Posted on 07/24/2002 7:44:25 AM PDT by RCW2001
What completely bass-ackward revisionist poppycock.
Trade only amounted to 6% of GNP to begin with, and it declined to 2% of GNP by 1932. Furthermore, since Smoot-Hawley only applied to 1/3 of imports, you can't even attribute the 4% drop to the tariff. Rather it was the 31% decline in GNP and 25% unemployment rate that more drasticly reduced demand for imports.
And as far as Smoot-Hawley "causing" the Depression, the stock market crashed in 1929, the tariffs weren't enacted until 1930.
Take your convoluted, revisionist and discredited economic theories and peddle them elsewhere.
Sage comment.
Now as to the "timing," glad you asked. Jude Wanniski has done an extensive study on the market in the months before HS was passed. With every advance of HS through a congressional committee vote, the market went DOWN. But the key vote came on Wed. just before "Black Thursday." This made HS a surety.
The more we find out about this idiotic bill, the more the evidence points to it as being the second greatest factor in the Great Depression, behind the antics of the Federal Reserve board. Put THAT in your pipe and smoke it.
Both Doug Irwin and Mario Crucini, in separate studies, have shown that when you factor in DEflation, HS probably "hit" this country for 5% of GNP!!! This is an incredible shock, and doesn't factor in the "trade wars" and reciprocity barriers that were effected afterwards. I suspect the actual "death toll" for HS is probably higher.
Want to put that in perspective? Most economic historians find that the railroads only ADDED about 5-10% to the GNP in the entire 19th century. So in a couple of years, Hawley Smoot wiped out everything it took the railroads 80 years to add!!!
Who gives a rat's patoot about any "study" that Wanniski does?
He's not an economist.
His education is Political Science and Journalism: the perfect combo for propaganda, not a serious "study" of economics.
Invalid comparison.
The old Soviet Union was void of any market forces whatsoever.
It was strictly a centrally planned "command economy" with all resources owned, controlled and operated by the state.
In contrast, when markets falter due to the pencil-pushing, paper-shuffling excesses of Wall Street, there is nothing wrong with Government "priming the pump" of private industry by building infrastructure that benefits EVERYBODY for decades to come. And I do mean EVERYBODY, private businesses as well as the workers who become their employees. And taxpayers receive tangible and lasting infrastructure for their investment.
Guess that leaves out both Adam Smith (philosophy) and Karl Marx (sociology/philosophy). What's left of your idiot spectrum?
No, just that Mr. Wanniski's "thoughts" are predictably biased and non-objective.
They shouldn't be confused with sound economic theory.
Adam Smith did quite well.
Yet since he predates the development of the modern science of economics, it's hardly a fair comparison.
Karl Marx on the other hand... yeah, I'd say he's just as disreputable as Wanniski.
William Flax Return Of The Gods Web Site
The first reaction of normal people to a real problem is to become more Conservative--to get back to the basics. But if there is no one out there willing to preach the truth to them, they will eventually be misled by the endless repetition of Socialist lies. That has always been the Left's approach--The Big Lie. We need to hit them first with the truth--and we need to persist.
The very worst thing which Conservatives can do at such times is go on the defensive--or start apologizing for our beliefs and system.
We need to make the land ring out with the righteous indignation of a free people sick of politicians gnawing at their vitals for personal advantage.
William Flax Return Of The Gods Web Site
Those aren't "well-respected economists".
Those two are young mush-headed academic wannabes who crank out worthless research papers on global Klintonomics to satisfy the liberal agenda that plagues our universities. "Publish or perish" and your "study" better come up with the correct PC conclusions.
Same crapola junk science that brings us the Kyoto Protocol to solve "global warming".
Here are the facts:
Trade only amounted to 6% of GNP to begin with, and it declined to 2% of GNP by 1932. Furthermore, since Smoot-Hawley only applied to 1/3 of imports, you can't even attribute the 4% drop to the tariff. Rather it was the 31% decline in GNP and 25% unemployment rate that more drasticly reduced demand for imports.
A Google search reveals sufficient background information on the two relatively unknown wannabes you cite. However, the mere fact that you reference them in support of your absurd contentions is enough to condemn their credibility. They eschew valid academic methodology by assuming the politically correct result they desire is "true", then manipulating historical data and facts to support their incompetent assertions.
Senator John Heinz III, who died tragically in a plane crash in 1991, had developed a national reputation for his expertise in international commerce. During his years of serving in Congress, Senator Heinz III was appointed to the Chairmanship of the Subcommittee on International Finance and Monetary Policies. He had this to say about the Smoot-Hawley myth in 1985:
“It gravely concerns me that every time someone in this administration or the Congress gives a speech about a more aggressive trade policy, or the need to confront our trading partners with their subsidies, barriers to imports and other unfair practices, others in Congress immediately react with speeches on the return of the Smoot-Hawley Tariff Act of 1930, and the dark days of blatant protectionism and depression...It seems that for many of us that Smoot-Hawley has become a code word for protectionism and, in turn, a code word for the depression. Yet, when one recalls that Smoot-Hawley was not enacted until more than 8 months after the October, 1929 collapse, it is hard to conceive how it could have led to the Great Depression...the changes supposedly wrought by this single bill in 1930 appear fantastic.”
BTW, the late Senator Heinz entered Harvard Business School in 1961, and the following year worked for the summer with the Union Bank of Switzerland in Geneva. He received his Master's degree in Business Administration from Harvard in 1963. That's sufficient academic background for competent understanding of economics to be authoritive on the subject, unlike your voodoo propagandist Wanniski.
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