Skip to comments.Here comes Smoot-Hawley II (ObamaCare) - Health care, Democrat's kamikaze mission
Posted on 12/19/2009 3:04:59 PM PST by dalight
But this wouldnt be Congresss first historic mistake.
The Smoot-Hawley Tariff of 1930 to buy American sounded like a good way to protect jobs by keeping out cheaper foreign products. Historians agree it was a mistake, setting off waves of retaliatory tariffs and making the Great Depression worse.
(Excerpt) Read more at politico.com ...
Smoot Hawley merely raised tariffs from 30 % to 50% or more, and the Depression began far before it passed.
However, the premise, that raising taxes and worse, injecting uncertainty into a consumer driven economy is possibly the worst situation imaginable.
Yes you are right.. but at that time.. this was actually a fairly small tax on the economy vs. the real impact of ObamaCare. ObamaCare hits us right between the eyes. For families making more than 59,000 this is the conversion of a benefit to a tax.
Worse, this crap is funded by the twin frauds of cutting Medicare (Not happening) and taxing mega-health plans which will disappear immediately after the tax is passed. So none of this funding will occur. But, the law doesn't go away just because the funding doesn't materialize. So a general tax will have to be imposed then to pay for the cost of the Program. The Democrats are betting this will be someone elses problem as the COSTS start in 2014. So, instead, any taxes collected by this monstrosity will actually go to fund more spending between now and 2014.
Imagine if we were depending on Japan, Germany and China for importing war capacity. Thank you Smoot Hawley.
Are you talking about WWII??? or now. This is a bizarre post.
That is the most incredibly stupid thing I have ever seen in print.
First, Smoot-Hawley effected all imports, not just those from enemy countries.
Second, if there were such an undesirable dependence, then it would have to be cut off anyway, not just taxed to be made less profitable.
You don't cut off your nose in anticipation of one day perhaps wanting to spite your face.
Smoot, and family had interest in sheep, wool, wool mills and finished wool products. He was interested in keeping out imports that undercut his families companies.
Because of Smoot-Hawley world trade collapsed, no one could know if they could export because their price was no longer clearly just shipping costs, but political costs, so yet another leg was pulled out from under the worlds economy.
More jobs were lost then saved.
Smoot a Republican, like Hoover, and FDR all tried to keep labor and material prices high. Higher than people could afford. This really impacted the poorer working class, driving them into the arms of the FDR welfare state, and which leftist, socialist Democrat have been, as they always are of lefty, RINO Republicans for smoothing the socialist path for them.
By the way, Smoot was a Mormon, kind of like how Mitt Romney, a lefty RINO smoothed the path for ObamaCare.
As the Democrats say, “RINO’s, we can’t do it with out them!”
Our exports crashed after Smoot. We were the China of the era.
We lost ten jobs for every job Smoot saved. Typical.
However, some jobs, politically connected jobs, and business with political friends are more equal than others.
Smoot really pulled the free market, can’t we all just trade legitimacy from the US. Germany, Japan all learned that they need to have political and economic spheres, and that the US was just one way as far as trade.
Well, let me inject some troublesome facts into this concept that Smoot-Hawley protected anything.
First, the decimation of the limited world trade at the time paved the way for the rise of The Third Reich and provided the justification for the Japanese to secure oil and resources for their manufacturing and markets for their goods via conquest rather than via trade. The global depression provided the framework for the mass death event knows as WWII.
Smoot-Hawley did nothing to protect American Industrial might, but rather gutted it, second only to the stylings of Franklin Roosevelt who was perfectly happy to attempt to manage all of American manufacturing into the ground in the name of "beating the depression."
I am not arguing that Smoot wasn't a horrible bill or its effects were minimal with respect to World Trade.
I am arguing that Smoot is a duffer compared to ObamaCare at this juncture.. because we are poised at the edge and this is another huge tax increase which forces a cascade of new tax increases in the future as the "taxes" fail to generate the planned revenue and the "savings" via Meidcare Cuts and Cuts in Physician reimbursements either do not materialize because of stark raving political fear, or do materialize via the increased death rate of our senior citizens. This is what seems to be the plan/hope? of these people.
The Smoot-Hawley Tariff of 1930 to "buy American" sounded like a good way to protect jobs by keeping out cheaper foreign products. Historians agree it was a mistake, setting off waves of retaliatory tariffs and making the Great Depression worse.That's one reason Pat Buchanan isn't a historian.
