Republican's lie about Smoot Hawley

[sealybobo]

When conservatives rail in the media of the dangers of "returning to Smoot Hawley, which created the Great Depression," all they do is reveal their ignorance of economics and history. The Smoot-Hawley tariff legislation, which increased taxes on some imported goods by a third to two-thirds to protect American industries, was signed into law on June 17, 1930, well into the Great Depression. In the following two years, international trade dropped from 6 percent of GNP to roughly 2 percent of GNP (between 1930 and 1932), but most of that was the result of the depression going worldwide, not Smoot-Hawley. The main result of Smoot-Hawley was that American businesses now had strong financial incentives to do business with other American companies, rather than bring in products made with cheaper foreign labor: Americans started trading with other Americans.

Smoot-Hawley "protectionist" legislation did not cause the Great Depression, and while it may have had a slight short-term negative effect on the economy ("1.4 percent at most" according to many historians) its long-term effect was to bring American jobs back to America.

 

[Mad Scientist]

Smoot-Hawley Tariff Act - Wikipedia, the free encyclopedia

The Smoot-Hawley Tariff Act (sometimes known as the Hawley-Smoot Tariff Act)was an act signed into law on June 17, 1930, that raised U.S. Tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half. In the opinion of most economists, the Smoot-Hawley Act was a catalyst for the severe reduction in U.S.-European trade from its high in 1929 to its depressed levels of 1932 that accompanied the start of the Great Depression

Since the Stock Market crash was in 1929, 1930 couldn't possibly be considered "well into the Depression". Smoot Hawley helped bring the Depression about.
I used Wikipedia cause I know you Liberals like and trust it as a source.

 

[GHook93]

I didn't know Al "Da Fat Fuck" Gore was a Republican!

The battle of Smoot-Hawley | The battle of Smoot-Hawley | The Economist

in a television debate on the North American Free-Trade Agreement, Al Gore, then vice-president, even presented his unamused anti-NAFTA opponent, Ross Perot, with a framed photograph of the pair.

 

[driveby]

When conservatives rail in the media of the dangers of "returning to Smoot Hawley, which created the Great Depression," all they do is reveal their ignorance of economics and history. The Smoot-Hawley tariff legislation, which increased taxes on some imported goods by a third to two-thirds to protect American industries, was signed into law on June 17, 1930, well into the Great Depression. In the following two years, international trade dropped from 6 percent of GNP to roughly 2 percent of GNP (between 1930 and 1932), but most of that was the result of the depression going worldwide, not Smoot-Hawley. The main result of Smoot-Hawley was that American businesses now had strong financial incentives to do business with other American companies, rather than bring in products made with cheaper foreign labor: Americans started trading with other Americans.

Smoot-Hawley "protectionist" legislation did not cause the Great Depression, and while it may have had a slight short-term negative effect on the economy ("1.4 percent at most" according to many historians) its long-term effect was to bring American jobs back to America.

 

[GHook93]

I love how a 9/11 truther talks about lies and creditability!

 

[Midnight Marauder]

What a smackdown for Bozo. Again. Interesting he never worries too much about Democrat lies, but instead spews regurgitated idiocy he's been spoon fed, without the slightest modicum of original thought or research of his own. Which clearly shows he's not interested in truth at all.

One would think after his infamous "Fox lied about Dodd" gaffe, he would be more cautious about his parroting. But since he's so self-loathing, he probably doesn't care that he's a clueless oaf, a anal-dwelling butt-monkey wind-up phonograph for the left, who plays whatever record they put on his platter.

Instead of a jack-in-the-box, he's the local hack-in-the box!

Welcome Bozo, to another shredding of your own making. Dick head.

 

[DiveCon]

What a smackdown for Bozo. Again. Interesting he never worries too much about Democrat lies, but instead spews regurgitated idiocy he's been spoon fed, without the slightest modicum of original thought or research of his own. Which clearly shows he's not interested in truth at all.

