If you post the formula, I can show you you're wrong.
Yes, a series of Fed actions decreased the money supply around 30%.
Which actions?
Mainly, they made money more expensive and failed to lend to help failing banks
So they failed to pump the money supply back up, they didn't cause it to fall. Glad you figured that out.
No. I think it was irrelevant because trade was only about 10% of the economy
So damaging 10% of the economy back then was no big deal but damaging 20% or more of our economy today is a good idea?
You’re back to your usual inane and irrelevant, nonsensical remarks. Whenever you can’t present a cogent argument you always resort to silly word games
“So they failed to pump the money supply back up, they didn’t cause it to fall. Glad you figured that out.”
That’s typical of why it usually becomes a waste of time to communicate with you. I had that figured out for years, and have been saying so since this discussion started. It’s you who fails, over and over, to get the point.
Until next time. And here’s more reading for those who might be interested:
“Friedman and Schwartz argued that all this was due to the Fed’s failure to carry out its assigned role as the lender of last resort. Rather than providing liquidity through loans, the Fed just watched as banks dropped like flies, seemingly oblivious to the effect this would have on the money supply. The Fed could have offset the decrease created by bank failures by engaging in bond purchases, but it did not. As Milton and Rose Friedman wrote in Free to Choose:”
Any effort to rid the world of the knee-jerk Smoot-Hawley references is worthwhile:
http://www.fee.org/publications/the-freeman/article.asp?aid=8132
About halfway down the article.
But I’ll say again, Smoot-Hawley proved nothing about anything. It was just one more reflection of the economic depression caused by the failure of the financial system and the resulting liquidity crisis. The prostitution business also suffered. Maybe that was a major contributor to the Great Depression.
Later, again.