Tariffs

[Lumpenproletariat]

Record tariff increase led to record depression.

Indeed there were some who believed that the great depression was a wonderful time because prices of goods were so low . . . But not everyone thought it was such a great time.

And how do we avoid another great depression?

Not by imposing higher tariffs or by driving up the wage level. The period prior to the depression, the 1920s, was a period of high wages and high tariffs, continually increasing.

I didn't say it strongly enough.

A graph in Ravi Batri's The Myth of Free Trade, p. 134, shows the U.S. tariff rates from 1821-1991.

The surge of tariffs from 1921-31 was the greatest upturn in tariffs of all the increases. The next greatest increase was in 1861-65, equally steep, but a much less total increase.

When the downturn began, 1929-30, the initial reaction by industry was to keep wages high and not lay off workers.

And Congress also increased tariffs still higher.

The result that followed was the worst depression ever. So protecting the uncompetitive, boosting their wages, protecting their jobs, etc., led to the exact opposite result from what was intended.