One would think after his infamous "Fox lied about Dodd" gaffe, he would be more cautious about his parroting. But since he's so self-loathing, he probably doesn't care that he's a clueless oaf, a anal-dwelling butt-monkey wind-up phonograph for the left, who plays whatever record they put on his platter.

Instead of a jack-in-the-box, he's the local hack-in-the box!

Welcome Bozo, to another shredding of your own making. Dick head.

seems several of the AOHell n00bs are just like him
he has company now

 

[Toro]

Smoot-Hawley was not the cause of The Depression but it certainly exacerbated it.

 

[Agnapostate]

Smoot-Hawley was not the cause of The Depression but it certainly exacerbated it.

Come now, we've gone over this before!

As mentioned to you previously, it's largely a myth that the U.S. relied on fairly neoliberal trade policies before the introduction of the Smoot-Hawley tariff, a claim made by even so prominent a figure as your beloved Bhagwati. In reality, the tariff rate remained in the average range established since the Civil War period. In 1875, for instance, the average rate ranged between 40 and 50%. In 1913, the average tariff rate on manufactured products was 44%, whilst the 1931 rate was only 4 percentage points higher at 48%.

More than that, the analysis of Smoot-Hawley itself having significantly deleterious direct effects is a dubious one. What's more insightful is to examine the role of the additional factor of deflation. Irwin's The Smoot-Hawley Tariff: A Quantitative Assessment is commendable in this regard. Consider the abstract:

In the two years after the imposition of the Smoot-Hawley tariff in June 1930, the volume of U.S. imports fell over 40%. To what extent can this collapse of trade be attributed to the tariff itself versus other factors such as declining income or foreign retaliation? Partial and general equilibrium assessments indicate that the Smoot-Hawley tariff itself reduced imports by 4-8% (ceteris paribus), although the combination of specific duties and deflation further raised the effective tariff and reduced imports an additional 8-10%. A counterfactual simulation suggests that nearly a quarter of the observed 40% decline in imports can be attributed to the rise in the effective tariff (i.e. Smoot-Hawley plus deflation)

So as previously mentioned, this business about the damaging effects of Smoot-Hawley is just another element of traditional "free market" rhetoric that turned out to be false, I'm afraid. As I've mentioned to you many times now, the use of strategic trade policy (namely interventionism) to protect infant industries ultimately plays a critical role in the establishment of solid capital markets, inasmuch as such industries are given time to "grow up" and thus become competitive. Dynamic comparative advantage is thus maximized in this manner, providing greater utility benefits than immediate static comparative advantage maximization.

 

[Toro]

So as previously mentioned, this business about the damaging effects of Smoot-Hawley is just another element of traditional "free market" rhetoric that turned out to be false, I'm afraid. As I've mentioned to you many times now, the use of strategic trade policy (namely interventionism) to protect infant industries ultimately plays a critical role in the establishment of solid capital markets, inasmuch as such industries are given time to "grow up" and thus become competitive. Dynamic comparative advantage is thus maximized in this manner, providing greater utility benefits than immediate static comparative advantage maximization.

This is silly.

First, you cite a study that estimates tariffs fell by as much as 10% due to Smoot-Hawley. That is a significant amount, given that the economy contracted by about 45%. So, yes, Smoot-Hawley exacerbated the Depression. It did not cause it, but it certainly contributed to it.

Second, most tariffs in America at that time and today were not and are not on "infant industries." They are to protect mature domestic production. So your infant industry argument regarding the Depression is irrelevant.

Let's look at an original commentary by The Economist in 1930.

