Posted on 10/13/2005 9:28:50 AM PDT by Willie Green
There were no "retaliatory" tariffs or "trade wars" as a result of Smoot Hawley.
The truth is, two-thirds of U.S. imports under Smoot-Hawley came in duty-free, and when the tariff was enacted, more items were added to the free list than were taken from the free list and made dutiable.
Furthermore, there's little evidence that American exports were affected by Smoot-Hawley. Exports fell to countries that were not impacted by the tariff as well as to countries that were impacted by it.
The decline in international trade was a RESULT of the global depression, NOT a CAUSE of the depression. And there is absolutely no evidence of countries imposing "retaliatory" tariffs in response to Smoot-Hawley. Most governments were more concerned with stimulating their own domestic economic recoveries rather than whatever minute proportions that could be spared for trade.
How then do you propose to make it mandatory they pass these savings on to customers?
I don't. That must be one of YOUR marxist wetdreams. As far as I'm concerned, they'd be free to competitively lower prices if they wish, distribute the savings to shareholders as dividends, or use the money to reinvest in plant and equipment.
So what you are saying here is that the politicians are not corrupt it is the MONEY that is FORCING them to pass these trade deals?
Nope. I'm saying BOTH parties to the transaction are corrupt.
Really? Maybe you ought to peddle your beliefs to this guy: *********************************************************** "The business reality of Smoot-Hawley was far worse. 1,028 economists had earlier petitioned President Hoover to veto the bill, but with enactment, tariffs hit all-time levels on some 70 agricultural products and 900 manufactured items. The economists had warned that S-H would raise prices to consumers, damage export trade, hurt farmers, promote inefficiency and promote foreign reprisals. As to the issue of increased prices, you saw in a piece I did two weeks ago that consumer prices actually collapsed in the years 1930-32, a point that we will come back to. As for foreign reprisals, nations were outraged. Historian Richard Hofstadter called the tariff act, "a virtual declaration of economic war on the rest of the world." Within two years, 25 countries had retaliated and U.S. foreign trade took a huge hit. America had exported $5.24 billion in goods in 1929 and by 1932, the total was just $1.6 billion. http://www.buyandhold.com/bh/en/education/history/2002/smoot_hawley.html *********************************************************** BTW, I am not against lowering taxes on corporations. In fact I believe they ought to be removed entirely. You are right in saying the market place will take care of the pricing. Corporations effectively pay no tax anyway since it is all figured into the cost of bringing their product to market. I also do not believe corporations are corrupt in trying to get their elected officials to enact legislation favorable to their company. It is the duty of a company to make money for it's stock holders. It is incumbent upon the politicians to exercise restraint while accepting donations by letting the donor know that the acceptance of the donation in no way indicates a promise to perform on the part of the politician..
Really.
Many nations of that time embraced the idea that retaliation would be counterproductive. They feared antagonizing Congress or a grass roots brushfire of nationalistic patriotism among U.S. citizens that might lead to discrimination of their imported goods. Historical records show that the Smoot-Hawley tariff did little to encourage foreign countries to retaliate with high tariffs of their own. In May 1931, the State Department report found that "by far the largest number of countries do not discriminate against the commerce of the United States in any way." Data from the U.S. Commerce Department show that the reason for the severe drop in exports in almost every American export industry was because of economic problems related to the depression, not foreign retaliation for higher U.S. tariffs. Some U.S. exports, however, did see significant gains in foreign market share. Exports of apples, pears and grapefruits increased. Exports of prunes went up 31 percent, and exports of dried apricots soared higher by 72 percent. Exports of raw materials such as cotton and rayon held steady. Exports of American films increased 49 percent, and exports of false teeth rose 24 percent.Myths of the Smoot-Hawley Tariff
When we start paying our workers a dollar an hour, we'll get our industries back - having cut out the transportation costs from China.
If what they do isn't against the law, who are you to pass judgment on what constitutes a breach of security? Isn't that why we have export laws and punishment for those who violate them?
There are around 23 million small businesses in this country which make up 97% of all identified exporters. How many of these folks do you think are intentionally violating existing export laws and are willfully compromising national security?
The poster I was responding to said There are not many American companies left, most are multinationals who only have loyalties to money. Is this a statement you want to defend? Are you ignorant enough to believe that there are not many American companies left here and that any American based company, with facilities in another country (the definition of multinational), has loyalties only to money - not country? If so, maybe you also need to meet some vets I know who operate these businesses.
You said the natural goal of profit maximation is at odds with "security". If this is a natural goal, then you believe that without export laws, American businesses would sell out their country in the pursuit of profits. Is this what you're saying? Sure sounds like it. If so, this is not only grossly untrue, it is also the height of cynicism.
If there were no export laws, some people would certainly take advantage of it and do things that would compromise our national security. We have export laws in place to protect against these types of people/companies.
The vast amount of American businesses are made up of patriotic, moral and ethical people who would never knowingly do something that would compromise the security of their family or their country.
You want to get into the gray area of what the intent and spirit of the law involves. Just because one person says that we shouldn't sell product X to a foreign country doesn't mean it presents a real risk to national security. FR is filled with folks who believe that any trade with specific countries is a risk to national security. Who should determine what is beyond the spirit and intent? You? That's why we have the laws and courts.
My using vets as an example is to counter the feelings of some here that all businesses, regardless of who runs them, would sell out their country for the additional income. Yes, some would, but the vast majority would not and that's really the point.
Really? How else should someone interpret the natural goal of profit maximation is at odds with "security?"
If it's natural for a businessman to choose profit over security you are, in effect, indicting all of those who are motivated by profit.
Now you are rephrasing this statement to say that only some would do such things if given the opportunity.
If a business pushes the envelope beyond the spirit and intent of the law, don't you think they are in fact breaking the law? To essentially accuse people of breaking the law by couching it as "pushing the envelope" and violating the "spirit and intent" of the law just for the money, when they are not really breaking the law, seems very cynical to me.
Are you trying to judge the health or sickness of an industry based solely on employment? By that standard, agriculture has been the sickest industry of all for decades because employment has declined - although farm productivity rose dramatically in the past century. Industrial health is better measured by output, productivity, profitability and wages. We manufacture more now than at any other time in our history, wages are rising and Americans are the most productive workers in the world.
The best measure of comparative productivity levels is real GDP per employed person. According to the Bureau of Labor Statistics, in 2002 the United States continued to lead the world in this category.
You should also realize that much of the change in industrial employment is an effect of changes in the classification of various jobs. Big companies used to do everything in house, so that people like janitors and accountants were classified as "manufacturing" workers simply because they worked for manufacturing companies. These companies discovered that it was more economical to outsource such work. That is why "business services" is one of the fastest rising categories of employment in the United States. Since 1995, 25% of all the new jobs created here have been in professional business services.
From 1995 - 2002, China lost 15 million manufacturing jobs while the U.S. lost 2 million. Most of these losses were due to productivity gains.
Since 1992, industrial production in the U.S. is up 50%.
But thank you for the chart.
Must be why we have the best congress money can buy...
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