The cinematic classic “Ferris Bueller's Day Off” made the broader public aware of the greatness that is Ben Stein. Already a lawyer and speechwriter for Presidents Richard Nixon and Gerald Ford, Stein was cast as the atonal Economics teacher droning his students into stupor.
Stein was asked to improvise on camera a lecture. He chose to in part address one of the fundamental contributors to the Great Depression - anti-free trade protectionism. Specifically the 1930 Smoot–Hawley Tariff Act.
Purportedly passed to ameliorate the Depression, the Act “raised (United States) tariffs on over 20,000 imported goods to record levels.”
As Stein asks and answers in the flick, “Did it work? Anyone? Anyone know the effects? It did not work and the United States sank deeper into the Great Depression.”
Not a shocker. The less you inhibit the free exchange of goods and services, the greater the economic opportunities and growth. If you consciously constrict any portion of the economy, you will get less opportunities and growth.
In ways both seen and unseen. By preemptively proscribing some activities, you kill in the crib any creativity that could have ensued.
If - say, to protect the horse buggy industry - we had outlawed Henry Ford’s newly minted automobile, we would have lost inconceivable amounts of future economic activity.
Think of all the ancillary and tertiary businesses that exist because the car industry was allowed to develop a little less fettered. Whole sectors of the economy to service the car - and whole other sectors that couldn’t exist without it.
None of which would be here had the government made a dumb, preemptive automotive move.
We have been told incessantly that we are enduring the worst economic crisis since the Great Depression. (It’s not. For instance, the Jimmy Carter economy Ronald Reagan inherited was much worse.)
We’re entering Year Six of the non-recovery “Recovery” - because a lot of really dumb government policies have hindered growth. Bailouts, ObamaCare, Dodd-Frank and (other) new taxes to name but a few have fended off any sort of actual recovery.
Like, say, our government imposing the world’s largest corporate tax.
39.2 percent… Obvious to all but the ideo-illlogical is that this hampers our ability to compete with the planet….
Wouldn’t it be outstanding if we made it more attractive for these trillions to be brought home and invested here?
Yes, it would. Instead, we get more dumb government proposals.
Speaking of Smoot-Hawley - global free trade actually garnered a positive mention in President Barack Obama’s January State of the Union speech.
(N)ew trade partnerships with Europe and the Asia-Pacific will help them create more jobs. We need to work together on tools like bipartisan trade promotion authority….
It will also help us create more jobs - with this guy, we’ll take what we can get. Do his fellow Democrats get it? Not so much.
Which brings us to the just passed gi-normous, heinous Farm Bill.
For years, our ridiculous, bloated subsidy-and-tax farm law was only terrible domestic policy. But as a global farm market developed, it became yet another free trade impediment.
And it led other farm-exporting countries to erect their own free trade impediments. Lather-rinse-repeat - decades later the we have turned the global market into an a la carte protectionism nightmare mess.
Our Democrat anti-free trade usual suspects - still don’t get it.
Sure it’s driving us - off a cliff. Thank you very much Thelma Vilsack and Louise Brown.
We have to start viewing farm law as what it is - international trade policy, not a domestic gravy goodie bag.
The world’s farm exporter nations need to sit down together, each with a copy of everyone else’s lists of protectionist farm policies. And start horse trading.
“Brazil – how about if you get rid of this subsidy, we’ll each get rid of one.”
“Mexico – if you get rid of this tariff, we’ll each get rid of one.”
Let the subsequent discussions ensue. Lather, rinse, repeat.
The free trade folks and the anti-Farm Bill folks have a lot in common - these days more than ever.
It’s time to start working together - towards our mutual, national betterment.