From a small northwestern observatory…

Finance and economics generally focused on real estate

Posts Tagged ‘Smoot Hartley Tariff Act

A quiet Sunday

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Tariffs are back in the news.  Do I REALLY have to comment on why this is a bad idea?

First, go read about the Law of Comparative Advantage.  It’s nearly as old as the study of economics itself.  It explains why a society is better off with unfettered trading.  Admittedly, there are micro-dislocations.  A worker who was skilled at making stuff may need to learn to make other stuff.  However, the best and quickest way to kill an economy is to start a trade or tariff war.  The Smoot Hartley Tariff Act of 1930 is universally recognized as deepening the Great Depression.  Anyone who is in favor of tariffs was apparently laying out with a hangover the day they taught that in Econ 101.

Written by johnkilpatrick

June 3, 2018 at 12:42 pm

Posted in Economy, Finance

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A brief word about leadership

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If you ever get the chance to visit a Marine unit in the field, do so at mealtime.  You’ll note that the lowest private gets fed first.  Then the sergeants.  Then the officers.  If the Commandant of the Marine Corps happens to be there, he eats last.  This may sound like a trivial issue, but its usually the trivial stuff that conveys the most important messages.  Full disclosure — I was not a Marine, I hung out briefly in the Navy and the National Guard, but had a brother in law, a nephew, and many good friends who served in the Corps.  If I had to do it over again, I would head to Quantico in a heartbeat.  Second piece of full disclosure — every person who gets elevated to a leadership role at Greenfield gets a copy of David Freedman’s excellent book, Corps Business, the 30 Management Princples of the U.S. Marines.  I cannot recommend it too highly.

Leadership is a sacred thing, on an international scale purchased with lives and national treasure.  Since World War II, the United States has been the essential nation,  exerting leadership directly in the free world and indirectly in the rest of it.  This does not come without an ongoing cost, but by and large Americans have enjoyed a standard of living far superior to that seen anywhere else on the globe.  In the long run, it works that way.  Marine officers eat last in the field, and are the first to jump off the helicopter in the landing zone.  On the other hand, there’s better liquor in the officers club, and Generals get padded chairs.

That said, I was terribly disturbed at the inaugural address, and particularly how it’s been interpreted abroad.  In short, we have gone from a role of leadership to a role of “America First, and everyone else last.”  (History note — google America First and see what you get.)  In the long run, this is an economically suicidal strategy.  (History note — google “protectionism” and “Smoot Hartley Tariff Act” and see what you get.). Now, apparently, we want to be the first ones in line to get fed, and the last ones to jump off the helicopter in the LZ.  Sigh….. we’ll see how this turns out.  Fortunately, the White House has promised us “alternate facts”, so perhaps it won’t seem so bad in the 1984-sequel we seem to be living.

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