There’s nothing ‘unprecedented’ about Trump’s policies. They gave us the Great Depression a century ago
Posted by LosIsosceles
There’s nothing ‘unprecedented’ about Trump’s policies. They gave us the Great Depression a century ago
Posted by LosIsosceles
4 Comments
What did you think the ‘Great’ in ‘Make America Great Again’ was for?
> High American tariffs throughout the interwar years placated domestic demands for farm and industry “protection” but ultimately undermined international trade and diplomacy. In 1922, for example, the Fordney-McCumber Tariff reduced trade with Europe by implementing a nearly 40% tariff on imports. Under the heavy yoke of the Versailles reparations that Germany was struggling to meet, European nations retaliated with a tariff war, just as they are currently promising. They also quit buying our stuff.
Jesus, this is starting to sound like a repeat.
Okay, so the thing is the tariffs can be dumb without being primarily or even majorly responsible for the Depression. Compounding failures in the banking system along with poor Fed policy led to a sustained collapse in the money supply. Then long term policy uncertainty, mostly related to the New Deal, drove a bad hiring environment that restricted a rebound for years.
Tariffs played a part in the latter, and certainly dampened overall economic activity, but the tariffs alone were a minor part of a broad set of policy failures.
It’s been a second since I’ve read Friedman and Schwartz’s “U.S. History of Monetary Policy” and Bernanke’s work, but I believe the consensus is that U.S. monetary policy is what brought the Great Depression. More specifically tight monetary policy. Someone correct me if I’m wrong.
Tariffs suck but no need to exaggerate their damage.