Skip to comments.As Bad As ObamaCare Is, Hawley-Smoot Tariff Act Was Worse
Posted on 06/16/2014 6:30:30 AM PDT by SeekAndFind
Tuesday marks the anniversary of one of the most destructive pieces of legislation in U.S. history: the Hawley-Smoot Tariff Act of 1930, which triggered a disastrous trade war, intensified the Great Depression and helped set the stage for World War II.
Unfortunately, as the Affordable Care Act and Dodd-Frank Wall Street Reform and Consumer Protection Act demonstrate, Washington continues its long-held tradition of passing ill-conceived legislation.
The Affordable Care Act and Dodd-Frank, both passed in 2010, clearly have hurt the U.S. economy: increasing business costs, slowing hiring, adding to the uncertainty that investors face. But Hawley-Smoot arguably was worse.
The U.S. economy already was well into recession in 1930, with unemployment rising and national output plunging. Concerned with an impending election, Congress sensed the need to placate nervous voters. Its solution was the Hawley-Smoot Act, the brainchild of Rep. Willis C. Hawley, R-Ore., and Sen. Reed Smoot, R-Utah.
The act was the first shot in a trade war and raised the tax on imported goods to their highest levels in more than 100 years. Henry Ford called it "economic stupidity," and he was neither alone nor mistaken.
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Ok let’s do it AGAIN. This time eliminate all income and corporate income taxes + capital gains. That will leave American consumers with more $$$ to buy the tariffed goods.
None of this 9-9-9 crap.
Let our enemies finance our government. They will speak out against it’s expansion.
Sure Obamacare has a devastating economic impact, but life isn’t just economics. The most important aspect of Obamacare is that it is a direct attack on the freedom of every single American and an unprecedented invasion of privacy by the federal leviathan. Obamacare represents abject tyranny, Smoot-Hawley did not.
In the words of John Kerry(who served in Viet Nam) I say “Bring it on!”
I think just the opposite was the case.
When the US created these variable tariffs, other nations retaliated, and Germany decided that it needed to become self sufficient. In the context of the Great Depression, tariffs inhibited exports and imports all around.
Despite taking something of a hit in imports and exports, on the grand scale it accomplished something good: instead of their being an extended “international depression”, it isolated countries from each other, so that the stronger ones could recover faster, and not be dragged down by the weaker ones.
Had Hoover a year or two more, it is likely the US could have come out of the Great Depression by 1934 or ‘35. But Hoover made the terrible mistake of trying so hard to fix the problem at the level of business, that millions of people who were unemployed and starving, who needed help immediately, were ignored.
In a way, this is presaging what is happening today, on a smaller scale. The Republican leadership are so fixated on doing what big business and multinational corporations want, that it is ignoring what the people on Main Street want.
To make matters worse, corporations that are “too big to fail”, like that status, and want it to be preserved, even if it threatens the US economy. And multinational corporations have no loyalty to the US at all, and for even modest profit growth would deeply harm or even destroy us.
For RINOs to see them as their real constituency damns them, and the sooner they are out of power, the better.