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To: harpseal
The Smoot-Hawley tariff passed during the Great Depression caused a trade war with foreign markets and probably made the Great Depression worse.
12 posted on 09/26/2003 9:24:30 AM PDT by The Great RJ
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To: The Great RJ
The Smoot Hawley act passed in 1930 did not cause a trade war as it was a response to traiffs passed in France, Germany, and England prior to its enactment. It was passed in combination with an Income tax hike.

You stated it proably made the Great Depression worse. I have also seen analysis that states it may have mitigated the Great Depression worst effects. Do you have numbers to specifically back up your assertion that is regression analysis looking at the effects of the tariff both beneficial and harmful or is this your or some other economists "gut impression."

I further note the Fordney-McCumber(SP?) tariffs of the 1920's which were the larget tariff increase until that date seem to have resulted in Boom years but that is also unproven and may be just an historical coincidence. There are analysis out there in print that show teh Textile tariffs of the 1800's provided a net benfit to the American textile industry. Further there is an analysis of China trade using the full regression analysis technique for both the positive a negative side showing a net benefit from tariffs vis a vis China.

I really have been looking for such a piece of analysis as it would tend to validate those who believe in the theories of Adam Smith and David Riccardo. However, even if we use Riccardo and Smith tariffs would still be justified for the USA to levy against China as Smith notes four reasons for tariffs: Defense, Retaliation, Cracking open markets, and Encouragement of domestic industry.

I have done my homework on this issue and I note the current traiff structure under the WTO is very much a wealth transfer plan becuase of the special considerations given developing nations.

13 posted on 09/26/2003 9:49:32 AM PDT by harpseal (stay well - Stay safe - Stay armed - Yorktown)
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