The signature by President Hoover of the Hawley-Smoot Tariff Bill at Washington is the tragi-comic finale to one of the most amazing chapters in world tariff history, and it is one that protectionist enthusiasts the world over would do well to study. The reason for tariff revision was a desire to restore a balance of protection which had been tilted to the disadvantage of the agriculturalist. But so soon as ever the tariff schedules were cast into the melting-pot of revision, log-rollers and politicians set to work stirring with all their might, and a measure which started with the single object of giving satisfaction to the farmer emerges as a full-fledged high tariff act in which nearly 900 duties have been raised, some extravagantly. Such is the inevitable result of vested interests working through political influence, ending in signature by a president, antagonistic to the bill, under compulsion of political necessities. No one, except the interests who fancy their own pockets may benefit, wanted the tariff; big business in the East is against it; the economists of America have condemned it in unison; the motor manufacturers have implored Mr Hoover to use his veto; and the fear of its economic consequences at home and abroad was mainly responsible for the heaviest slump of the year in Wall Street. Yet it is now the law of that land, and we have the spectacle of a great country, at a moment of severe trade depression, and faced with a growing necessity to export her manufactures, deliberately erecting barriers against trade with the rest of the world. Here, indeed, is a classic example of what happens to a country which once starts on the slope of protection. Protection, meant to be a good servant, becomes a dominant and costly master. President Hoover, we see, endeavours to coat the pill by suggesting that the "flexible" provisions will be used to mitigate the effects of the tariff, where it may be found to be irksome. This hope is surely illusory, as similar hopes held out in the past have proved to lie. In the first two years of President Coolidge's administration a number of duties were raised, but only two reduced—namely, on the vital items of bran and live bobwhite quail. We are compelled to accept the view expressed some years ago by Dr Taussig that "the interests involved in tariff-making are so powerful, and can exert such influence on the party in power, that disinterested and non-partisan administration of the flexible provisions is a vain dream." If there is any comfort to be derived from this latest chapter in tariff folly, it is the belief that American eyes will be forcibly opened to the fact that they are faced by a reductio ad absurdum. Incidentally, every week brings new evidence of the realisation by American business leaders of the dangers of the fiscal path which America is treading. In a contribution to the Annals of the American Academy of Political and Social Science Mr Edward A. Filene, while disavowing Free Trade convictions, argues powerfully that a lowering of American tariffs is essential for the stimulation both of world trade in general and American exports in particular. Magna est veritas et prevalebit.

What infant industries in agriculture was Smoot-Hawley protecting?

To say that Smoot-Hawley didn't have an effect on the curtailment of trade and growth is bizarre.

 

[Agnapostate]

I'm not referring to infant industries specifically in the context of the tariff. I'm referring to the general nature of "government intervention" not having the deleterious impacts that you allege, and in fact resulting in long-term utility gains for capitalism, such as the maximization of dynamic comparative advantage in the case of infant industries.

I'm sorry if the bit about infant industries distracted you; the primary focus needed to be centered around deflation in light of that factor's impact on effective tax rates.

 

[Gunny]

When conservatives rail in the media of the dangers of "returning to Smoot Hawley, which created the Great Depression," all they do is reveal their ignorance of economics and history. The Smoot-Hawley tariff legislation, which increased taxes on some imported goods by a third to two-thirds to protect American industries, was signed into law on June 17, 1930, well into the Great Depression. In the following two years, international trade dropped from 6 percent of GNP to roughly 2 percent of GNP (between 1930 and 1932), but most of that was the result of the depression going worldwide, not Smoot-Hawley. The main result of Smoot-Hawley was that American businesses now had strong financial incentives to do business with other American companies, rather than bring in products made with cheaper foreign labor: Americans started trading with other Americans.

Smoot-Hawley "protectionist" legislation did not cause the Great Depression, and while it may have had a slight short-term negative effect on the economy ("1.4 percent at most" according to many historians) its long-term effect was to bring American jobs back to America.

You build scarecrows for a living, don't you? Total strawman. One thing the scarecrow DOES have on you is a brain.

 

[Agnapostate]

For instance, we could refer to Yu's A new perspective on the role of the government in economic development: Coordination under uncertainty. As noted by the abstract:

This paper argues that the government possesses certain unique features that allow it to restrict competition, and provide stable and reliable conditions under which firms organise, compete, cooperate and exchange. The coordinating perspective is employed to re-examine the arguments for industrial policies regarding private investment decisions, market competition, diffusion of technologies and tariff protection on infant industries. This paper concludes that dynamic private enterprises assisted by government coordination policies explains the rapid economic growths in post-war Japan and the Asian newly industrialising economies.

