On what US President Donald Trump called the “Liberation Day”, the American chief imposed his so-called “reciprocal” policy on dozens of foreign nations.
While making his announcement, Trump also referred to a historic law called the Hawley Tariff Act Smoot of 1930, which, according to him, would have saved the United States from the great depression if it was not eliminated.
De facto verifiers quickly rushed to govern whether the law has increased or depressed the American economy, while social media was quickly flooded with clips in the classic film Day of Ferris Bueller’s leave, Featuring the protagonist in class by learning the act, his professor blaming the act of the President of the United States Herbert Hoover to worsen the great depression.
The history professor of the University of Manitoba, George Buri, does not agree with this assertion, declaring that his effects were quite insignificant.
In the behind the scenes of this famous film scene, Buri reveals that Ben Stein, the actor who played the Buellers professor, was a free market economist and a curator before becoming an actor. During the production of the film, he was in fact invited to give a boring lesson by the director.
A motionless film from 1986 “Ferris Bueller’s Day off”.
Gettyimages
Buri finds it interesting that he gave this conference, because it was a direct reflection of what was preached in the 1980s in the era of Thatcher and Reagan, an era when Keynesian policies and government intervention were considered a thing in the past. Buri thought it was a lack of demand that caused the great depression, not prices.
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“So, as these politicians try to discuss essentially in the 1980s, the correct economic policies they prefer are a return to the open markets, the leave and free trade. They essentially seek to say that the prices are always bad,” he said.
“In the 1980s, there was this new theory according to which what really caused depression was not a leave, so it had to be the Smoot Hawley prices”
The new regulations and capital investments in the administration of Franklin D. Roosevelt of the time bangelled banks and establishing social protection systems, helping to end the Great Depression.
Meanwhile, Hoover prices were considered a failure to improve the economy. Since there was such a low demand in a variety of sectors, the prices which were intended to encourage Americans to buy cheaper domestic products were made unnecessary because the prices were already so low. From 1928 to 1933, a bushel of the price of wheat rose from $ 1.29 to 34 cents.
Although they created difficult conditions in Canada, the wider effects of the great depression were much larger than the Hawley Smoot prices.
Ottawa even tried to fill the gap using reciprocal prices in response, but they finally failed. Buri says that it was the American recovery that helped the integrated natural resources system to inform, while war production in the late 1930s quickly increased the demand for materials and ended the Canada financial crisis.
Even if the prices seemed to play an insignificant role during depression, it was the spark that sparked the chronology of the north nations.
After Great Britain put an end to its preferential exchange with imperial colonies, the top and Lower Canada, as well as Nova Scotia and New Brunswick, began to negotiate with their southern neighbors. However, these relations were complicated when the United States implemented prices in 1866 after Great Britain supported the confederation rich in cotton and sugar in the American civil war.
“This is literally what Canada was born,” said Buri.
“In 1866, America ended reciprocity, and next year in 1867 Upper and Lower Canada, New Brunswick and Nova Scotia decided to form modern Canada according to this new notion of:` `We cannot exchange with Great Britain, we cannot exchange with the United States, so why will we not be exchanged and not forming a greater entity? “” “.
Once the country was formed, Buri highlights that East-West has been fueled by prices implemented by John A. Macdonald, forcing Canadians to exchange above 49th parallel and protect the new nation from American influence.
While free trade was the motivator of economic nationalism at the start, Buri said that the movement reappeared in the 1980s when American companies slipped north, a side effect of the much smaller economy in Canada being so integrated into the financial system of their southern neighbor.
Although the prices have had very different effects for Canadians and Americans, the stories of the two nations are filled with stories related to the prices that illustrate their economic policies and their development. Although Buri disagrees with Trump’s methods behind the prices, the historian includes his justification.
“There is a real problem with the American economy,” he said.
“It is not completely random. It is an attempt to reverse a tendency to several decades of the drop in the American manufacturing economy and America increasingly dependent on Wall Street and the US dollar, which, as we saw in 2008, could be a disaster recipe.”
“I think America is trying to solve certain very real problems with its economy. Whether it will work or not, I don’t know. “
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