MainLine Peace Action/DelMont PDA

November 13, 2010

Anyone? Anyone?

Filed under: economics — Tags: , , , , — Walter Ebmeyer @ 2:19 pm

We don’t usually promote the writings of  former members of the Reagan administration, but the linked article raises the spector of Smoot-Hawley [anyone? anyone?] and its effect – if any –  on American depression history.  The two gentlemen on the left are Senator Smoot of Utah and Representative Hawley of Oregon (but not in that order) who, in response to the crash of 1929, wrote and got passed a tarriff to protect American industry and agriculture.  We were all taught in high school – just like Ferris Bueller – that it was a failure, that it was somehow to blame for the terrible decade of the Thirties.  But students of the era,  like John Kenneth Galbraith, think the causes of the crash and the depression that followed were much like those that caused the market crack-up and subsequent recession of 2008-2009.  It should be noted, and our author – Robert Lighthizer – does, that in the last decade our country ran a trade deficit of $4.3 trillion and lost 5.6 million manufacturing jobs.  There are many men on Wall Street who got rich taking advantage of  tax loopholes that helped them move jobs and whole companies overseas.  How to get those jobs and companies back?  Maybe a new Smoot-Hawley.  Will it make things more expensive in Wal-Mart?  Yes, but that won’t matter as much if you have one of those 5.6 million jobs.

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