[UCFRoadWarrior]

Did the Smoot-Hawley Tariff Act really cause the Great Depression? Did Smoot-Hawley really continue the Great Depression? The evidence does not support those contentions

[Mase]

The evidence does not support those contentions

Caused the great depression? No one who understands the issue should ever make that claim. Only the most economic illiterate among us would believe that the total collapse of world trade didn't prolong and deepen the depression even though, throughout history, a collapse in global trade always led to global recessions and depressions.

[Choose Ye This Day]

Did Hawley-Smoot cause the Great Depression? No, it was well underway. Did it help continue the GD? Yes, unemployment continued to go up, trade went down. That’s not a positive.

From the Dep’t of State:

Scholars disagree over the extent of protection actually afforded by the Smoot-Hawley tariff; they also differ over the issue of whether the tariff provoked a wave of foreign retaliation that plunged the world deeper into the Great Depression. What is certain, however, is that Smoot-Hawley did nothing to foster cooperation among nations in either the economic or political realm during a perilous era in international relations. It quickly became a symbol of the “beggar-thy-neighbor” policies of the 1930s. Such policies, which were adopted by many countries during this time, contributed to a drastic contraction of international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934.

[Mase]

Hey Warrior, why not link us to the site where you found the chart you're unable to post? I'd like to know what kind of resources you employ to support this nonsense.

Why is it you protectionists conveniently forget that the very protectionism you defend was in large part responsible for the federal income tax we suffer under today?

"From the same article: "In the election of 1888, Republicans called for tariffs to protect American manufacturing. Benjamin Harrison's defeat of Democrat free trader Grover Cleveland led to passage of the McKinley tariff in 1890. An interesting aspect of the 1890 debate over the tariff is that protectionists abandoned any pretense that high tariffs were needed to protect infant industries. Even mature industries, they argued, needed protection. They further argued that high tariffs were needed to reduce the Treasury's surplus. They understood that sufficiently high rates would so discourage imports that tariff revenues would fall.

Protectionist tariffs remained the bedrock of economic policy of the Republican Party for the next 20 years. Indeed, Republicans were so intent on passing the Payne-Aldrich tariff in 1909 that President William Howard Taft supported the 16th Amendment to the U.S. Constitution creating a federal income tax as the political price for Democratic support of the tariff. That has to have been one of the worst deals in history -- a lose-lose situation if ever there was one."

The Truth about Trade in History

[hedgetrimmer]

Nice! Thanks for posting.

If you have a “free trade” ping list, please put me on it.

[Will88]

The great depression and its offspring, the New Deal, could both have been avoided if the Federal Reserve had performed the task assigned to it. All the Federal Reserve had to do to avoid the Depression and the subversion of the American constitutional order was to purchase $1 billion in government securities during the 10-month period from December 1929 to October 1930. The result would have been an increase, instead of decrease, in high-powered money, and the banking crisis that began in the autumn of 1930 would not have occurred.

From a great Hoover Institution article on the Great Depression:

Link Description

I think it's now generally agreed, or almost generally agreed, that the Fed action was the cause of the GD. And I don't think Smoot-Hawley is even mentioned in the article, though the manifold government spending programs are discussed a great deal. And the Fed shrunk the money supply by 30%.

[org.whodat]

You are correct, but there are many reading disabled people.

[Hawthorn]

So you think free trade is bad.

Milton Friedman thought it was good. Tom Sowell agrees. So does every other competent economist. I’ll take their opinions any day.

Case closed.

[paulycy]

Oops, sorry, wrong thread.

I was looking for Small Hooters.

[conservatism_IS_compassion]

The Smoot-Hawley Tariff Act, passed in the summer of 1930 in the wake of the Great Depression,

1. I think you meant to say, "passed in the summer of 1930 in the wake of the Stock Market Crash in October, 1929"; the Great Depression lasted until the start of WWII.

2. I read somewhere that the crash of '29 occurred on rumor that Smoot-Hawley would be passed and would be signed into law.

[Will88]

Another great article on the Great Depression: The Great Depression According to Milton Friedman

Fed action caused the GD, and Smoot-Hawley was a minor and greatly exaggerated element, along with many others that were enacted after the Fed's shrinking of the money supply had set things in motion.

And, a 30% reduction in the money supply affect every type of business activity, including the import/export business.

[Rameumptom]

This is why I love FR. You both are speaking above my pay grade on the issue. So I am learning.