That’s one reason Pat Buchanan couldn’t get elected.
World trade was already deflating before Smoot Hawley passed, it did excelerate the collapse but it did not start it.
And this time, the “kept labor and material costs to high...poor people could not afford them..”
Has been replaced with “once working class people have had their job outsourced to a different country and now are Obama’s and the Dhimmcrats surprising voters”
And that is the unspoken about Globalism, the more successfully it is implemented, the more Democrat Voters are created.
Obamacare is a disaster waiting to happen, regardless of the Smoot Hawley reference, if anything it creates uncertainties in an already uncertain US Business climate as well as raises taxes in the middle of a recession.
In 1930, the Republican controlled House of Representatives, in an effort to alleviate the effects of the
the Great Depression, passed the
Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act which, anyone? anyone? Raised or lowered?
Raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the US sank deeper into the Great Depression.
“Yes you are right.. but at that time.. this was actually a fairly small tax on the economy vs. the real impact of ObamaCare. ObamaCare hits us right between the eyes. For families making more than 59,000 this is the conversion of a benefit to a tax.”
Exactly, the connection to Smoot is strained at best, at the time it merely raised already high tariffs, the Depression had already kicked off at that point in time, Smoot excerbated the problems.
This is going to end badly for America, of that I’m certain of, we will become a Banana Republic with a ruined currency and high opportunity costs and no capital or credit available for small businesses the real driver of the economy.
Isn’t that what Smoot-Hawley did? Raise taxes in the middle of a recession?
Would that be direct taxes, or tariffs?
Taxes. You know, those things that take more money out of your pocket.
Direct taxes, or tariffs?
It really is a simple question.
It is a false choice. Stop trying to imply that a tax is less of a tax because it is “indirect.” You still pay it . . . what difference does the existence of a middleman make?
I implied nothing, it is a simple question.
difference between a direct tax, and a tariff.
Well, then. Pretend I’ve answered, ignore my objection, and proceed to your point. You have one, don’t you?
So the middle man paying taxes is your answer?
Surely an astute commentator such as oneself would then have to acknowledge that the tariffs are only paid if...an item with a tariff on it is purchased.
Tariffs are completely voluntary taxation.
Trade was slowing, but still growing.
Trade declined and collapsed in the few years after Smoot.
Further the idea of world trade, free trade, commerce across national lines, that idea was flushed, by Smoot, and Hawley, down the drain, especially in Germany and Japan.
And, guess who filled the void with hyper nationalistic jingo?
I could argue that 60 million dead and the economic waste of the thirties, the destruction and war of the 40’s the comparative strength of the Soviet Union and Communism could be laid at the foot of those two idiots.
Domestic manufactures raise, or keep prices up to the tariff level, so they are not voluntary as there is no way to avoid them.
Buy the import, pay the tariff. Buy the domestic, pay the price very very close to the tariff.
Was it Smoot Hawley, or Reparations for WW1?
Japan had chosen the British Model, they saw the Greater East Asia CoProsperity Sphere as a tool for expansion and economic dominance, they wanted to be the British Empire of the 18th Century in the 19th Century.
And I would say that is a false argument, Smoot Hawley effected imports, not exports, what kicked off WW2 in the Pacific was embargos on shipping oil and steel to Japan, it had nothing whatever to do with Smoot.
Additionally, the decrease in trade could just as easily be attributed to the general Recession that rebounded around the world.
Smoot has become something of a shiboleth, and wars have not stopped being fought, far from it, if anything wars in the future will be far more bloody, how close did India and Pakistan come to a nuclear exchange in the 90’s?
An increase in prices would depend on the number of domestic companies and business engaged in producing the same product, Markets are not suspended because there are no competing imports, far from it, a business concern in WA can still easily out compete a business in say NY simply because of the differences in State and Local taxes and regulatory burdens and mandates.
The real difference would come in the “who” was making the profits, small businesses or global corporations.
I thought that's where you were going, and your obfuscation was simply to disguise the fact that you are wrong. You pay higher taxes when a tariff is raised when the domestic producer raises his prices (with the government's blessing), and you pay higher taxes when a tariff is raised when you buy a domestic product that contains an imported component.
So go ahead, avoid buying cocoa butter (I do). Now try to avoid buying chocolate. Or come to FR and claim that you are not paying higher taxes when you buy that chocolate. LOL
It's should be surprising that the argument that tariffs are "free" often comes coupled with the argument that tariffs "protect high-paying jobs." Think about that for a minute. If either, or both, arguments are true, we should raise tariffs 1000% across the board.
