Chris Blattman

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Desperate Congresses

in 1930 Congress resorted to Smoot-Hawley out of desperation over its lack of alternatives. It was not that the Congress then, as some suggest might be the case now, resorted to a tariff to maximise the employment-creating impact from expansionary fiscal policies. Rather the tariff was imposed instead of expansionary fiscal policies, there as yet being no understanding of the case for fiscal stimulus.
The danger of a tariff as a convoluted employment-creating policy is now less, precisely because we understand that there are direct ways for the government to stimulate demand, namely by cutting taxes and raising public spending.

That is Berkeley economic historian Barry Eichengreen writing in The Guardian. The whole article is worth a read.

One Response

  1. I think you mean desperate, as in the other posts. Also, I ran a google search for deasperate and this post was the first result, which is cool.

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