Tariffs

Daniel Gross comes out slamming the GOP for being Protectionist in sentiment, with not all the anti-Trade rhetoric coming from the Democrats. He cites the Bush passage of the Steel tariffs and signing the Farm Bill into law in 2002 as radical anti-Trade. He goes on to equate Reid and Polosi with Smoot and Hawley, who sponsored the Tariff Act of 1930, even linking to a derogatory description of the Smoot-Hawley Tariff Act.

The 1930 Tariffs have gotten a bad reputation in the economic press, but they were not as disadvantageous as presumed. All industrial nations had overfilled Warehouse stock, all these nations did not have Consumers empowered to buy their Product, and Unemployment would have increased with or without the Tariff Act. It prevented the United States from enduring sharp competition in our domestic market, while We were going to be locked out of foreign markets anyway. The Act probably even aided the U.S. economy, by forcing American manufacturers to clear their warehouse through deep Product price cuts, which would have never been as extreme except for the erected barriers to Trade. This clearing of Stock through Price-slashing actually reduced the level of Unemployment in the following Period, and regenerated Business Operating funds.

The real criticism of the current Farm Act, besides the reintroduction of tariffs and subsidies which are foolish, lay in the underlying drive to subsidize giant Agribusiness Corporations. A different approach was needed, making Agribusiness function as a Cost-paying production. Small Farmers should have access to their own Fannie Mae or Freddie Mac, who would hold title to the land until the mortgages on land and equipment were paid; limitation of mortgage extension to Corporate concerns. No Farm Product supports should be allowed, but Farmers Cooperatives should be allowed to mortgage Farm Products with the above loan organizations, so such Cooperatives can act as their own Price-Sustaining Board.

I have always felt more favorable to tariffs than most Economists. Tariffs are a tool, like Monetary policy and Government intervention, with which to stabilize Our domestic market in it’s relations with foreign economies. Most Americans would favor Consumer access to only those Products which are conducive to Pension and Health protection provision. Sweatshop Wage and Salary rates find Americans cold, especially when such Rates are intent on being introduced into the American economy. Americans dislike to believe they are living upon the economic deprivation of Others; understanding innately such lifestyle will eventually attack them personally. lgl