6/18/2010

80 Years Since Smoot Hawley...And The Dems Want To Do It Again

It was 80 years ago yesterday, June 17th, that President Herbert Hoover signed the Smoot-Hawley Tariff Act into law, which instantly turned the Great Recession into the Great Depression. It was an act of trade protectionism that had exactly the opposite effect from the one intended. Call it an example of the Law of Unintended Consequences writ large.

Hoover and his congressional allies thought that reducing imports would strengthen the economy. Instead, it contributed to a collapse in world trade and the spread of protectionism around the globe. The lessons from this policy mistake are unfortunately all too relevant today.

The Smoot-Hawley tariff, conceived as a Republican ploy to gain the farm vote in the 1928 election, was a bad idea from the start.

It was one of the biggest mistakes the Republican Party ever got involved with.

It seems modern day Democrats are now looking to make the same mistake as the Republicans did in Hoover's day and for the same reasons. Should they pull it off, the unintended consequences won't be the same as those back in 1930. Instead, they'll be far worse.

Perhaps it's time for Congress and the President to stop punishing American businesses for succeeding here. Who knows, maybe new jobs will be created here as a result.