cross-posted from: https://lemmit.online/post/5566633
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The original was posted on /r/todayilearned by /u/MechCADdie on 2025-04-04 08:19:11+00:00.
Someone has either never seen “Ferris Buller’s Day Off,” can’t remember it very well, or didn’t pay attention. This was covered in class!
In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the… Anyone? Anyone?.. the Great Depression, passed the… Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?.. raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. Voodoo economics.
I watched this movie 3-4 times and even when reading this, I’m still spaced out.
Ben Stein just has a voice that makes me tune him out.
Such a great voice for comedy. Shame he’s anti-abortion, pretty racist, pro-Regan and Trump, weirdly against evolution… So many awful perspectives.
weirdly against evolution
You can see his point. Look where it got us, we should have stayed in the sea.
Yeah, can we vote for some intelligent design please. The old regime isn’t working out.
What’s interesting is that this boring speech isn’t just an actor reading something boring. Stein is a second-generation economist. He has a BA in economics from Columbia University. His father had a PhD in economics and chaired the Council of Economic Advisors under Richard Nixon and Gerald Ford.
His father was apparently well respected by both parties, but the son has gone full MAGA, which is unfortunate.
Planet Money interviewed the professor who wrote the book from which Ben Stein is reading in that scene.
It is an older episode they re-air periodically. I think this one:
https://www.npr.org/2024/12/11/1218506684/worst-tariffs-ever-update
I know it from the Newsroom
Proof yet again that “business leaders” typically don’t know shit about shit.
It is all 1000% on purpose.
They intend to ride it out and profit from all of this, and we’ll let them due to cowardice and division.
They LOVE massive depressions. They buy up real estate and failing companies cheap with their massive cash reserves.
This guy is no business leader- he bankrupt his own casinos multiple times and just stiffs people on payment. He’s a grifter who happened to be born into money
The so called geniuses of business have a better batting average than the average person but they are still prone to the same fuck ups and emotionally driven foolishness as anyone else. I was reading about the Theranos scam and how many supposed brilliant corporate leaders all threw big money at it without taking the time to investigate it first.
If you have Hulu or sail the seven seas, check out “The Dropout” which is a mini-series about Theranos and Elizabeth Holmes.
I had never heard of it before but I now just finished watching it after reading your recommendation and it was really great, thank you!
You’re welcome. Glad you enjoyed it.
There is some nuance here. Smoot-Hawley didn’t cause the great depression, and there a lot of economists who say it didn’t have that much of an effect at all.
Tarriffs can have some useful effects when used for protectionism, diplomatic coercion, or trade barrier reduction coercion. However, Trump’s tariffs are way dumber than anything that came before, because he’s trying to do all three of these at once. All of these have conflicting effects on each other, and it is literally impossible to design a tariff strategy that can accomplish all three, since raising a tariff for one purpose means that you need to lower tariffs for other purposes. All he’s doing by raising across the board is causing instability in the economy and convincing all partners to ditch the US.
All he’s doing is exactly what Putin wants. Systematically isolating and weakening America while weakening the West at large and any other competing countries to his power and new accumulation of wealth.
This is what is funny for me. I would like tariffs to discourage trade with countries that have less democracy, rights for its citizens, and high income disparity (which unfortunately we are not a paragon of currently) and encourage trade with countries that are the reverse of that.
No one thing triggered it but the tarifs contributed almost as much as the out of control stock market. All the controls put in place to prevent this have been changed. So stupid tarifs(Are there any other kind) and a unregulated market system has us primed for some serious times.
So stupid tarifs(Are there any other kind)
There are some that work in order to protect national interests, mainly local producers and services. Whether they are stupid or not depends on implementation and end results
But these local companies just jack up their price to be competitive to the new tariffed foreign price and pocket the money.
Dunno, what usually happens without tariffs is that the bigger multinational companies drive the prices so low as to destroy local competition, after that they jack up the prices
There is good economic theory that Smoot Hawley actually was responsible for the initial bank failures that led to the Great Depression.
https://www.youtube.com/watch?v=JOvWS_xzRbc
Can skip to about 15 minutes into if ya want.
Tarriffs can have some useful effects
Europe has a some tariffs on Chinese EV brands. The reason is that they get subsidized by their government and can easily dump them on our markets, ruining our own industries. The tariff calculation is based on what we think those subsidies are and how to make it fair compared to our prices.
Fun fact! - this is what Ben Stein is teaching in Ferris Bueller’s day off.
Anyone? Anyone?
The Great Depression.
And then the conservative brain worms convinced him to support the people who did it again.
I heard he became a MAGA though. How ironic.
Not really ironic. The dude was part of Nixons administration. Trump is basically Nixon 2.0. Trumps whole worldview was shaped by Nixon or guys who worked for Nixon.
Surprisingly, he was actually a terrible person BEFORE MAGA.