Trivia point. Smoot was the first Mormon Senator. He's from from Utah and Congress took 4 years of hearings to seat him (He was Republian of course)

http://en.wikipedia.org/wiki/Reed_Smoot_(U._S._Senator)

I don't know much about Hawley. Wiki says he was an economist. Hoover signed the bill. He became Pres. in March, 1929 and the crash was in Oct. Though there was a downward trend before that. Coolidge was the Pres. in 1929 so a full debate would need to include his approach to the economy and what effect that did or did not have on the actual crash. Coolige and Hoover had different economic approaches to the issue. (Sort of like a real deabte about 9/11 could not just focus on the few months Bush was in office and some of the things he did post 9/11.)

I'll openly admit i don;t really understand the entire issue. My non economist take on the issue after reading through this informative thread is that it may or may not have had a huge impact on the depression. IOW, I don;t know. My take is that a Depression has a lot more to do with than just one thing or even one President.

[traviskicks]

‘conservatives’ in favor of government limiting free trade, always surprising to me. Free trade will occur unless it is limited by government. Free trade has been one of the greatest uplifters of prosperity, it has always been the democrats and unions and communists (self sufficient communal villages etc..) that limit free trade.

[Sandy]

Your chart, formatted:

[familyop]

You’ll find some of the more relevant numbers from your chart below, UCFRoadWarrior, in a somewhat more readable format. Please FR-mail your source to me, if it’s online. In the future, at least one of us will help you with HTML formatting of online information. And do cite sources.

Less than four years was actually pretty quick for economic improvement from the Smoot-Hawley Act. Imports and exports even went up. As for the various political propagandists for the thieves these days, they do make us angry. We’re not as stupid as they are.

(Figures in billions of dollars)

Gross
domestic
product

1929: 103.6
1930: 91.2
1931: 76.5
1932: 58.7
1933: 56.4
1934: 66.0
1935: 73.3
1936: 83.8
1937: 91.9
1938: 86.1
1939: 92.2
1940: 101.4

Personal
consumption
expenditures

1929: 77.4
1930: 70.1
1931: 60.7
1932: 48.7
1933: 45.9
1934: 51.5
1935: 55.9
1936: 62.2
1937: 66.8
1938: 64.3
1939: 67.2
1940: 71.3

Gross
private
domestic
investment

1929: 16.5
1930: 10.8
1931: 5.9
1932: 1.3
1933: 1.7
1934: 3.7
1935: 6.7
1936: 8.6
1937: 12.2
1938: 7.1
1939: 9.3
1940: 13.6

Exports

1929: 5.9
1930: 4.4
1931: 2.9
1932: 2.0
1933: 2.0
1934: 2.6
1935: 2.8
1936: 3.0
1937: 4.0
1938: 3.8
1939: 4.0
1940: 4.9

Imports

1929: 5.6
1930: 4.1
1931: 2.9
1932: 1.9
1933: 1.9
1934: 2.2
1935: 3.0
1936: 3.2
1937: 4.0
1938: 2.8
1939: 3.1
1940: 3.4

Government
consumption
expenditures
and
gross
investment

1929: 9.4
1930: 10.0
1931: 9.9
1932: 8.7
1933: 8.7
1934: 10.5
1935: 10.9
1936: 13.1
1937: 12.8
1938: 13.8
1939: 14.8
1940: 15.0

[jveritas]

You premise is wrong. No one is saying that Smoot-Hawley caused the depression but for sure its prolonged and made it deeper.

A trade war is a disaster. Most of our import in dollar values are raw materials including oil. What we export are manufactured goods, food, machines, cars, very advanced equipments, weapons, software, and agricultural products. In other word a trade war will hurt our industrial and agricultural sector a lot.

[Thorin]

You are absolutely correct. Milton Friedman admitted as much.

[Eva]

Hey, I don’t know what you union guys are getting so excited about. I just heard that 300,000 of the jobs that are included in the “shovel ready” projects are slated to go to illegal aliens.

[Freedom56v2]

Bump for later reading :)

[nyconse]

Warrior please ping everyone...I have a buy America vanity. Here is the thread...Stop the madness. I don’t like stimulus but if it will happen GOP pork added so it appears likely...Buy America must remain.

http://www.freerepublic.com/focus/news/2178848/posts?page=8

[nyconse]

Warrior please ping everyone...I have a buy America vanity. Here is the thread...Stop the madness. I don’t like stimulus but if it will happen GOP pork added so it appears likely...Buy America must remain.

http://www.freerepublic.com/focus/news/2178848/posts?page=8