Wednesday, December 14, 2011

Debunking Yet Another Myth

In May of 1930, 1028 economists (from across the political spectrum, from Irving Fisher to Rex Tugwell) penned an open letter to President Hoover pleading with him to veto the Smoot-Hawley tariff legislation. They subsequently had the letter published in the "New York Times" editorial section. Here, folks, is a sample of the language............."We are convinced that increased restrictive duties would be a mistake. They would operate, in general, to increase the prices which domestic consumers would have to pay. By raising prices they would encourage concerns with higher costs to undertake production, thus compelling the consumer to subsidize waste and inefficiency in industry. At the same time they would force him to pay higher rates of profits to established firms. Few people could hope to gain from such a change."............These same economists went on to predict that "many countries would pay us back in kind" and that we simply "cannot increase employment by restricting trade.".................................................................................................And it wasn't simply those in America who were attempting to warn old Hoover. "Le Quotidien" in Paris published an editorial entitled, "Can Mr. Hoover Limit the Catastrophe Which American Protectionists Are Preparing?" Amongst the meatier elements of this missive was an admonition which stated that, "There will be nothing for us to do but to resort to reprisals, and that would mean war." Another predictive warning came from GM's European director, Graeme K. Howard. In a telegram sent directly to the White House, Mr. Graeme sternly predicted that the passage of Smoot-Hawley "would spell economic isolation for the United States and the most severe depression ever experienced."...............................................................................................And on and on it went. Now, is there an argument to the contrary here? Yeah, I suppose so. But to say that the belief that the Smoot-Hawley Tariff Act contributed to the Depression is nothing bit a right-wing myth is absolutely and categorically incorrect. Paranoiac is essentially what it is.

31 comments:

dmarks said...

Trade decisions are best left to the people, not the State.

Will "take no prisoners" Hart said...

I'm not a never say never kind of guy, dmarks, but, yeah, on this particular issue, I tend to agree.

Chakam Conservative said...

dmarks,

Agreed.

Rusty Shackelford said...

WD has'nt been by to debunk your debunk?

Truth 101 said...

The world was in depression or soon to be. How would Smoot-Hawley have made a difference?

And just to continue my mission of jacking with Dmarks, you're nuts Dmarks. How are individuals and companies going to compete with countries like China that use currency manipulation and trade policy?

Brazil is jacking with oil companies now in an effort, imo, to benefit it's state run Petrobas. Chevron is big and mighty but not as big and mighty as Brazil or China. or Russia.

Need government dude.

w-dervish said...

It's a Rightwing myth. The Smoot Hawley act did NOT contribute to the Republican Great Depression. I don't know what the hell paranoia has to do with it.

Will "take no prisoners" Hart said...

Yes, wd, all 1028 of those economists were right-wingers. And so, too, are John A. Garraty and Wikipedia. You're unbelievable, man.

Will "take no prisoners" Hart said...

Truth, after the 1929 stock market crash, unemployment never reached double digits in any of the 12 months following that event, peaking at 9 percent, then drifting back downwards until it reached 6.3 percent in June 1930. It wasn't until Smoot-Hawley was passed that the unemployment rate started to skyrocket. That, and it skyrocketed even further after Mr. Hoover raised taxes all the way to 63% (the top rate).............Only 14 Democrats in the House actually voted for this turkey, btw. This was purely and simply a Republican fiasco.

w-dervish said...

Will: Yes, wd, all 1028 of those economists were right-wingers. And so, too, are John A. Garraty and Wikipedia.

This statement show what a deluded and weaselly little liar Will is. He lies and says what I believe is, instead of simply being wrong, all the people he cite were part of some grand conspiracy. To blame Smoot Hawley for something that hadn't happened yet (the depression staying bad).

dmarks said...

WD said: "The Smoot Hawley act did NOT contribute to the Republican Great Depression."

As Will has proven, there's overwhelming evidence that it did.

