“Making Money” host Charles Payne analyzes the market’s response to evolving tariff news.
For decades, tariff use was seen as a sensible economic move to protect the American entrepreneurship and the market for domestic producers.
They existed when America surpassed Britain in the late 1800s and early 1900s as the world’s outstanding nation and economy.
They were in line between the roaring of their 20s – first by the Emergency Customs Act of 1920 and the Fordney McCumber Act of 1931.
Legendary economist says Trump’s tariffs can revive “devastating history”
So why are they frowning now, especially by conservative economists?
Five Words: Smoot Holi’s Customs Act.
The tariffs applied by Smoot-Hawley have been falsely praised for extending the market meltdown and economic damage caused by the crash in 1929, turning it into a Great Repression.
Yes, it played a role, but not in the now assumed mythical proportions.
Fox Business Host Charles Payne discusses how investors are responding to President Donald Trump’s tariffs on “Kudlow.”
In fact, after a short first spike, US tariff rates steadily fell.
One major issue is that the popularity of tariffs in Congress has shifted from protecting American farmers to protect everything under the sun. That was too wide.
Other issues of the 1930s
The Federal Reserve increased its money supply by 62% from 1921 to 1928, while bank deposits rose 51%, and life insurance companies’ reserves rose to 114%.
The Fed paniced and launched hiking fees to delay all of its cash, causing the stock market crash in 1929.
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They panicked about it and maintained their hiking fees after the crash.
“Kudlow” panelists John Carney and EJ Antoni are discussing tariff diplomacy under the Trump administration.
Worse, President Herbert Hoover increased government spending by 42% from 19230 to 1932 due to a series of programs that include work schemes.
Joining President Franklin Delano Roosevelt. The spending scheme includes two new transactions. They didn’t stop the economy from collapsing further, but they raised the stock market.
Political Fallout
I find it interesting that many people at GOP are talking about tariffs, as if they had a thorough study of history.
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I think the issue they know best about Smoot Holy was not the actual economic damage, but the political fallout.
The law also affected the political careers of the two men behind it. Rep. Willis Holy of Oregon lost his breath, but Utah Reed Smoot was one of the 12 Republican senators who lost their seats in the 1932 election, and his swing to Democrats was equal in 1958 and 1980.
Charles Payne is the host of Fox Business Network (FBN)’s “Make Money with Charles Payne” (Weekdays 2-3pm/ET). He joined Fox News Media as a contributor in 2007 and provides financial analytics on FBN and Fox News Channel.
