Smoot-Hawley here we come.Go read the whole post the get the full sad story.
Willis Hawley and Reed Smoot, you may recall, sponsored the Tariff Act of 1930 that raised tariffs to record levels on more than 20,000 imported goods. The duo said this would protect American jobs and revive the economy. It did the reverse, plunging the nation into an even deeper depression. Other nations retaliated. Global trade plummeted. Americans got poorer, as did millions of others around the world.
Why do I think we’re on the way back to Smoot-Hawley? Because with Republicans and blue-dog deficit hawks gaining ground after November 2, the chance of boosting the economy with an “infrastructure bank,” another big spending package, or even a big round of middle-class tax cuts is roughly nil. This means a lousy economy — possibly for years.
And that leaves trade as a sitting duck.
High unemployment turns the public against trade. In a recent Wall Street Journal/NBC News poll, more than half of those surveyed (53%) said free trade hurts America. That’s up from 46% in 2007, and just 32% in 1999.
Traditional big-business Republicans support trade. But the tea partiers who are taking over the GOP don’t. An astonishing 61 percent of people who describe themselves as “Tea Party sympathizers” say trade is bad for America. That’s close to the 65 percent of union families who are against trade.
Think about it. The ground troops for both parties – tea party Republicans and union Democrats – believe free trade is bad.
Hopefully the few long voices in the wilderness can alert the broader public to the errors of their ways and the American public can pull their politicians back from the brink before they turn the Great Recession into a Great Depression 2.0.
As Reich point out, what needs to be fixed is not global trade, but the rapaciousness of the ultra-rich in America:
Globalization is part of reason the median wage of male workers hasn’t risen in three decades, adjusted for inflation. Starting in the late 1970s, technologies like cargo ships, containers, and satellite communications, followed by computers and the Internet, enabled companies to efficiently parcel out work around the world wherever it could be done most cheaply. The result has been to undermine unions and destroy many good-paying routine jobs in America.It takes some effort to pay attention to the world around you and understand how it works. Sadly, too many people would rather treat news and information as "entertainment" so they end up with wildly distorted views about many things. This was the problem of the inter-war period in Europe that led to the rise of fanatical fascist and Nazi parties. People wanted simple, feel-good solutions and could be bothered with facts and didn't understand how their decisions in the ballot box would come back to bite them big time with 73 million dead, many more injured, and continents ravaged with bombed-out cities and destroyed industries. After the war famine would have killed millions and millions more if America had not stepped in with aid on a vast scale. Why would the American people sleep walk down this same path?
Meanwhile, the biggest benefits have gone to the top – to executives of U.S. global corporations, Wall Street financiers, big-name entertainers, and the most successful digital entrepreneurs. All have been sufficiently educated and well-connected, or lucky enough, to find a huge and growing global market for what they sell.
The consequence has been a degree of inequality not seen in this country since the late 1920s.
The winners from globalization have gained so much that they could have fully compensated the losers and still come out ahead. They could have financed better schools and free higher education for most Americans, along with wage subsidies that brought almost everyone up to a higher standard of living.
But they didn’t. Instead, they fought to keep their tax shelters, loopholes, and lower marginal rates, and they fought against more outlays for public investments and social safety nets. Wall Street got bailed out but Main Street got zilch.
For more on the death and destruction, look at Wikipedia.
For more on Smoot-Hawley, look at Wikipedia.