7-Oct-10 News -- Mideast peace talk decision postponed

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7-Oct-10 News -- Mideast peace talk decision postponed

Post by John »

7-Oct-10 News -- Mideast peace talk decision postponed until Friday

Protectionism growing around the world

** 7-Oct-10 News -- Mideast peace talk decision postponed until Friday
** http://www.generationaldynamics.com/cgi ... 07#e101007

"Mideast peace talk decision postponed until Friday"
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Protectionism growing around the world
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Re: 7-Oct-10 News -- Mideast peace talk decision postponed

Post by OLD1953 »

Couple of thoughts here.

One is that perhaps we should be looking at prices relative to the total money supply. IOW, should we look at price inflation/deflation relative to the money supply or as a stand alone item? Of course, that gets us into the whole "what is the money supply" arguement. The market basket approach is very badly flawed, and looking at prices without taking anything into account is flawed as well.

I've always had trouble with the folks that give Smoot Hawley as a cause rather than an effect. And the deflation that took place during that period plus the serious risk aversion/avoidance of luxury that also took place had a lot more to do with the collapse of the silk trade than a tax which never went to 20% - it maxed out just below that, and more than half of imports were not taxed. People said silk was too expensive, true enough, but would a 20% price reduction have made that much difference? If I think something is too expensive, then a 20% reduction just means it's not quite as "too expensive", in other words, it's not a necessity.

Ran across the two sentences below on Wikipedia, and it was so good I thought I'd post it.
According to the U.S. Statistical Abstract, the effective tariff rate was 13.5% in 1929 and 19.8% in 1933 with 63% of all imports being duty-free. From 1821-1900, the U.S. averaged 29.7% effective tariff rates and peaked in 1830 at 57.3% with only 8% of all imports being duty-free, dwarfing the Smoot-Hawley rate. In addition, imports during 1929 were only 4.2% of the United States' GNP and exports were only 5.0%.

I've no problem with the idea that "beggar thy money" will replace the tariff acts of the 30's, but they are an effect, not a cause, IMHO.

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