You are not wrong…
Maybe they should have been more attentive than send all the time preparing an extremely elaborate day of playing hokey.
Every day of my life is an economic crisis.
Is this implying if you with paycheck to paycheck it doesn’t affect you? People playing with the stock market can afford to lose. This isn’t going to hurt them nearly as much as those who can’t afford to lose
No, it’s not saying people living paycheck-to-paycheck won’t be affected. I think the point is - scary threat isn’t scary, because such people already feel the constant threat of poverty every day. Being regularly pumped full of cortisol over worries of simply surviving, there are no fucks left to give when additional threats are piled on.
Tariff is a consumption tax. The poorest spends most of their income on consumption like groceries, clothing, car parts, etc. The price of all of that is going up.
Next stockmarket wipeout reduces wealth of middle class the most, who in turn reduces spending on services that employee working class people.
Poorest always gets hit the hardest in any negative economic event because they are poor.
Yep. I know. I think a lot of us know. It doesn’t make my burnt-out, cortisol-drenched brain any more capable of reacting.
Just add it to the pile of my stressors over there. I think there’s some space between “potential homelessness” and “loss of medical coverage,” but you might have to squeeze it in there.
When I was struggling in college to eat and people talked about the market collapsing – pal, I was trying not to be homeless. I had a thousand other problems, from bad health issues, uncertainty over if I would sleep in a bed, where my next meal.
Its a awful take to rip into them for not caring that the Dow Jones lost 2000 points or whatever.
I’m warning that there is a domino effect of the markets failing that could have left you homeless in that exact situation. It’s literally what you’re describing. This will push people from balancing in the edge to falling over it. Markets collapsing means jobs loses and hardships for the working class as well. So yes everyone should care and be as prepared as possible when we enter a recession. Pretending this isn’t going to effect people working paycheck to paycheck is only going to help leave people unprepared when the ripple effects them. It’s not awful to warn people of a disaster and I resent the accusation
To me it looks like it sides with the paycheck-to-paycheck people. But you’re getting a lot of upvotes so either I’m looking at it wrong or a lot of people are wearing the same anger glasses as you.
The reason that the stock market cratered in response to this was that regular consumers are about to get hit with a 25%+ price increase on literally everything they buy. If you don’t make 25% more paycheck, you’re going to be cutting your lifestyle by the difference. Companies know this and are anticipating major lost revenue because people won’t have money to spend on their products. The price increases are probably going to be in full swing in 2-3 months, but that’s an educated guess, only.
thanks, I know all that. Back to the cartoon, it looks to me like it’s acknowledging the situation of Everyman in the persona of SpongeBob. So the answer to, “Is this implying if you with paycheck to paycheck it doesn’t affect you?” would be no, it does not imply that. It’s saying people are already up to their necks in shit and oh well, this’ll make things worse but it’s just another log on the fire.
An even bigger factor to the stock market is that the largest companies get 50%-60% of their revenue from other countries. They are about to get shit kicked.
It looks like it has that intention without actually thinking about it
I take it more as they’re life is already in crisis mode. The stock market crashing might affect their life indirectly, but it’s just another turd on the pile.
Right now we’re struggling to be able to pay for groceries tomorrow, after paying rent to a place that hates my family.
If the stock market crashes, what’s the real difference between my shit life with my family, and the shit life with my family if the stock market goes down? I’ll have 0.0001% less chance to become a billionaire?
The largest Senate loss in history yet
Those that don’t know history are destined to have a nice day.
The thing about Smoot-Hawley is that when it happened everyone else also put up equal tariffs among one another.
this time the EU, Japan, South Korea, Canada are only putting tariffs on the US. Not amongst themselves.
Great depression, and 2/3rds drop in global trade resulted.
I present also 1828 dementia https://en.wikipedia.org/wiki/Tariff_of_Abominations which started southern secessionist movements.
Unjustifiable trade attacks like all wars are bad for unity. If California or Texas has to pay $10k more per car so metal and auto workers elsewhere get high pay, national unity fractures. Everything being super expensive with no jobs because of global trade retaliations, means that Mexicans stop being a unifying problem, and those white Michigan and Pennsylvania blue collar workers cheering for Trump are the problem. Better cars elsewhere in the world become a bigger national unity factor the more protection $ is spent on inferior cars.
… Ford begins furiously colaborating with Lada.
Well they had elections afterwards. Trump’s nazis will just throw dissenters into KZs and invade their neighbours.
There will be no free elections anymore
Those who do not learn history are doomed to repeat it.
I have a feeling they learned, and then said “what a great idea to crash the economy. It’s so easy, let’s do it.”
hey asshole, trade wars are good, and easy to win!
i swear to god you can get in line behind our eternally healthy, young, sexy god-king or you can get ooooout
Thats supposed to be cautionary, but to the MAGA Nazis, its a Game Plan.
