Smoot-Hawley Tariff Redux

Cheap credit, and a failing system lead to our own Great Depression in 1929, but often overlooked in history books and documentaries about the era was the devastating Smoot-Hawley Tariff Act of 1930. When the free market was down, we immediately shifted to a protectionist, nationalist, and socialist stance even then! By increasing tariffs on imports, we made products more expensive! Foreign nations followed our lead, further weakening our dollar.

The point is that we cannot shift to a socialist agenda simply when we arrive at a low point in the business cycle. Stop listening to the pundits for a minute, and ask yourself if you're really worse off than you were a decade ago. Has the United States ever experienced a 10 year period of net losses? The answer to both is likely a resounding "no."

Senator Obama plans to tax most small businesses in America. Although $250,000 sounds like a lot of money to individual families, it's not uncommon for a business to earn much more than that, and be on a shoestring budget. Obama's plans to increase the tax burden on those that employ others (i.e., some of the most productive among us) is essentially a Smoot-Hawley II. The question is, can we afford to make the same mistakes we did early on in combating the Great Depression? Sphere: Related Content