Smoot Hawley Redux

Smoot Hawley Redux

Submitted by Jim Quinn

As the Greater Depression continues along a parallel pathway with the Great Depression of the 1930s, Congress is about to commit the same blunder it made in 1930. The rocket scientists in the House of Representatives in September passed the Currency Reform for Fair Trade Act, which aims to crack down on Chinese currency manipulation by targeting imports from China and other countries with currencies that are perceived to be undervalued.

The vote was 348 to 79, with more than 100 Republicans voting in favor of the bill. It died in the Senate before the mid-term elections, but Representative Sander Levin, Representative Tim Ryan and Representative Tim Murphy are expected to reintroduce the bill when the House returns in February from a congressional district work break. Senators Shumer and Casey are also planning legislation to punish the Chinese for unfair trade practices.

The head rocket scientist, Nancy Pelosi, declared:

“For so many years, we have watched the China-U.S. trade deficit grow and grow and grow. Today, we are finally doing something about it by recognizing that China’s manipulation of the currency represents a subsidy for Chinese exports coming to the United States and elsewhere. We owe that to American workers.â€

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* An immediate increase in the prices of goods from China, which would proportionately hurt the lower and middle classes who shop at Walmart.
* Retaliatory tariffs and protectionist policies by other countries, resulting in a decline in U.S. exports.
* A net loss of U.S. jobs as the decline in consumer spending-related jobs will far outweigh any benefits to exporting businesses.
* A decrease in world trade, resulting in a deepening of the current worldwide depression.
* Possible unintended consequences similar to what happened in Germany after the hyperinflationary collapse of their currency (dictators, war, chaos).

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You free traders have been telling this crap since the Great Depression ignoring the fact that our entire economy is based upon protected trade, and it was protected trade that built the US economy and even protected trade that pulled US out of the Great Depression. The Smoot Hawley rates weren't the problem, while some of the tariffs on a few products were arguably excessive, there was no "trade war", there were adjustments to a situation that was destroying all the nations.

Free traders are globalists at heart. They would prefer to sell their goods overseas than sell them here to Americans. Take farmers who want to grow more corn that we want to eat, so do they grow something else that we want to buy? OH NOES! They export subsidied corn to foreign countries and force US to import the food products we want to buy. Why? So they don't have to change what they've done for 100 years. Because growing corn is safe when it's subsidized by the government. Meanwhile as of 2008 I believe it was, for the first time in US history, our country IMPORTED more food for domestic consumption than we exported.

In fact we imported more of almost everything than we exported. So do the math. We pay the highest prices for goods and services than any other country because we have the highest standard of living. So why are our companies intent upon serving other nations and their people at lower prices than serving our needs?

We must restore protected trade policies starting with passing the FairTax which taxes imports the same as domestic products and services. We don't want to pick on any one country, or blame them in any accusing way. This situation is our fault, our failure of our government to protect our trade and manage imports and exports so that we have trade balances or trade surpluses with every country we trade with. The US needs a $200 billion trade surplus at minimum, not an $800 billion trade deficit as we had in 2008. The deficits are down a little but only because we aren't buying as much.

We must restore protected trade policies and pass the FairTax. There is no choice, no other alternative, no magic hat to pull rabbits from and no divine intervention that's going to save the US economy. We have to take 5 simple steps to fix the US economy:

1. stop illegal immigration and reduce legal immigration
2. pass the FairTax
3. protect our trade
4. legalize/regulate/tax under 2 the illegal drug trade
5. drill baby drill

That's it. Either do it or ride the dive to the bottom of the world and prepare to live like starving dependent peasants answering to the UN and the WTO run and controlled by people who deliberately and meticulously used free trade treason, mandated income taxation, excessive immigration, illegal drug trades and bans on domestic oil production to destroy the United States.