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Richard Cochrane is trained in chemistry and metallurgy but is far more interested and practiced as a political and fund raising consultant, writer and amateur historian. He grew up in a Navy family and with his two younger brothers carried on its 500+ year tradition of naval service to Great Britain and the USA then enjoyed a career with one of the largest advertising and public relations agencies working with numerous Fortune 500 companies and many of America's premier educational institutions. He maintains friendships and acquaintanceships around the world. He lives in Santa Barbara, California.

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Protectionism Rears Its Ugly Head Redux

February 1st, 2009 • Richard Cochrane
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As Almost Everyone Who Has Read Anything About the “Great Depression” Knows The Smoot-Hawley Tariff Act Was Disastrous - Here We Go Again.

The Smoot-Hawley Tariff Act (sometimes known as the Hawley-Smoot Tariff Act) was an act signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half. In the opinion of some economists, the Smoot-Hawley Act was a catalyst for the severe reduction in U.S.-European trade from its high in 1929 to its depressed levels of 1932 that accompanied the start of the Great Depression.

Well only a fool would do that again. Enter the fools.

The Obama stimulus bill passed by the House last week contains a provision that would bar foreign steel and iron from the infrastructure projects laid out by the $819 billion economic package. The Senate version, yet to be acted upon, goes further, requiring, with very few exceptions, that all stimulus-funded projects use only American-made equipment and goods. Proponents argue that it is the only way to ensure that the stimulus creates jobs at home and not overseas. Opponents  – included all thoe who have ever red a 9th grade history book – says it amounts to a declaration of war against free trade. That, they say, could spark retaliation from abroad against U.S. companies and exacerbate the global financial crisis.

To paraphrase Pravda (West) — the Washington Post. “Any student of history will tell you that one of the most significant mistakes of the 1930s is when the U.S. embraced protectionism,” Lane said. “It had a cascading effect that ground world trade almost to a halt, and turned a one-year recession into the Great Depression.”

If anything like this is enacted inflation will skyrocket; store shelves will go bare, and the present economic problems will look like a cakewalk.

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