Word: smoot
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Dates: during 1980-1989
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...Known as Smoot-Hawley after its legislative sponsors, the bill promptly fulfilled the worst fears of critics. A new panic seized the already battered stock market; the slide continued for two years. In raising import duties on scores of items, in some cases to 50%, the measure provoked angry retaliation by 25 of the nation's trading partners. U.S. exports fell by nearly two-thirds in just two years...
Willis Hawley of Oregon chaired the House Ways and Means Committee, and Reed Smoot of Utah headed the Senate Finance Committee. Both were fiscal experts with more than 20 years of service on Capitol Hill. But, responding to pressure from organized labor and some sectors of industry, they transformed what was to be an agricultural measure into a comprehensive increase in tariffs...
...from an outright trade war, which would involve a series of trade reprisals by both sides. "Like real wars," says I.M. Destler, a senior fellow at the Institute for International Economics in Washington, "trade wars tend to leave everybody worse off." Two years after Washington passed the virulently protectionist Smoot-Hawley bill in 1930, the wave of trade and currency reprisals that it provoked slashed U.S. exports by 60%, helping deepen the Great Depression. Japan's obsession with maintaining supplies of raw materials for its export industries was largely responsible for the Pacific adventurism that led it into World...
...locks the doors and windows and pulls the shades. Hypochondriac, jittery, paranoid, the economic system settles down to feed upon its own inadequacies. It sits in its slippers by the cold furnace and thinks about how well it used to make things, long ago. It disconsolately guzzles Old Smoot-Hawley, far into the night. Then it passes out. Another economy gone, as defunct as Mayan civilization...
What is wrong with protectionism? Americans for much of their history kept themselves snugly wrapped in protectionist laws. The famous Smoot-Hawley Tariff Act of 1930 set up the highest general tariff rate structure that the U.S. had ever had. One nation after another retaliated. The tariffs helped deepen the Great Depression worldwide and thus at least indirectly brought on World War II. Protectionists say that was an extreme case. No one wants to go back to Smoot-Hawley. Protectionists today want subtler, more modulated laws...