The seeds of the 1930s Great Depression were laid in the US Federal Reserve’s inflationary credit expansion of the twenties, which led inexorably to the Crash of 1929 and thence to the Great Contraction.
The destruction was exacerbated, in the US, by the medding, “stimulus,” and attempts at price-fixing by President Hoover, and then exported worldwide by the infamous Smoot-Hawley Tariff of 1930, which brought down for decades the globalised system of free trade that had operated (for the most part) for over half-a century, and laid the seeds for the decade-long depression that led almost inexorably to world war.
(As Frederic Bastiat used to say, when goods don’t cross borders soldiers will.)
Alas, dear readers, history once again is repeating. Thank goodness that this time at least there are some who oppose the rush to protectionism. For now.
3 comments:
I was interested to read that Paul Douglas was one of those who opposed Smoot Hawley; surprising in view of his constant sponsoring of all manner of left wing nonsense whilst in the US Senate years later.
If President Obama really is the messiah and really wants to solve America's problems he should campaign to abolish all tariffs in the US without delay.
Love this Obama messiah stuff. Religious whack jobs are always up to promoting mumbo-jumbo. At one point the Kraut Lutherans even decided that Hitler was the reincarnation of Jesus. Lucky for them they didn't make too much promotion of that... Pack of cocks.
Did you hear the news? Obama turns poverty into productive wealth while he alks on water.
LGM
Stephanie Flanders from the BBC has another take on the Great Depression:
Protectionism wasn't the problem
An interesting take. It's the Fed what did it.
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