A repository of John's recommended Wall Street Journal articles.
Monday, April 7, 2008
WSJ.com - Smoot-Chavez
Trade legislation debates are usually about dry-as-dust topics like reciprocity and dumping. But sometimes they really matter. Take the Colombia Free Trade Agreement, which the Bush administration will send to Congress this week. If Congress rejects it, the loss wouldn't be just measured in dollors or pesos. It could have profound geopolitical effects that would hurt the U.S.
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There was another period when raw politics was allowed to trump what many in Congress privately admitted was common sense. In the spring of 1930, as the economic downturn set off by the previous year's stock market crash set in, Congress was debating the Smoot-Hawley tariff bill that sought to raise U.S. import barriers to record levels.
Most of the leading economists of the day opposed Smoot-Hawley. A front-page New York Times headline on May 5, 1930, read: "1,028 Economists Ask Hoover to Veto Pending Tariff Bill." But for entirely selfish and shortsighted reasons, both Congress and President Hoover went along with the protectionist hysteria. As a result, the Great Depression was probably deepened and extended for years.
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