In the 1928 presidential election, soon-to-become-President Herbert Hoover (who had never held an elected office!) promised to help farmers by increasing tariffs on imported agricultural products. After winning, Hoover asked Congress to implement his promise.
Reed Smoot was a Republican from Utah and chairman of the Senate Finance Committee. Willis Hawley, a Republican from Oregon, was chairman of the House Ways and Means Committee. Four months before the 1929 economic crash beginning The Great Depression, in May 1929 with Hawley leading the way the House passed a bill increasing tariffs on both agricultural and industrial goods. With The Great Depression under way, the Senate debated its bill until March 1930 when it adopted its version. A conference committee unified the two versions, largely by raising tariffs to the higher levels in the House bill. The bill was signed by President Herbert Hoover on June 17, 1930.
Some statistics from around that time seem as if they might be related to the Smoot–Hawley Tariff Act:
- In 1929 when Hoover was sworn in and prior to the September market crash, the unemployment rate in the United States was 3.2%.
- In 1930, the first year of The Great Depression the unemployment rate was 8.7%.
- By 1932, the year Hoover, Smoot, and Hawley lost their reelection bids, the unemployment rate was 23.6%.
- In 1933 it reached 24.9%.
President Franklin Delano Roosevelt and the Democratic Congress passed Reciprocal Trade Agreements Act of 1934. But retaliation by other countries and the further growth of nationalism around the world had its continuing impact. U.S. unemployment remained above 15% until WWII when about 16 million Americans began serving in the U.S. military out of about 85 million of working age. With about 20% of the work force in the military, the need to expand war related production resulted in an unemployment rate below 2% in 1943 through 1945.
History does not literally repeat itself, common belief notwithstanding. Trump did not implement his tariffs at the beginning of a depression. But nationalism has a way of ending up in economic disruption and war. It's just difficult to predict what events will occur that will impact the world and how trends will exacerbate or ameliorate the impact of those events.
What we do know Climate Change, more correctly viewed by humans as a global climate crisis, is occurring. As noted in previous posts, agencies of the United States government and the Chinese government have accepted as inevitable a near-maximum catastrophic impact from Climate Change. A May 2018 Chinese study corresponds to July 2018 official projections accepted and published by the Trump Administration.
Of course, almost no living person in the Baby Boom generation (or older) will be alive to experience the full catastrophic impact even in the earliest year of the Chinese models - 2064. And at least half of the Gen X generation will be gone before the Chinese model "most likely" full catastrophic impact year - 2084.
Climate Change is not the only trend with significant potential to exacerbate or ameliorate the impact of future events. As noted in the previous post, "space-based economies" are evolving around the world with varying mixes of private sector and national governments participation.
Donald Trump pushed for, and got, a Space Force in the American military. Of course the Chinese People's Liberation Army has both a rocket force – the strategic and tactical missile operator – and a strategic support force, which is in charge of cyber, space, and electronic warfare. (Fortunately, neither chose to name a military branch Starfleet.)
So what can be the expected result of mixing into all this Trump's nationalist economic agenda? A 21st Century world wide economic collapse? A 21st Century world war? History does not literally repeat itself, so we don't know. Could there be a war in space over the vagaries of space-based economies?
One thing we should know. In a world threatened by a climate crisis resulting from world-wide human behaviors and with nations establishing space warfare military branches in the context of private sector expansion into space, nationalism is even less desirable and more dangerous than it was when Hoover, Smoot, and Hawley pretended they understood what was best for the next decade.
Even the right-wing conservative Washington Examiner noted; "The Trump administration is scheduled to raise tariffs on Chinese imports on Sunday to rates not seen since the notorious Smoot-Hawley tariffs enacted in 1930."
The sad thing is the voting public loved the nationalist pro-tariff rhetoric of Hoover, Smoot, and Hawley in 1929 set in a context of expanding nationalist sentiment world wide. Today the voting public loves the nationalist pro-tariff rhetoric of Trump Republicans set in a context of expanding nationalist sentiment world wide.
History does not literally repeat itself, but....
FOOTNOTES:
- It should be noted that the tariff proposals came at the end of a decade that began with the U.S. Senate's failure to ratify The Treaty of Versailles ending WWI and a reassertion of nativist and inward-looking isolationist policy supported by the rise of The Irreconcilables.
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