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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (1431)	9/7/2002 11:24:31 PM
From: craig crawford	Read Replies (1) \| Respond to of 1643

>> The link between the HS act and the depression is intuitive in respect to the fact that the USA exported most of it's manufactured goods in 1930. Trade barriers would not help those exports << history seems to show the opposite. in the half century following the civil war britain practiced unilateral free trade and america engaged in heavy protectionism. the u.s. went from half of britain's productive capacity to twice that amount. in 1914, at the tail end of the protective era in america, the united states accounted for 36% of industrial exports. britain produced nearly 25% of industrial exports in 1850 before their venture into free trade. so there is no evidence to support the notion that the high tariff wall in america did anything to slow down exports. in fact, they exploded under protectionism. >> There is also evidence that when the HS act went into force the unemployment shot up from 6% to 17%. << just because unemployment went up after smoot-hawley does not mean the two are positively correlated. in 1939, five years after fdr had rolled back smoot-hawley with the reciprocal trade agreements, 10 million were still unemployed. exports were $5.2 billion in 1929. in 1939, five years after the trade act of 1934 was passed and tariffs were rolled back, exports were still less than $3.2 billion. same for imports. 1929 $4.4 billion, by 1939 barely more than half at $2.3 billion. if protective tariffs were supposedly the disease, it appears that consequently lowering the tariffs was not the cure. furthermore, the fordney-mccumber bill in 1921 doubled tariff rates and president harding slashed wilson's war income tax from 63% to 25%. what followed? the roaring twenties, with 7% growth and a larger increase in america's share of world exports. funny, i don't hear anyone blaming the doubling of tariffs in 1922 for the roaring twenties! when smoot-hawley was passed imports were only 4% of GDP. two thirds of imports came in duty free! the tariffs only covered a third of imports, or 1.3% of gdp. a tax hike on 1.3% of gdp caused a 46% contraction in the economy and 25% unemployment? don't think so... let's not forget that in 1932 hoover raised the income tax from 25% to 65%. FDR increased it even more, to 79%. hmm...let's see here. harding slashed wilson's tax rates and with fordney-mccumber doubled tariff rates (dubbed the highest tariff in american history). roaring twenties. hoover jacked up tax rates again and fdr jerked them up even higher, yet a tariff on only 1/3 of imports which only made up 4% of gdp is to blame for the massive contraction in world trade?? NOT! near the onset of the great war the ratio of world trade to output hit an unprecedented 21% in 1913, more than double the 10% level of 1870. so much for free trade leading to peace and interdependence among nations. germany attacked its largest customer, russia. the ratio of world trade to output fell back down to 16% by 1929 and then all the way down to 10% by 1938. so the contraction in world trade had started long before smoot-hawley in the second half of 1930. the animosities felt in the aftermath of world war one and the collapse in the gold standard and its associated currency implications had far more impact on the collapse of world trade than smoot-hawley ever did. that doesn't stop the free traitor globalists from trying to revise history to their benefit however! for example: "This century has taught us...that isolationism and protectionism lead to war and deprivation." --George Bush "It played no significant role in either causing the depression or prolonging it." --Milton Friedman on the Smoot-Hawley Tariff