Introduction: A Political Question With an Economic Answer
In a powerful clip from The Diary of a CEO, bestselling author Morgan Housel is asked a direct question:
“So why is Trump doing it then, in your view?”
The conversation isn’t political.
It’s economic, historical, and behavioral.
And Housel’s explanation is not about parties, ideology, or opinion.
It’s about:
- 40 years of Trump’s consistent messaging on trade
- America’s nostalgia for the 1950s manufacturing boom
- The unique economic forces after World War II
- The collapse of America’s manufacturing monopoly
- Automation replacing millions of jobs
Housel doesn’t defend or attack anyone.
He simply breaks down the story using history and data.
Watch the Clip
Why Trump Wants Tariffs, According to Morgan Housel
When asked why Trump pushes tariffs, Housel starts with an important point:
“Trump has been very consistent on this for literally 40 years.”
✔ This is not a new political strategy
✔ This is not tied to one election
✔ This is not reactive
Trump has been arguing since the 1980s (including on Oprah in 1986) that:
- the U.S. is being “ripped off”
- other countries benefited unfairly
- tariffs are the solution
Housel points out that Trump’s stance is not sudden — it’s lifelong.
He describes it neutrally, factually, with historical continuity.
The Bigger Story: Why So Many Americans Support Tariffs
Housel shifts the conversation away from politics and toward economic nostalgia.
There is a large portion of the U.S. population that looks at the 1950s and 1960s and says:
“America used to be a manufacturing powerhouse — we should go back to that.”
And, as Housel says:
“I get why people would say that.”
Here’s why:
- Manufacturing jobs did decline
- The 1950s did feel prosperous
- Wages were strong for blue-collar workers
- America was the world’s factory
But — and this is the heart of Housel’s argument — the conditions that made the 1950s possible were historically unique and cannot be recreated today.
Not because of politics.
Because of economics and history.
The 1950s Economic Miracle: A Completely Unique Moment in Time
According to Housel, the 1950s manufacturing boom happened because:
🟦 1. Europe and Japan Were in Rubble After World War II
“At the end of World War II, Europe and Japan were in rubble… America was not decimated whatsoever.”
The U.S. was the only major industrial power left standing.
This created a global manufacturing monopoly, lasting roughly 20 years.
🟦 2. China, India, South Korea, Bangladesh were not competitors yet
These nations would later become major manufacturing hubs — but not in 1945–1965.
🟦 3. Returning soldiers created massive domestic demand
16 million U.S. soldiers came home needing homes, cars, appliances, and goods.
🟦 4. Every one of those products was built in America
Because nobody else could build them at the time.
🟦 5. Blue-collar workers were paid extremely well relative to white-collar workers
A rare condition:
Doctors made more — but not much more.
Workers lived very similar lives to professionals.
This created a sense of shared prosperity.
Why the 1950s Will Never Return (Economically, Not Politically)
Housel explains that modern nostalgia ignores three massive forces:
1. Global Competition Returned
By the 1970s:
- Europe rebuilt
- Japan industrialized
- Toyota, Honda, and Nissan arrived
At first, U.S. automakers dismissed them as “lawnmower toys.”
Until…
✔ The oil crisis hit
✔ Americans needed fuel-efficient cars
✔ Japanese cars were suddenly better, cheaper, more desirable
This shift shattered America’s manufacturing dominance.
2. Denial About Global Manufacturing Quality
American manufacturing leaders underestimated Japan and Europe:
“There was a lot of denial… these nations were actually pretty damn good at it.”
Competition wasn’t unfair — it was simply new and better.
3. Automation Eliminated Millions of Manufacturing Jobs
This is the most important part of Morgan’s argument.
Automation, not offshoring, eliminated most manufacturing jobs.
Housel’s example:
1950: A steel plant produced 5 million tons with 30,000 workers.
Today: 8 million tons with 2,000 workers.
More output.
Fewer workers.
Massive productivity leap.
He adds:
Modern factories are “armies of robots and very few people.”
Even if manufacturing comes back to the U.S., the jobs will not.
Not because of China.
Because of machines.
Could Tariffs Bring Back 1950s America? Morgan Housel Says No — Here’s Why
Housel emphasizes empathy:
“I understand and I empathize with people who say we need to bring back manufacturing.”
But he explains the truth:
❌ You cannot recreate post-WWII global conditions
❌ You cannot undo technological progress
❌ You cannot reverse automation
❌ You cannot eliminate global competition
This is not political.
It is structural.
The 1950s were a unique, unrepeatable economic moment.
📚 Morgan Housel Books
1. The Psychology of Money
Teaches why people romanticize the past, misremember economics, and misunderstand incentives.
👉 https://amzn.to/4obzi5G
2. Same As Ever
Explains why human behavior — nostalgia, fear, competition — repeats throughout history.
👉 https://amzn.to/4pfI1VX
❓ FAQ: What People Also Ask About Morgan Housel
Is Morgan Housel a millionaire?
He does not disclose net worth.
He is a bestselling author and partner at Collaborative Fund — financially successful, but no verified numbers exist.
What does Morgan Housel invest in?
Publicly stated:
- simple investing
- low-cost index funds
- long-term holding
- avoiding forecasts
- conservative risk management
(Source: his interviews and essays.)
Does Morgan Housel share his portfolio?
No.
He shares principles, not positions.
What is Morgan Housel’s investment strategy?
Behavior-focused, not prediction-focused:
- long time horizons
- diversification
- simplicity
- understanding risk
- patience
Morgan Housel age?
Born in 1984.
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