Truth: No way am I 'nuts' for opposing greed, and wanting the people to decide these matters instead of ruling elites. Deal with the Chinese trade manipulation some other way besides the insane depression-risking tactic of tariffs. Tariffs punish the average American, mostly middle class and poor for making their own informed economic decisions. And it's just another tax. The ruling elites plundering us.

As for the Brazil situation, does this mean you support a more level playing field, and now oppose the Democrats' very greedy plan to clobber American oil companies with excessive tax hikes?

Will said "This was purely and simply a Republican fiasco."

True. Many Republicans then and since have supported such destructive policies against free and fair trade. Pat Buchanan is one of those who joins those on the left (and right) in this jingoistic cause.

Will "take no prisoners" Hart said...

Dude, you've consistently said that Smoot-Hawley causing the Great Depression is a right-wing myth - i.e., that only right-wingers believe that. I have proven categorically that that ISN'T true, that economists, politicians (FDR was against it, for Christ!!) and historians from across the political spectrum were against it. You were wrong. Just admit that you were wrong.

Will "take no prisoners" Hart said...

dmarks, I can't say for certain that Smoot-Hawley caused the Great Depression. But it does seem rather curious that the unemployment rate was actually coming down in 1930 and it only started spiking up AFTER the tariff bill was passed. And then it really stated spiking up when Hoover draconianly raised taxes.

w-dervish said...

Will: You were wrong. Just admit that you were wrong.

Why the hell would I "admit" I'm wrong? I'm not wrong. I'm right. You should admit that you're wrong.

As for your claim that I think the economists you cite were part of a conspiracy to create a myth... something can't be a myth until the events that the myth are based on actually happen. Therefore Smoot Hawley contributing to the Great Depression could NOT be a myth BEFORE Smoot Hawley passed. The economists you cite were simply wrong. duh.

I always knew you weren't the sharpest tool in the shed Will, but I thought you'd be able to figure that out.

dmarks: ...this jingoistic cause.

Every government should be concerned with the economies of their own nations first and foremost. This isn't jingoism! People who say it is may or may not be nuts... but they sure as hell are idiots... or liars who believe the people they're lying to are idiots.

Will "take no prisoners" Hart said...

You SAID that it was a theory that ONLY right-wingers adhered to, oh uneducated one. That is false. It was a theory that many from across the political spectrum adhered to then AND subsequently; John A. Garraty (one of the finest historians of the 20th century and NOT a right-winger) and wikipedia, for example. Rexford Tugwell and Irving Fisher were wrong and wd and Thom Hartmann are right. What an absolutely pathetic and deluded universe that you live in.

w-dervish said...

Truth 101: The world was in depression or soon to be. How would Smoot-Hawley have made a difference?

Truth101 is a very wise individual. You are absolutely correct. The Smoot Hawley legislation did not make a difference. I've posted a rebuttal on my blog titled, "Will Hart Bunks Yet Another Conservative Myth".

I encourage people to read my post and then leave a comment saying who you think is right: w-dervish (the individual with the facts on his side), or Will Hart (who cites before-the-fact opinions of economists who have since been proven wrong).

Will: You SAID that it was a theory that ONLY right-wingers adhered to, oh uneducated one... Rexford Tugwell and Irving Fisher were wrong and wd and Thom Hartmann are right.

I said it was a conservative myth, which is NOT the same as saying ONLY right-wingers believe it. Tugwell and Fisher are wrong, but it is the facts (see my post) that prove them wrong, not me or Thom Hartmann.

Will "take no prisoners" Hart said...

The facts are that unemployment never hit double digits in the 12 months subsequent to the stock market crash and the rate was actually coming downward UNTIL President Hoover (who I guess that you agree with and think that FDR was full of shit on this one) signed Smoot-Hawley. THOSE are the facts.............And how can it be a conservative myth when historians, politicians (Clinton AND Gore, for Christ), and economists FROM ACROSS THE POLITICAL SPECTRUM hold this view? My God, are you an idiot.

Will "take no prisoners" Hart said...

