“In 1930, the Republican controlled House of Representatives, in an effort to alleviate the effects of the… Anyone? Anyone?… the Great Depression, passed the…Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act which, anyone? anyone? Raised or lowered?… Raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression.”
Ben Stein got famous for delivering these lines to a disinterested group of high school students in Ferris Bueller’s Day Off (see the scene here). The expressions on the faces of the students, or the lack there of, are a reflection of the dimwitted electorate. Boredom and indifference until it’s too late.
The Hawley-Smoot Tariff Act was a piece of protectionist legislation signed by Herbert Hoover, which raised tariffs on 20,000 imported goods into the United States. Hoover signed the law on June 17, 1930. The act is thought to have been a major factor for causing and prolonging the 1930’s Great Depression. In the end, Hoover was largely blamed for the crisis.
While not as bad as Smoot-Hawley, at least not yet, the Obama administration, at the behest of the unions, has decided to place tariffs on Chinese tires. This seems like a small thing, but the retaliatory response from China looms large. Once you start protecting one industry, there will be calls from other industries asking for the same protection. Who gets hurt? Consumers. Prices will rise and cause layoffs in other industries. What was the response of the international markets that fear a trade war is coming? A precipitous drop. Germany’s DAX fell 1.4 percent to 5,544.71 and Britain’s FTSE 100 lost 1.0 percent at 4,962.90. France’s CAC-40 shed 1.4 percent to 3,683.72. Asian indexes lost as much as 2 percent and Wall Street was expected to fall later. Dow industrials futures were down 81 points at 9,450.00 and Standard & Poor’s 500 futures slipped 9.90 points to 1,027.40.
Please Mr. President, rent Ferris Bueller’s Day Off, and unlike Ben Stein’s students, pay attention!