Eighty-eight years ago on the third of May, 1,028 economists signed an open letter to Congress to oppose the Smoot-Hawley Tariff Act, explaining that protectionist tariffs are harmful to the U.S. economy. On May 3, 2018, over 1,100 economists (including yours truly) signed an open letter to President Trump and Congress expressing concern about the President’s threatened (and enacted) trade tariffs–using substantially the exact same letter that was sent 88 years before. That is because–and to illustrate that–the basic economic principles have not changed. Protectionist tariffs harm consumers, harm a large majority of producers, and harm the economy overall .
The letter has been covered by a variety of news sites, including:
- Bloomberg: Economists Invoke Great Depression in Warning to Trump on Trade
- The Guardian: More than 1,000 economists warn Trump his trade views echo 1930s errors
- The Street: Will History Repeat Itself? Economists Hope Not
- The Hill: Economists warn Trump, Congress of dangers of protectionist trade policies
- Huffington Post: 1,140 Economists Warn Trump Not To Make Great Depression Mistakes
- Financial Post: Economists warn Trump not to make same mistakes on trade that helped spawn Great Depression
- Business Insider: 1,100 economists warn that Trump is repeating one of the biggest mistakes of the Great Depression
- Reason.com: Hey Trump! The 1930s Called, They Want Their Trade Policy Back.
The Smoot-Hawley Act is generally viewed as having contributed to the severity of the Great Depression, despite Congress’s (misguided) intent. While the modern economic environment is not necessarily in as fragile a state as it may have been in 1930, and the extent of the implications may not be as severe, the current administration’s threats of trade restrictions nonetheless risk a dampening of economic activity and reduced social well-being.
This is the kind of thing that happens when people don’t pay attention to history.
Or even pop culture…