And I'm not making an absolute declaration either way here. I, unlike you, understand the basic rules of epistemology and that there are probably numerous possible causes of the Great Depression; excessive war debt, idiotic decision-making by the FED, etc.. My only point is that your assertion about Smoot-Hawley being a right-wing myth is palpably absurd/provably wrong.

Rational Nation USA said...

WD rarely gets anything right.

w-dervish said...

Smoot-Hawley contributing to the Great Depression is a right-wing myth. You're a right-winger (or a right-wing dupe) for pushing it.

Clinton bought into in (signed NAFTA) and now so is Obama. They are Democratic presidents, but that doesn't change the fact that "free trade" being good is a Right-wing/Conservative myth.

Sorry Will, but the facts prove YOU palpably and absurdly wrong. You should just admit it.

Rational Nation USA said...

wd - woof, woof...

Will "take no prisoners" Hart said...

See what I have to deal with, Les? It's a right-wing myth DESPITE the fact that politicians, historians, and economists from across the ideological spectrum have proffered it/Republicans were largely responsible for passing it. The dude is just flat-out insane, I'm thinking.

Truth 101 said...

I support oil companies and everyone else paying taxes in accordance with how much they benefit from the largess and protection of our government Dmarks.

Why don't you want Exxon and Chevron to pay their fair share?


And dudes; other than the outstanding Blogger WD who's outstanding blog I will be visiting soon, tariffs and the threat of them keep other nations honest. As Reagan said "trust but verify."

Will "take no prisoners" Hart said...

Truth, I'm not one of those people who say that there ISN'T an upside to protectionism. I'm just saying that there are also unintended consequences to it; retaliatory measures (China, for instance, just slapped a 21% tariff on American made cars - no, it isn't a huge market YET but 4 billion a year is hardly chicken scratch), pain administered to consumers, the damaging of emerging markets/countries. Sure, my friend, there may be times that we have to look at it but it has to be the very last resort.

Truth 101 said...

On behalf of Whirling Dervish and myself, we accept your apology Mr. Hart.

Will "take no prisoners" Hart said...

I was just going to make another point about the ill-will that protectionism can often foster (Germany and Japan versus America in the '30s, for example) between competing nations but you, YOU, had to get all mushy with me.............Oh well, let's go back to bashing Mr. Gingrich. On that particular issue, were in total sympatico.

dmarks said...

Truth said: "I support oil companies and everyone else paying taxes in accordance with how much they benefit from the largess and protection of our government Dmarks."

I support that 100%

"Why don't you want Exxon and Chevron to pay their fair share?"

These companies already pay a massive amount in taxation. Quite a fair share.. However, I oppose forcing them to raise gas prices and do other harmful things, which is why I opposed the Democrats' plans to further overtax them.

"tariffs and the threat of them keep other nations honest. As Reagan said "trust but verify."

They don't keep anyone "honest" at all. They only cause trade wars and ding the pocketbooks of the middle class people who have to pay them.

It's high time for paying for the fair value of things. $0 tariffs all around.

Truth 101 said...

When China and the other nations elimninate their barriers and recognize human rights I'll be glad to join you Dmarks.

dmarks said...

Truth: Then find some way to do this that involves punishing China, instead of Americans.

Will "take no prisoners" Hart said...

Truth, how do you get around the fact that China currently owns a boatload of our recent obligations (that whole "it isn't a good idea to piss off your banker" argument)? Does not that make it a little dicey?

Truth 101 said...

it's app. 10% of our national debt the last I checked..

And just who is going to make us pay if we decide not to Will?


And why does Dmarks have so little faith in America that he thinks an American factory can't make our toasters and blenders and other goodies? That goes for you to Will. Shame on you two for doubting the greatness of America.

It's revealing that Dmarks really ahtes American Workers with hes passioned defense of foreign labor. An American Worker isn;t worth an extra few cents on the price of his tshirt. Shame on you Dmarks.

Will "take no prisoners" Hart said...

Nobody's going to MAKE us pay, Truth. They just won't lend to us anymore.