Friday, September 26, 2008

Smoot-Hawley Tariff act

Smoot-Hawley act-

The act was pioneered by Senator Reed Smoot, a Republican from Utah, and Representative Willis C. Hawley

After the economic downturn and crash of 1929, Smoot Hawley was enacted and it was a Very Popular move, Enacted by our Legislative branches.

When running for president in 1928, one of Hoover's many campaign promises to help beleaguered farmers had been to raise tariff levels on agricultural products.

A petition was signed by 1028 economists in the United States asking President Hoover to veto the legislation, organized by Paul Douglas, Irving Fisher, James TFG Wood, Frank Graham, Ernest Patterson, Henry Seager, Frank Taussig, and Clair Wilcox.[5] Automobile executive Henry Ford spent an evening at the White House trying to convince Hoover to veto the bill, calling it "an economic stupidity".[6]J.P.Morgan's Thomas Lamont said he "almost went down on my knees to beg Herbert Hoover to veto the asinine Hawley-Smoot tariff,

(Interesting parallel as every business leader in the country and economist of any repute is begging our government to do something to Re-liquify banks Right now. Volker, Greenspan, Pimco, Jack Welch, Clinton, and even Paulson fell onto one knee to beg for passage.)

In the opinion of most economists, the Smoot-Hawley act was partially responsible for the severity of the Great Depression.[2][3]

Unemployment was at 7.8% in 1930 when the Smoot-Hawley tariff was passed, but it jumped to 16.3% in 1931, 24.9% in 1932, and 25.1% in 1933.[11]

For those of you who don't understand, I'm drawing a parallel between PASSING Smoot-Hawley........ and NOT doing everything we can to help Re-Liquefy banks right now.

Sometimes we take action because something is very popular by the voters, or Don't take action because something is unpopular. To disastrous results, It is expected that sometimes for our legislative branch to Rise above politics and do what is best for the country, regardless of it's popularity. Sometimes the best decisions are not popular. As the minority opinions against the war in Iraq have shown, and we are lucky if our politicians can take the heat for the correct decision as opposed to the Popular one.

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