Bringing back Smoot-Hawley

ShareThis

Here we are, in what could be the start of a serious economic downturn, and what do the top Democratic candidates for president want to do?Among their many economically uninformed, downright stupefying ideas, one is to craft some new multilayered version of the 1930 Smoot-Hawley Tariff Act, or at least that's what it sounds like.That act was anti-trade. It raised tariffs on literally thousands of products, other countries hit back with their own tariffs, international demand for our products declined, imports declined and the Depression got a whole lot worse.Now, of course, what Barack Obama, Hillary Rodham Clinton and John Edwards favor today is not some bill with the names "Smoot" or "Hawley" in it, or some one, single act that would raise tariffs. Rather, they are advocating something much too similar, a combination of hesitations, re-examinations and occasional downright naysaying on trade agreements that would give us a protectionist-inclined, economy-worsening near-reversal of what Democrats once stood for.President Franklin Roosevelt, after all, saw Smoot-Hawley for the evil it was. His administration worked with Congress to gradually pluck the feathers out of this creature, chop it up and bury it. Democratic presidents since then have been active proponents of liberalized trade as a means not only of strengthening America, but of stabilizing and enriching countries in economic distress. Hillary's husband Bill was a dear, good friend of free trade.But listen to today's Democratic candidates talk about our trade agreements, and, if you take them seriously, you shake and quake -- it's all so bad for us, you see, and as Edwards argues, we'd better fix things. This former senator even said in a recent Democratic debate that we should never ever dare finalize a pact with Peru allowing U.S. entree to Peruvian markets -- concerning which point you want to say, huh?The former senator and yodeler of pain and suffering looks around and, espying the decline of the textile industry in South Carolina, says trade is the devil that did it and that special interests are the ones that profit.He makes it sound as if he as president would trample trade if our trading partners didn't agree to give America the better of all deals.A quick review of basic economics would instruct him that trade is something that benefits both parties or neither would ever do it. Democrats once mostly understood that it's the public at large that gains from trade through additional jobs and cheaper products and that it's the narrower interests that want protection. Those interests today are largely unions, to which Edwards is get-on-your-knees-and-kiss-their-feet beholden.It's true that when you shift your economy from where you are least competitive to what you do best, you give up some old ways; you at least temporarily may put some people out of work. Serve only those people, however, and you sacrifice possibilities for hundreds of times as many. You no longer have an endlessly innovative, dynamic, growing, robust economy that profits from trade more than any other country out there, but a stagnant and very, very poor one.Obama sees the sanity of finishing the Peru deal, but attacks Edwards for supporting permanent trade dealings with China. He is taken by the argument that you should not trade with countries that aren't ensuring superb conditions to workers while improving their environment, as if those countries can do any such thing in the absence of the wealth that comes from trade. He is a NAFTA critic, and opposed the Central America Free Trade Agreement. He talks about looking anew at all our trade arrangements if elected president.That last bit is the same pledge made by Hillary Clinton -- let's rethink the whole caboodle, she says, adding that she most certainly has misgivings about NAFTA, which, by the way, was largely Bill Clinton's achievement.She and Obama are pretty much on the same page.There's a widespread expectation that one of these candidates will be elected president -- most likely Clinton or Obama -- and if that should be the case, you have to hope that some night in the White House, the ghost of FDR will visit the new president, persuading him or her that, look, a Smoot-Hawley equivalent will hurt America badly and make a wreck of your one-term tenure.(Jay Ambrose, formerly Washington director of editorial policy for Scripps Howard newspapers and the editor of dailies in El Paso, Texas, and Denver, is a columnist living in Colorado. He can be reached at SpeaktoJay(at)aol.com.)