Yes but only the racist parts. They don’t want to repeat the great depression, but are going to because they didn’t actually learn about history.
It’s almost always conservatives caused
Smoot-Hawley 2: Electric Boogaloo
Not the second time but some are saying this one is similar to two others including smoot-hawley that triggered a huge economic downturn.
https://en.wikipedia.org/wiki/Tariff_of_Abominations
https://en.wikipedia.org/wiki/List_of_tariff_laws_in_the_United_States
Tarrifs are billionaire cash grabs, nothing more. Nobody likes those. Except billionaires of course.
Even the billionaires are going to lose money. It’s just unjustifiably stupid.
They have enough money to coast along to buy and hoard failing companies and collect them for whenever the economy rebounds.
Billionaires have so much money, they could spend a few thousand a day and it wouldn’t hurt their bank account for decades.
They could spend $100,000 a day for 50 years an not have spent through 2 Billion. Elon and musk both command 200 Billion ish. the interest alone is worth that 8 billion a year if it was in treasuries.
Every year the interest on Musks fortune could generate enough money to spend $2,100,000 a day without even losing a dollar of principle. on the theoretical interest of his fortune.
I lost 10% of my retirement today. Thats not even a fraction of any of these numbers 😂😭
The old oil money declared war on the neuvo riche tech bros.
Its an attrition war.
The majority are peeons (sic) in this new feudal trickle down economic game.
Every once-in-a-lifetime economic disaster I’ve personally witnessed has taught me that any economic loss for billionaires is only temporary.
Let them lose enough to put them on the street with the rest of us. Hopefully it can humble them enough to understand that wealth should not be hoarded but shared for the greater good of society
Some, but it does work nicely as a regressive tax to offset their tax cuts. It’s really hard to see who’s winning in the race to destroy the global economy, someone has to right?
Yeah, look past the self-righteous grandstanding to see it for the big wealth transfer that it is.
Tarrifs are billionaire cash grabs
Not really. It is possible that Musk envisioned breaking NA auto pact to USMCA agreements on autos for purposes of destroying big 3 auto competition, which has been releasing competitive EVs prior to this aggression. Most billionaires like the status quo with existing protections of their business.
A depression does permit billionaires to swoop in later to buy assets. Complete chaos, uncertainty, and yo yo policies does allow for people to make huge short term leveraged returns if they know when the chaos is to be reversed and applied.
In this case, its just a cult leader doing stupid cult actions, though chaos profit angle can easily be there.
They also didn’t have fox news at that time :/
They had newspapers owned by William Randolph Hearst, who pretty much invented the “yellow press”. And whose story is eerily similar to Musk’s, including a sudden swing from progressivism to far right nationalism.
Even Fox viewers can’t hide from their credit card balance. At least I hope that’s the case.
trump won’t for much longer…
Being ruled by billionaires works both ways I guess lol one can only hope.
If we don’t get these paid actors out of Congress we’re going to lose in ways most people really don’t want to believe
A hero of the right, Ronald Reagan, actually gave a speech condemning tariffs. Yup, I’m actually on Reagan’s side here.
I think there’s room for reasonable tariff policy, but unfortunately the US is a nuance-free land full of extremists so Trump’s terrible implementation will make tariffs radioactive for another generation if there’s a large public backlash.
It doesn’t need to be absolutely free trade with slavers or tariff man hell. We could raise the standard of living by allowing free trade but imposing tariffs – or even outright bans on imports – from places legalizing slave labor and other close to slave labor conditions. But obviously none of that fits into Trump’s dumbass worldview.
Tariffs in my opinion can be a way to protect a given national industry against price dumping, especially when subsidies are involved, or if you have a specific capability in mind that you want to build nationally, but then I think subsidies are a better way, maybe in combination. But putting blanket tariffs against countries is in most cases not the best idea
Yep 100% agree.
Both “free trade” and big stupid blanket tariffs are extremist positions and it’s America so they’re the only positions discussed.
Reagan was a neoconservative, heavily invested in deindustrializing the Midwest to break the domestic labor movement and capturing labor overseas for the benefit of investment capital. He succeeded too well, as his NAFTA and global trade policies birth to large foreign industrial powers that could meet the US as peers instead of supplicants.
Forty years later, Trump looked at the economic landscape and concluded he could undo the Reagan Era by throwing up high trade barriers, because he believed the finance capitalism at home (combined with our large international military) commanded leverage over physical capital abroad. Now we’re gambling on a war over Greenland and a promise that Europe needs Wall Street more than it needs Chinese manufacturing capacity.
But both Reagan and Trump were fixated on global US hegemony. They just went about it wrong, because they were dumb-dumbs surrounded by people more greedy than they were strategic. It’s a double-own goal, from opposite ends of the net.