Later elaboration is provided by this, for instance:

[The government] possesses some unique features that distinguish it from the firm. Such features allows the government to regulate competition, reduce uncertainty and provide a relatively stable exchange environment. Specifically, in the area of industrial policy, the government can help private enterprises tackle uncertainty in the following ways: first, locating the focal point by initiating projects; providing assurance and guarantees to the large investment project; and facilitating the exchange of information; second, reducing excessive competition by granting exclusive rights; and third, facilitating learning and diffusion of technologies, and assisting infant industry firms to build up competence. The history of developmental success indicates that the market and the state are not opposed forms of social organisation, but interactively linked (Rodrik, 1997, p. 437). In the prospering and dynamic nations, public-private coordination tends to prevail. Dynamic private enterprises assisted by government coordination explain the successful economic performances in the post-war Japan and the Asian newly industrialising economies. It is their governments' consistent and coordinated attentiveness to the economic problems that differentiates the entrepreneurial states (Yu, 1997) from the predatory states (Boaz and Polak, 1997).

 

[editec]

Most of these people don't care if its a lie. They don't know jack shit about economics or the Smoot Hawley act, either.

They've turned this issue into a myth.

Face it, Slearly, the sorts of conservatives you encounter here aren't reality based thinkers.

Niether are MOST of them here in any way representative of mainstream conservatives.

These people are mostly ignorant trolls who parrot a few phrases they've been taught.

They're not seeking to win hearts and minds, here, they're seeking to evoke responses so they can personally insult those who refute their ignorant blather.

 

[Ravi]

I thought Hoover was one of the Republicans favorite presidents.

 

[del]

I thought Hoover was one of the Republicans favorite presidents.

 

[sealybobo]

Smoot-Hawley Tariff Act - Wikipedia, the free encyclopedia

The Smoot-Hawley Tariff Act (sometimes known as the Hawley-Smoot Tariff Act)was an act signed into law on June 17, 1930, that raised U.S. Tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half. In the opinion of most economists, the Smoot-Hawley Act was a catalyst for the severe reduction in U.S.-European trade from its high in 1929 to its depressed levels of 1932 that accompanied the start of the Great Depression

Since the Stock Market crash was in 1929, 1930 couldn't possibly be considered "well into the Depression". Smoot Hawley helped bring the Depression about.
I used Wikipedia cause I know you Liberals like and trust it as a source.

Sometimes things don't get better until they get worse first.

America is finally realizing just how wrong all the right wingers are, about everything.

You guys have been the biggest defenders of outsourcing. You love the cheep products you get from slave labor around the world. Anytime we talk about protecting industries that are vital to labor and our economy, you scream PROTECTIONISM.

Well guess what? Every country does it. And those who don't, don't have a strong middle class. No shit we want to protect the American way.

And you cry that the cost of things will go up. First of all, that isn't necessarily true. Maybe the CEO just won't make $20 million this year. Maybe he'll only make $10 million.

You want to cry for the CEO's now stupid? Arguing with Republicans is an exercise if futility.

And let the cost of things go up. So fucking what? The economy won't be right until the masses get back to making money and spending. Unless you know of some alternative jobs that all those factory line workers can do that will make them a decent living? You don't. So, we need to tariff the fuck out of companies shipping products into the US. Tax them so high they have no choice but to come back home.

PS. Every good country has unions. We need to get more people unionized. The Employee Free Choice Act is going to pass, and unions are on their way back. No more will a company ask the employees to take a pay cut and give the executives bonus'.

 

[sealybobo]

I didn't know Al "Da Fat Fuck" Gore was a Republican!

The battle of Smoot-Hawley | The battle of Smoot-Hawley | The Economist

in a television debate on the North American Free-Trade Agreement, Al Gore, then vice-president, even presented his unamused anti-NAFTA opponent, Ross Perot, with a framed photograph of the pair.

Back then, people worried that corporations might abuse NAFTA. When Bush and the GOP took over in 2000, they did exactly what Labor feared they would do. They passed tax breaks to companies going overseas to help them with the move. How fucked up is that?

