1,100 economists warn that Trump is repeating one of the biggest mistakes of the Great Depression

[mfcorey1]

Over 1,100 leading economists sent a letter to President Donald Trump urging the president to reverse course on recent trade tactics — lest the US repeat one of the biggest mistakes of the Great Depression.

The letter, organized by the conservative-leaning National Taxpayers Union, warned that recent tariffs and trade protectionism were harmful to the US economy. The economists cited a 1930 letter that warned Congress against passing the Smoot-Hawley Act, a large package of tariffs that many studies cite as a major reason for the depth of the Great Depression.

"Congress did not take economists’ advice in 1930, and Americans across the country paid the price," the letter says. "The undersigned economists and teachers of economics strongly urge you not to repeat that mistake. Much has changed since 1930 — for example, trade is now significantly more important to our economy — but the fundamental economic principles as explained at the time have not."

The Smoot-Hawley tariffs, much like Trump's measures, were designed as protection for US industries. But they ended up making the situation worse.

Included on the new letter are 14 Nobel laureates and economists from across the political spectrum, including former chairs of the Council of Economic Advisers under Presidents Barack Obama, George W. Bush, and Bill Clinton.

The letter also quotes the warnings from the 1930 letter, which warns that tariffs raise prices on consumers, damage industries that rely on trade director or indirectly, hurt the fortunes of American farmers, and lead to retaliatory measures from other countries.

https://www.msn.com/en-us/money/markets/1100-economists-warn-that-trump-is-repeating-one-of-the-biggest-mistakes-of-the-great-depression/ar-AAwHqOQ?li=BBnb7Kz

[Cha]

1. Well well well.. you know where CONdon and

his doormats are going to file that.

They couldn't care less about the USA or the Planet.

[democratisphere]

2. drumpf is totally unfit to be President and is already wrecking our economy.

[Bernardo de La Paz]

10. Tourism down 4-7%, Chinese stopped buying $13,000,000,000 of soybeans (13 billion $). . . nt

[democratisphere]

14. This is only the beginning of drumpf's massive economic and financial destruction.

redumbliCONs sit silent and do nothing.

[joshdawg]

23. they sit silent and do nothing

because they already have their money in offshore accounts. What do they care about the rest of Americans?
One of republican's mottoes: "I've got mine."

[LiberalArkie]

34. Back in my home town (an old oil town) there was this maid to a very wealthy family.

The family maid a lot of money in oil and stocks and bonds. They lived in a nice 3 story house that sat on a city block.

Now the maid was always worried about her position in life so she put just saved every penny she could and did not follow her employers advice to invest her earnings. The family she took care of were not really nice people, just your typical South Arkansas oil people.

The time came in the 1930's when the stock market crashed, oil prices dropped through the floor.

The family could not afford the taxes on their home, after a few years and it was put up for sale at a tax auction. The maid bought it and let the family stay there, For a good amount of rent.


A lot of property changed hands back in those days.

[Yonnie3]

3. I'm sure Spanky 'Rump will read and heed.

If he could only read.

[N_E_1 for Tennis]

4. This means...

He will have to read the letter or have it read to him and then understand the meaning of the letter or have someone explain it to him before his mind wanders off then admit he made a mistake.

[angrychair]

32. Before his mind wanders...

And he leaves for FL to go play golf for 3 days straight

[raging moderate]

5. It's not a mistake. It's a crime.

They are doing it on purpose. Probably they always were doing it on purpose. To teach the spoiled peasants a "lesson."

[SWBTATTReg]

6. History repeats itself...and guess who's doing it?

The very pro-business Gophers and RUMP. Can't look beyond the tax savings pouring into their wallets on behalf of all of the raped American taxpayer with a bonus to boot...when all of the tariffs, all of the trade protection measures being put in place will do a double whammy on the American taxpayer and the economy that Obama left us in great shape...

[Achilleaze]

7. the republican family-values role model* thinks he's an economic genius

But history shows that arrogant, ignorant republicans always crash the economy and then try to blame others. sad.

* aka republican Draft-Dodger-in-Chief

[rock]

8. One of Hillary's most admirable traits

Was her approach to large-scale changes (for which she was generally criticized): make your changes incrementally - do NOT make huge changes all at once! Trump OTOH is an all or nothing kind of idiot.

[Demsrule86]

9. I disagree with that...Smoot Hawley was passed in 1930 by the Republicans and it has long

been used as an excuse for 'free' trade...unfair trade. It had no effect on the depression which was caused as we 2008 by a gambling overextended Wall Street...Before the modernization act , we had bucket laws, Glass Steagall among other safeguards to prevent another depression. Before such safeguards, there were panics every 8-10 years...they were called 'panics'. The word depression was coined so as not cause 'panic'. The idea that tariffs caused the depression is a GOP myth.

