Republican's lie about Smoot Hawley

[EdwardBaiamonte]

I don't know how any blue collar people are ever going to do what my dad did.

with liberal taxes shipping their jobs off shore and liberal illegals taking the remaining jobs and bidding down wages, never!!!

 

[sealybobo]

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.

I will give you this. Trumps trade war with China did slow things down in 2019. He only had 2.3% growth because of his trade war with China.

I started this thread in 2009. Back then us democrats were all for tariffs. Republicans were not. Yet today trump and republicans are the ones pushing for tariffs.

Whos for tariffs and who’s not? I would only tariff certain products and certain countries. I guess this is like talking about regulations. Not all regulations are good and not all tariffs are bad.