Business have to make a profit. If you have many competing competitors, you have duplicated owners, accountants, sales staff, advertising other back office expenses. You most also might have many under capitalized companies that can not afford expensive moder machinery and process. So, you do’t get lower costs from more competitive companies becasuse either they can not, because of small size and low profits with a market that is materially full filled, or they are inefficient and don’t have the excess profits to fund new equipment.
In your case what usually happens is either price fixing, or consolidation, then you might have two, price fixing, or even one company. This is the usual effect seen in many Latin and South American countries.
Also what you basically have in that case is our one company reciprocally cut off from the entire world. Usually those companies have less incentive to innovate.
Your example might be true....for a while. All actions have dynamic reactions/consequences after a while. This is something lefties, RINOs, don’t foresee.
You can drive from northern New Jersey, up to Maine, then accross that width as far south as Pensilvania, and along the lakes to as far West as Detroit/Gary and there are hundreds of dead cities all run on Democrat economic notions.
Both. Both were very primitive short sighted economics. Germany was in the most fundamental and true sense, bankrupt, both financially, politically and physically.
Smoot was another simple, dumb, economically ignorant, and protective of, in the case of the Utah Smoot family fortune, and others. Smoot hurt the mass of leaving the farm, entering the urban factory worker.
On the international side, since Wilson, the US and others had been working to increase world trade, rebuild Europe, and promote Democracies. That was all discredited by Smoot. All of it.
You’ll notice after this recent crisis, no country introduced any trade protections. Not a one. That tells you something.
I didn’t know we had so many admirers of North Korean national economic policy on FR.
( It’s not that bad. It is just people see only the first, most immediate action, and are unable to see the second, third and so forth actions down the line over time. )
........it was not the trade wars but the act of attempting to balance the budget.....
AKA austerity or tight money
The Keynesians have been fretting about it ever since and their solution of massive loose money is now in process.
The recent Stimulus bill has shown that the intervention of the Reagan era, reducing taxes to expand the economy, was the most effective way to expand the economy.
Spending, as it is directed and must be managed is subject to corruption and the targeting makes the effect like a squirt bottle trying to fight a growing fire..
Pat has a good political education but his economics is pitiful.
Typical, one does not pay a tariff, no matter how much one may twist, project, slander, whatever, unless one purchases the good that has a tariff placed upon it.
One can make up (as only a Globalist can) whichever scenario a fevered mind can, the plain fact is, Tariffs are completely voluntary taxation and were the mechanism that was designed into the Constitution to fund the federal government.
Oh, I don’t know, say that George W. Bush slaps a tariff on imported steel. You gonna stop buying steel?
I dunno...perhaps I would purchase domestically produced steel. and avoid the tariff.
But the tariff was imposed so that domestic steel producers wouldn’t have to lower their prices, and in a good number of cases the domestic steel producers will raise their prices higher than where those prices would be in the absence of the tariff. Still believe in a free lunch?
Not to mention, you won’t be the only one calling a domestic producer when the tariff rate goes up. Others will, as well. What usually happens to prices when demand increases?
Why, prices will increase of course, until the become parallel with the tariff, and until extra capacity is created to handle the increassed demand...
". . . if anything it creates uncertainties in an already uncertain US Business climate as well as raises taxes in the middle of a recession."Did I miss something over the past twelve hours or so?
--December 19, 2009 6:55:49 PM CST
"Why, prices will increase of course . . . ."
December 20, 2009 10:29:02 AM CST
Please, prices do increase, even during a recession, look at the local gas station.
Which of course, ignores the fact that Tariffs are voluntary taxation as well as domestic competition is just as viable as one’s beloved Globalism, the problem is it doesn’t maximize Global Corporation’s profits.
You’ve switched reasons for price increases between your comment #45 and your comment #47.
How is it voluntary when domestic producers raise their prices because of the tariff?
the problem is it doesnt maximize Global Corporations profits.
Does Arcelor Mittal in the US benefit when US steel tariffs are imposed?
A price increase is not a tax increase one winds up in the private sector the other into the goverment’s coffers.
As for Mittal...it would depend on the domestic market of course, of course Honda and Nissan would probably benefit as compared to say Mercedes or Hyundai as they have more internal productive capacity, if anything they would benefit greatly as domestic manufacturing would expand.