Updated July 9, 2009
Some have postulated that the current period resembles that of the early 1930s in America. It’s difficult to argue.
The Smoot-Hawley tariff act was a very ill-advised measure taken by the Hoover administration that seriously crippled the ailing US economy during the 1930s. It levied tariffs on a large number of imported goods, which touched off reciprocal measures by foreign countries.
In an effort to protect American manufactures, the unintended consequences resulted in the opposite effect intended. The whole move helped slow the US economy.
The Denver Post article, above, dated July 5, notes that there was a protectionist measure added by to HR 2454 at the last moment that could have a similarly damaging effect on trade; tariffs will be levied on items manufactured in countries that do not implement carbon reducing measures.
The Post article points out that HR 2454 presents a trade conundrum for the U.S.
The conundrum is that if there is no protectionist measure implemented, companies will simply stop buying U.S. manufactured goods because they will cost more due to the increased costs – TAXES – levied by Cap & Trade and the costs of complying with the minute details contained within it.
But, if the U.S. implements tariffs, it could set off retaliatory measures by other countries.
In other words, Cap & Trade is bad for business. It doesn’t take a rocket scientist. The Post notes that the bill may not have passed if the tariff provision had not been added and it seems some states pushed for its addition.
I have a wild proposal: Instead of states pushing for trade protection measures being including in a hideous piece of legislation, how about those states protect trade / business in their own states by standing firmly on “HELL NO” to Cap & Trade?
This particular part of the editorial and the idea that states were complicit in the passage of the bill through the House highlights how far afield all levels of government have gotten from common sense, and how important it is that we all put a lot of pressure on our Governors and state legislators to assert the rights noted in the Tenth Amendment.
Beyond highlighting the states issues, the article correctly notes that the bill stands to have little impact on the very “problem” it hopes to solve (carbon emissions) while threatens to seriously cripple our economy.
Updated July 9:
Thanks to Crista Huff, who puts out an excellent email newsletter, a story in the May 24, 2009, Washington Examiner came to my attention. As of that date, the movement of the bill seemed very much in doubt.
The date projected for a potential vote was sometime prior to the August recess.
The reason the bill’s potential was in doubt at the time, according to the story, is that there were a number of Democrats who were not predisposed to