety for ladies and youngsters —that was labeled “socialist” and repealed by 1929. What does this reveal concerning the limits of social applications in U.S. politics, particularly for ladies and households?

ME: The demise of that welfare measure displays deep resistance to federal intervention, particularly after the primary Pink Scare. Sheppard-Towner, which supported maternal well being, was remarkably progressive for its time, however it triggered fears of “large authorities” — just like the backlash we see in the present day, backlash that’s taking part in out within the authorities shutdown.

Social applications at each stage face pushback. We noticed it with Truman’s push for common healthcare, with the ACA, and even now, in debates over Medicaid enlargement. And that resistance usually has a racial and gendered dimension.

The divisions are deep and interconnected, chopping throughout race, gender, and area. Have a look at the nineteenth Modification granting girls the correct to vote: Western states ratified it early, Southern states resisted. At the moment, lots of the similar states nonetheless haven’t expanded Medicaid, regardless of overwhelming federal assist.

LP: You argue that white Christian identification is central to MAGA. Why do you see that because the core, quite than financial points like job loss or globalization, which others emphasize?

ME: In 2016, Trump stood out, not for his financial insurance policies, however for interesting to voters with sturdy anti-Black and anti-immigrant views. His base was energized by that rhetoric, in contrast to the tepid assist for Cruz or Rubio.

Financial points mattered, however they didn’t unify the MAGA base. Many who appreciated Obama’s financial insurance policies weren’t drawn to Trump for that cause.

His message centered on constructing a wall, banning immigrants, and utilizing inflammatory language. In 2024, financial points had been the frosting on the cake, and within the wake of the Biden inflation, it was a really tasty, engaging frosting. He strengthened and enlarged his assist by providing easy options — chopping taxes, elevating tariffs, and expelling immigrants. These insurance policies don’t actually work, however they spoke to individuals in financial ache. Their failure is now resulting in a falling off within the assist from independents.

Democrats, against this, have failed to handle financial ache.

LP: Trump’s assist amongst Black voters practically doubled from 2016 to 2024. One survey confirmed 1 in 4 Black males underneath 50 backing him, and 9% of Obama voters switching to Trump. How do you clarify that?

ME: It’s complicated, however a key cause is that Democrats deserted working-class voters, together with Black and Hispanic males. In a telling interview I listened to throughout the 2024 marketing campaign I heard a Las Vegas resort employee say, “What do Democrats provide me? I can’t afford groceries or a house, and I don’t hear options.”

Even when Trump’s insurance policies are BS, he spoke to their financial misery, one thing Democrats didn’t do. For the primary time, a majority of Hispanic males voted Republican, and extra Black males shifted too, interesting to financial considerations.

LP: Why haven’t Democratic leaders linked with these financial points?

ME: Since 1972, Democrats moved away from unions and working-class focus. That 12 months’s conference set quotas for race and gender however ignored labor. Carter and Clinton pushed the social gathering towards elites. Now, it’s a celebration of the wealthier third, largely college-educated of us who usually can’t relate to the working class. Bernie Sanders summed it up: “No surprise the working class deserted us — we deserted them.”

LP: There’s sturdy public assist for Sanders-style financial fundamentals, additionally mirrored in backing for NYC mayoral candidate Mamdani’s affordability message. There’s additionally curiosity in Ezra Klein’s “abundance agenda,” specializing in rising the economic system and increasing middle-class alternatives quite than simply affordability. How do you see these two approaches from Democrats?

ME: I get pleasure from listening to Ezra Klein, however his abundance agenda primarily speaks to center and upper-middle-class Democrats, counseling them to maneuver away from NIMBYism and facilitate the development of infrastructure and housing. To make sure, these are worthwhile targets. However they don’t handle the deep inequalities that burden society. The actual points are rising inequality, persistent racism in schooling and healthcare, and tax breaks for the rich. Extra infrastructure initiatives gained’t remedy these.

LP: Are the affordability and abundance concepts mutually unique?

ME: No, however affordability tackles extra basic issues. To win again working-class voters, Democrats have to focus there. Center and upper-class progressives like Ezra Klein gained’t disturb the rich, however progressives like Mamdani, who push for taxing billionaires, do. It’s disgraceful that Chuck Schumer and Hakeem Jeffries maintain their distance from Mamdani, regardless of his broad attraction and skill to enlarge the Democratic voters. I applaud these congressional leaders’ emphasis on Medicare and Medicate on this shutdown. It’s an necessary, however nonetheless a timid first step.

LP: What would going additional seem like?

ME: It will imply uniting behind housing, medical care, and different affordability points which might be necessary to 90% of the American inhabitants. It will imply not being content material to run on a platform that merely says, “We’re not Trump.” Word that the U.S. spends extra per capita on well being than any rich nation however has worse outcomes.

LP: What do you make of Trump’s present deal with drug costs, just like the “most favored nation” rule and TrumpX web site? His discuss on this resonates with many individuals.

ME: It’s largely bluster. He stated related issues in 2016 and by no means adopted by. Occasional populist discuss from politicians disappears shortly.

LP: Do you suppose minimizing the function of financial energy and wealth has blinded us to how politics actually works?

ME: Completely. It causes many historian to embrace an optimistic, teleological view of progress that ignores ongoing inequalities. I need to be optimistic, however it overlooks current realities.

LP: There’s clearly an emotional part to myths— individuals need to take pleasure of their nation and really feel defensive when confronted with harsh realities. How do you reply to that?

ME: There’s actually a proud custom of resistance within the U.S.: abolitionists, civil rights, the ladies’s motion, LGBTQ+ rights, labor — all have made actual features, although these features face ongoing challenges.

Oppressive constructions and resistance coexist. We stay a racist society, and a society the place sexism is pervasive. Simply take a look at the sewer of content material that reveals up on X, 4chan, and different social media platforms.

Nonetheless, nobody ought to get so discouraged that they cease struggling. A technique of taking a look at American historical past — and this might be a unique e-book, however a believable one — is to deal with how lengthy and onerous individuals have fought to make issues higher. In my e-book, you possibly can see how highly effective the forces are which have supported an oppressive establishment. However I’m optimistic within the sense that we have had these protest actions. Folks have executed unimaginable issues. Coalitions have pushed society and the economic system towards extra inclusivity. That offers me hope.

However sure, I’m practical about how onerous it’s to maintain on to these victories — how fierce and entrenched the opposition is.

LP: Sure. And we are able to by no means, ever take these victories as a right.

ME: We by no means can.



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