You right wingers will continue to hope that we forget all the hanous shit the GOP did to labor when they were in charge. Now watch the GOP try to stop any fixes in bringing jobs home. Their first argument, Smoot Hawley. I'm so glad Thom Hartmann squashed that Republican lie.

Remember Bush even wanted to let Mexican Truckers come into America? That would have killed the American Truckers way of life. But the GOP don't care. You want the cheep goods and you don't care about the side effects because you don't think it will hurt you personally. Selfish Republicans. That's why you don't win elections. Keep it up!!!

So don't try to take something Al Gore said in the 90's and apply it today. NAFTA is necessary. You won't deny that.

But NAFTA can be a bad thing if the politicians pit American labor against cheap 3rd world labor. And that's what the GOP did.

 

[sealybobo]

When conservatives rail in the media of the dangers of "returning to Smoot Hawley, which created the Great Depression," all they do is reveal their ignorance of economics and history. The Smoot-Hawley tariff legislation, which increased taxes on some imported goods by a third to two-thirds to protect American industries, was signed into law on June 17, 1930, well into the Great Depression. In the following two years, international trade dropped from 6 percent of GNP to roughly 2 percent of GNP (between 1930 and 1932), but most of that was the result of the depression going worldwide, not Smoot-Hawley. The main result of Smoot-Hawley was that American businesses now had strong financial incentives to do business with other American companies, rather than bring in products made with cheaper foreign labor: Americans started trading with other Americans.

Smoot-Hawley "protectionist" legislation did not cause the Great Depression, and while it may have had a slight short-term negative effect on the economy ("1.4 percent at most" according to many historians) its long-term effect was to bring American jobs back to America.

You build scarecrows for a living, don't you? Total strawman. One thing the scarecrow DOES have on you is a brain.

What is a strawman? I heard or read a right winger talking shit about Smoot Hawley and I remember that Thom Hartmann squashed that right wing bullshit in one of his op ed's, so I posted it.

Now instead of you right wingers having a hush campaign about smoot hawley, we can have the argument right here in the open, so people who don't know or care a lot about politics can come see what this "smoot hawley" thing is that you right wingers keep talking about.

And it turns out you are wrong. Tariffs didn't cause the Great Depression. Just like the one we are in now, the last one was caused by the GOP and Corporations that own the GOP.

Oh yea, they own Chris Dodd too. You can have him.

 

[del]

When conservatives rail in the media of the dangers of "returning to Smoot Hawley, which created the Great Depression," all they do is reveal their ignorance of economics and history. The Smoot-Hawley tariff legislation, which increased taxes on some imported goods by a third to two-thirds to protect American industries, was signed into law on June 17, 1930, well into the Great Depression. In the following two years, international trade dropped from 6 percent of GNP to roughly 2 percent of GNP (between 1930 and 1932), but most of that was the result of the depression going worldwide, not Smoot-Hawley. The main result of Smoot-Hawley was that American businesses now had strong financial incentives to do business with other American companies, rather than bring in products made with cheaper foreign labor: Americans started trading with other Americans.

Smoot-Hawley "protectionist" legislation did not cause the Great Depression, and while it may have had a slight short-term negative effect on the economy ("1.4 percent at most" according to many historians) its long-term effect was to bring American jobs back to America.

You build scarecrows for a living, don't you? Total strawman. One thing the scarecrow DOES have on you is a brain.

What is a strawman? I heard or read a right winger talking shit about Smoot Hawley and I remember that Thom Hartmann squashed that right wing bullshit in one of his op ed's, so I posted it.

Now instead of you right wingers having a hush campaign about smoot hawley, we can have the argument right here in the open, so people who don't know or care a lot about politics can come see what this "smoot hawley" thing is that you right wingers keep talking about.

And it turns out you are wrong. Tariffs didn't cause the Great Depression. Just like the one we are in now, the last one was caused by the GOP and Corporations that own the GOP.

Oh yea, they own Chris Dodd too. You can have him.