Hoover: The Myth of Free Trade

As tariffs in the first third of the 20th century were rarely less than 50%, no, it wasn't that significant, though a move in the wrong direction, but leave it to a politician to have it both ways.

I read a book recently which pointed out that the timing of the crash coincided with the election of a congress that would pass the Smoot-Hawley act which had already been proposed. So even if it was actually enacted the following year, it was known in late October that it was going to be passed, and the market reacted.

Don't know how true it is, but it's interesting food for thought.

Savoring Adam's food for thought...

I also read somewhere that during the days of the gold standard, the foreign exchange market, and thus, other capital markets primarily responded to changes in trade flows. This is because speculators were actually able to push a currency to the edges of inflation and deflation by directly its shifting its base (gold) between countries.

So, when a government of the gold standard era arbitrarily changes the level of trade, they impact the capital markets profoundly. Today, the big currency areas able to "stabilize" the capital markets with reserve banking and capital requirements.

People with Doctor of Philosophy degrees should be allowed to use emoticons.

In other words, when minimizing it, he was comparing it to prior law, when maximizing it he was comparing it to no law.

I believe Jude Wanniski writes in The Way the World Works that the stock market crashed the day Hoover announced he would sign the tariff bill.

I like the comment "Bad as our prices are ...", meaning prices are too low. I think that tells a lot about his attitude, where he was trying to take the economy and why his efforts failed. It's one of those places where we wonder what he could have been thinking. But, aren't we doing the same thing when we try to keep home prices up?