I have had a link to an article about the Smoot-Hawley Tariff Act open in a tab for weeks now, planning on saying something clever about it, but you know, the more I dig, the more I realize there's no cleverness to be had. We're now a long lifetime after the thing -- nearly three 30-year generations -- and economists are still arguing over the role, if any, that it played in causing (through the run-up debate), prolonging, or steering the Great Depression and while they've all put forward pet theories, grand notions and entire books of scholaresque bloviation, the takeaway is, "We dunno."
That's a definitive indictment of central planning: If you don't know what the knobs do or how to read the meters, even in hindsight, stop trying to run it!
Economics ought to be an observational art, not a predictive one: descriptive, not prescriptive.
And thus endeth today's lesson.
4 weeks ago