LOOK AT WHAT CAUSED AND DEEPENED THE DEPRESSION AND DO THE OPPOSITE:

Ghosts from the past (Chicago Tribune, January 21, 2009)

The Smoot-Hawley Tariff Act of 1930 raised tariffs on much more than agriculture, sparking a furious round of tit-for-tat protectionist retaliation among our trading partners. The result: world trade dropped by half—and stayed down for the rest of the decade. [...]

As the recession deepens and spreads around the world, protectionism becomes "a huge danger," said Dan Griswold, director of the Cato Institute's Center for Trade Policy Studies.

The Wall Street Journal reported recently that organized labor and the steel and textile industries are "pushing to include strong 'Buy America' provisions" in any economic stimulus package. The same story noted that India had already raised its tariffs on imported steel, Mexico is threatening to bar some U.S. meat imports and Indonesia is forcing importers of clothing, shoes and electronics to buy special licenses.

"Other countries will follow our lead," said Griswold, just as they did in the 1930s. It took years to undo the damage caused by the global trade war sparked by Smoot-Hawley. During the 2008 campaign, President-elect Barack Obama gave mixed signals about his faith in free trade. He needs to be its champion now.

Free flow of goods, free flow of peoples, low interest rates, give government money back to the people instead of spending it on bureaucratic projects, etc.

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Posted by Orrin Judd at January 21, 2009 1:25 PM