[Bernardo de La Paz]

12. It definitely had a giant effect on the Depression.

It did not create the Depression. It turned a market crash into a long term (3 year) decline and what might have been a harsh recession into a very deep and prolonged depression. It also affected trade world-wide and the collapse of trade worsened depressions in other countries.

A depression is not a panic and panics do not cause depressions. Panics are symptoms, they are the market crashes and the bank runs.

Germany only pulled out of its Depression earlier than the US because of imposition of fascistic socialism and heavy re-militarization. We do not want fascism or militarization here.

[PatrickforO]

33. We don't, but I fear there are some in this country who do, and they hold a lot of

power.

[TheBlackAdder]

17. Yep. One of the primary causes was only 10% required to place stocks, most was deferred on credit.

Everybody went wild in speculations because they all thought they would be millionaires. They overextended their stock buys because they only needed to put 10% down, and float the other 90% for a short while. Massive short-term stock purchasing occurred, as people were trying to flip their profits. This drive fueled massive gambling addition. When the market went to shit, there was no money to back any of those stock trades up with, and the house of cards went collapsing.

[Bernardo de La Paz]

18. The term "depression" had been in use for DECADES before 1929-39

The term "depression" to refer to an economic downturn dates to the 19th century, when it was used by varied Americans and British politicians and economists. Indeed, the first major American economic crisis, the Panic of 1819, was described by then-president James Monroe as "a depression",[174] and the most recent economic crisis, the Depression of 1920–21, had been referred to as a "depression" by then-president Calvin Coolidge.

Financial crises were traditionally referred to as "panics", most recently the major Panic of 1907, and the minor Panic of 1910–11, though the 1929 crisis was called "The Crash", and the term "panic" has since fallen out of use. At the time of the Great Depression, the term "The Great Depression" was already used to refer to the period 1873–96 (in the United Kingdom), or more narrowly 1873–79 (in the United States), which has retroactively been renamed the Long Depression.[176] -- Wikipedia

[Demsrule86]

37. They used to be called panics...for years.

We are both kind of right...

"Today the term "depression" is most often associated with the Great Depression of the 1930s, but the term had been in use long before then. Indeed, an early major American economic crisis, the Panic of 1819, was described by then-president James Monroe as "a depression",[6] and the economic crisis immediately preceding the 1930s depression, the Depression of 1920–21, was referred to as a "depression" by president Calvin Coolidge.

However, in the 19th and early 20th centuries, financial crises were traditionally referred to as "panics", e.g., the 'major' Panic of 1907, and the 'minor' Panic of 1910–1911, though the 1929 crisis was more commonly called "The Crash", and the term "panic" has since fallen out of use. At the time of the Great Depression (of the 1930s), the phrase "The Great Depression" had already been used to refer to the period 1873–96 (in the United Kingdom), or more narrowly 1873–79 (in the United States), which has since been renamed the Long Depression.

Common use of the phrase "The Great Depression" for the 1930s crisis is most frequently attributed to British economist Lionel Robbins, whose 1934 book The Great Depression is credited with 'formalizing' the phrase,[6] though US president Herbert Hoover is widely credited with having 'popularized' the term/phrase,[6][7] informally referring to the downturn as a "depression", with such uses as "Economic depression cannot be cured by legislative action or executive pronouncement", (December 1930, Message to Congress) and "I need not recount to you that the world is passing through a great depression" (1931)."

[Bernardo de La Paz]

40. That's what I quoted. But you said the word was invented for Great Depression as Republicon dodge.

It was not.

The quote I gave was from the article on the Great Depression on Wikipedia, which I attributed.

Your quote, which you did not attribute, was taken from the Depression article on Wikipedia. https://en.wikipedia.org/wiki/Depression_%28economics%29%23Terminology

They say the same thing.

[Demsrule86]

41. The point was that they were mostly called panics and had been use rarely before the

Great depression...sorry for the inaccuracy...I think we are on the same page...a rose by any other name...

[IronLionZion]

24. The Great Depression was so much more than the stock market

and was global in nature. There was famine and starvation killing millions in some countries during that time.

[DownriverDem]

30. Look back

Every time we have had an economic downfall it was because of the repubs. They make cuts and create deficits that gets them kicked out of office. Then it is up to the Dems to do the dirty work moving towards a balanced budget. If you are 49 or younger the repubs are coming after your Social Security. They want to make cuts and hike up the full retirement age to 70. Let your rightie friends know.

[Demsrule86]

36. It was the stock market that began the great depression...buying on margin particularly.

People who like free trade always want to make it about the trade bill but it wasn't...just like in 08. And the next one will be the same as well...we will see what used to be called 'panics' ever 10 years or so since we have lost Roosevelt's policies to prevent this.

