Posted on 03/05/2002 5:19:23 AM PST by Valin
Edited on 04/13/2004 3:36:16 AM PDT by Jim Robinson. [history]
Smoot-Hawley had negligible effect on the Great Depression.
Similar to the Dotcom frenzy of the '90s, Wall Street records were fueled by over-leveraged, speculative investments in The Roaring Twenties. This same boom extracted capital away from the sundry & arcane policies of European countries. When the bubble burst (8 month's prior to Smoot-Hawley), margin calls led to a domino-effect of bankruptcies and bank failures. There just plain WASN'T any capital around for the private sector to invest.
Europe created their own barriers to investment during the '30s with the rise of Hitler, Mussolini and the Spanish revolution.
Attributing the economic ills of the Great Depression to Smoot-Hawley is nothing but pure, unadulterated "Blame America First" globalist revisionism.
I noticed that you didn't "refute" the "fact" that 25 countries imposed tariffs in response to Smoot-Hawley. Increased tariffs overseas virtually shut down exports.
Yeah, 25 countries with conflicting policies that stifled capital flow and investment no matter what they did.
A stituation Europe didn't seriously address until the formation of the European Union some 60-70 years later!
What'sa matter, bozo? Not even familiar with your globalist justifications for European "harmonization" of regulations and tariffs?
Blaming America and Smoot-Hawley for Europe's woes back in the '30s is a crock.
Are you interested in knowledge, or name-calling (the last refuge of people who have lost the argument)?
If you are interested in facts, consider the following:
From infoplease.com at:
http://www.infoplease.com/ce6/history/A0823033.html
The act brought retaliatory tariff acts from foreign countries, U.S. foreign trade suffered a sharp decline, and the depression intensified.
From Jude Wanniski, at:
http://www.polyconomics.com/searchbase/fles5.html
When Smoot-Hawley passed, the tariff wall caused goods destined for the rest of the world (ROW) to pile up on our side of the wall and goods from the ROW to pile up on the other side of the wall. This would mean only a recession, during the period when these surpluses were being liquidated and production redirected internally.
The "Crash" only brought market capitalization down by one-third, the Dow tumbling to 230 from 380. In fact, Treasury Secretary Andrew Mellon, who was a holdover from the Harding and Coolidge administrations, advised that capital be liquidated and labor liquidated as soon as possible. (If it had been up to Mellon, there would have been no tariff act, or it would have been very narrowly drawn to affect only farm goods, which is all Hoover promised in the 1928 elections.)
The problem was that first the error was compounded by foreign retaliation, which sent the Dow Jones average lower and lower. Then, it was multiplied as Hoover raised tax rates in order to balance the budget, as revenues had fallen sharply, principally because of the decline in tariff revenues. The U.S. economy spiraled and brought the world economy down with it.
From Charles Oliver, "It Takes Real Effort to Get Depressed," Investor's Business Daily, October 23, 1998. - reproduced at: http://www.ncpa.org/pd/economy/pdeco/ecoct98j.html
Every time the stock market wobbles, the specter of the 1930s Great Depression is raised. Many economists hold that such a scenario won't be played out again -- at least any time soon. The market crash of 1929 and ensuing events were "the result of a series of policy blunders," according to economic historian Robert Higgs of the Independent Institute.
Since then our understanding of economic causes and effects has vastly improved. Leaders in the former era were dumbfounded by events which seemed to overwhelm them. Their answer was the New Deal, which many economists now concede only made matters worse. Milton Friedman has traced the roots of the catastrophe to ill-conceived Federal Reserve policies and passage of the protectionist Smoot-Hawley Act.
Between 1921 and 1929, the U.S. money supply grew more than 60 percent, which -- by keeping interest rates low -- encouraged risky loans and excessive borrowing.
When the Federal Reserve suddenly began raising interest rates in 1929, business activity was choked off and profits began to fall -- precipitating the market crash.
Smoot-Hawley raised tariffs in 1930, sparking international trade wars and destroying markets for U.S. exports.
Two years later, Washington passed what was then the biggest peacetime tax increase in history -- then added insult to injury by establishing Social Security, which necessitated more taxes and added to labor costs.
As thousands of banks failed, the money supply dried up -- falling by one-third between 1929 and 1933. Wages and prices should have fallen -- which would have led to more jobs and greater sales -- but politicians did all they could to prop up wages. By 1933, unemployment peaked at 25 percent and gross national product hit bottom.
This series of disastrous policies only prolonged the agony, most of today's economists agree. By 1939, ten years after the crash, unemployment still stood above 15 percent -- despite huge, new and costly federal make-work programs.
I'm interested in facts.
Not the Million-Man-Math revisionism of Blame-America-First globalist lackeys like Wanniski & Oliver, et. al.
Their preposterous conclusions earn them any disdainful label that can be applied.
Not the Million-Man-Math revisionism of Blame-America-First globalist lackeys like Wanniski & Oliver, et. al.
Their preposterous conclusions earn them any disdainful label that can be applied.
Let me guess. You are union?
Nope. Never been in a union in my life.
I'm an engineer with an MBA, MANAGEMENT.
I don't put up with BS.
I don't put up with BS.
I'm a retired engineering manager - defense industry - and I wouldn't have hired you on a bet.
Domestic appliance industry.
Cost-plus government contractors can't hack real competition on the shelves on K-Mart.
Try telling that to the guys doing it in Afghanistan, etc.. I doubt that you'll see a radar for AWACS, the F-16, the F-22, etc., on the shelves of K-Mart.
By the way, didn't K-Mart just declare bankruptcy? Did you have a hand in that?
I repeat, I wouldn't have hired you on a bet. Unless, maybe, you aspired to take technician training.
Do they still make "domestic appliances" in the United States? The company that I worked for got out of that business a couple of decades ago.
BTW, I've noticed you posting all day today. Are you at work (Wink, wink)? Or taking a "sick day"?
And I sure as hell wouldn't have hired you.
In case you've forgotten, this thread deals with economic competition.
YOU and your cost-plus government contracts can't cut the mustard.
No, as a matter of fact, I was the engineering project manager in charge of starting up the Korean joint-venture.
Semi-retired, self-employed consultant. I've done well.
Joint venture on what, Kimchi importation?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.