Timothy Birdnow

Tariffs would lead to a decline in trade, they told us. Didn't happen.

I just had a lengthy argument on Facebook with a guy who just insisted the tariffs have ruined the economy. No amount of data could dissuade him from his quasi-religious belief in what he misnames "free trade".

This notion that tariffs are somehow evil and bring poverty are entirely predicated on one example - Smoot Hawley from 1930. SH was a bad idea at that time because the country was already sliding into the Depression and we didn't need a tax increase but the fact remains it was not the cause but actually more of an effect. European nations began imposing high duties on American goods because they were losing money thanks to declining sales in the U.S. So we retaliated with tariffs of our own. But that had nothing to do with the Deppression, which was caused by the Federal Reserve contracting the money supply by a whopping 30%, causing markets to seize up and the economy to shrink away to nothing. That was the true cause of the Great Depression. It was not helped by the Hoover interventionist economic policies, which made markets unsure. Roosevelt, who ran as a moderate because Hoover's policies were too interventionist he claimed, doubled down on Hooverism once in office. That was the very worst thing anyone could do, take money from the few who had it and redistribute it with such things as the WPA (Short for We Piddle Around as my dear old great grandmother used to say.)

At any rate that was one of the very few cases that suggest tariffs are damaging to the economy, and it turns out not to be the case by and large In the early '20's both Harding and Coolidge imposed tariffs and the economy roared.

Tariffs ae not the boogieman we have been led to believe.

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