[IronLionZion]

39. I've spent much of my career at 2 agencies FDR created during the depression

and you are grossly oversimplifying the issue. There was a lot going on at that time with deflation of commodity prices, agricultural policies and practices, disruption of trade, very low confidence and consumption among middle and lower income people, and big mistakes from government and central banks that made it worse.

If it were easy, there would be policies in place to prevent such a thing from happening and the recovery would be much faster. If it were easy, economists would agree on why it happened. They don't.

[Demsrule86]

42. No question...you have a point...but the direct cause for the stock market crash that led to the

Great depression was buying on margin...no doubt commodity was involved...then as banks had failed there were multiple runs on banks who did not have the cash to cover the accounts as they too were invested...like dominos.

[mahatmakanejeeves]

11. Swamp-dwelling elitists. Who cares? /s NT

[dalton99a]

13. The more damage, the better

It's his purpose in life

[Bernardo de La Paz]

20. A recession or depression would gladden the heart of puppet-master Putin. . . . nt

[FakeNoose]

26. I'm not so sure about that

Putin would be affected by depression just as the rest of us would.
It would definitely hurt his oil business, that's for sure.

[McCamy Taylor]

15. But Trump bragged about his real estate coups after the 2008

Depression, meaning that if he is doing it now, it is not a "mistake" it is deliberate.

[Bernardo de La Paz]

19. 2007 did not start a Depression. It was a Great Recession.

The Great Recession was a period of general economic decline observed in world markets during the late 2000s and early 2010s. The scale and timing of the recession varied from country to country.[1][2] In terms of overall impact, the International Monetary Fund concluded that it was the worst global recession since the 1930s (the Great Depression).[3][4] The causes of the recession largely originated in the United States, particularly related to the real-estate market, though choices made by other nations contributed as well. According to the U.S. National Bureau of Economic Research (the official arbiter of U.S. recessions) the recession, as experienced in that country, began in December 2007 and ended in June 2009, thus extending over 19 months.[5] The Great Recession was related to the financial crisis of 2007–08 and U.S. subprime mortgage crisis of 2007–09. The Great Recession resulted in the scarcity of valuable assets in the market economy and the collapse of the financial sector (banks) in the world economy. The banks were then bailed out by the U.S. government.[6][7]

The recession was not felt evenly around the world. Whereas most of the world's developed economies, particularly in North America and Europe, fell into a definitive recession, many of the newer developed economies suffered far less impact, particularly China and India whose economies grew substantially during this period.

Terminology

Two senses of the word "[recession]" exist: a less precise sense, referring broadly to "a period of reduced economic activity";[8] and the academic sense used most often in economics, which is defined operationally, referring specifically to the contraction phase of a business cycle, with two or more consecutive quarters of GDP contraction. Under the academic definition, the recession ended in the United States in June or July 2009.[9][10] In the broader, lay sense of the word however, many people use the term to refer to ongoing hardship (in the same way that the term "Great Depression" is also popularly used).[11][12][13][14][15][16] -- https://en.wikipedia.org/wiki/Great_Recession

[Doodley]

16. But Trump is getting credit for the economy. I do not see a strong opposition.

[Bernardo de La Paz]

21. Opposition is up to us, the persistent resisters. Have to get the word out. Talk it up.

The stock market can't get up off the floor. It's pulling nails out of the floor boards and peering into the basement.

Chart of last 6 months:

http://stockcharts.com/h-sc/ui?s=%24SPX

[spike jones]

22. Party like its 1928

The Republicans control the House, the Senate, Maj. of Governors, Supreme court picks, and the Presidency. This has not happened since 1928.

[mfcorey1]

27. And it is so sad for the people of the United States that it is happening now!

[MrScorpio]

25. We've just had another favorable job report come out today (Thanks, President Obama!)

Of course, Trump won't listen to the economists... He thinks that he knows more than they do.

[LongTomH]

29. You know, I really doubt those official low unemployment numbers!

I'll admit most of my evidence is anecdotal -- conversations with friends who are having trouble finding jobs and the increase in panhandlers here in Kansas City. I see people with signs saying 'unemployed' or 'homeless' at most intersections.

[DemocratSinceBirth]

28. This will only ensure he imposes tariffs.

[Martin Eden]

31. Demagoguery Trumps Reality

False narratives to manipulate his base are the key to his support, so economic advice from experts will not change that.

[Yo_Mama_Been_Loggin]

35. No one fucks up the economy as well as me - Donald J Trump

[Mc Mike]

38. Repugs always love a good Depression.

They suck up more property, money, and power, and grind the masses down under their boots.

[Hassler]

43. What do 1000 economists know? Chump-in-Charge is a stable genius.

[mfcorey1]

44. Chump in charge is an illiterate fool!