When President Hoover Raised Tariffs

An affluent multi-national tycoon is elected to the US presidency.  The anemic economy is unabatedly trajecting downward. He snaps into action enacting a populist economic package in the hopes of coming to the rescue of the everyday working man. Ignoring the advice the egg-headed pundits, he races out to increase tariffs against the foreign traders guilty of rigging the system. 

The president, mugged by reality, is later left devastated when economic miracle he so desperately banked on never materializes. The economic malaise only exacerbates. 

The President was Herbert Hoover. President Hoover was a self-made pull-yourself-up-by-the-bootstraps millionaire. Both his parents tragically died orphaning Hoover at a very young age. Undeterred by life’s anguishing heartbreaks, he went on to graduate from the prestigious Stanford University in engineering and made his millions building a global mining empire. 

While in the Oval Office, the stock market crashed in October 1929, and the Great Depression set it.  Unemployed skyrocketed upwards to unprecedented heights. This is where Hoover gets horrendously inaccurate reputation as doing nothing. Ever heard of the Hoover Damn? President Hoover was pumping out shovel ready infrastructure stimulus projects long before Barrack Obama or Donald J Trump were even a twinkle in their fathers’ eye. 

One of the most Hoover’s most notorious pieces of legislation was the import duty raising Smoot-Hawley Tariff Act. Over a thousand economists penned a letter pleading the President to veto the bill.  Hoover initially spoke scathingly of the Smoot-Hawley calling it "vicious, extortionate, and obnoxious" fearing the damage it would wrought on the nation’s foreign relations. He subsequently caved under the political pressure, and it became law. 

The President’s initial instincts were right.  Even stalwart World War I allies lashed out at the “vicious” and “obnoxious” tariffs with retaliatory export duties of their own. Italy doubled their tariffs on American cars causing US manufactured automobile sales to plummet 90% there. France practically slammed the door on American products. Spain’s mammoth tariff increases as well essentially shut out American goods.

The incensed global community overwhelmingly rejected American exports. American exports dived 61% and imports by 66%. The suffering hit home when US GNP collapsed going down from $103.1 billion in 1929 to $75.8 billion in 1931. Nor was the everyday working man Hoover had so faithfully championed spared. The unemployment rate shot up from 8% in 1930 to 16% in 1931 until finally topping off at 25% between 1932-1933.

Smoot-Hawley set off fuse under the global economy igniting an international trade war of tit-for-tat anti-trade legislation. International trade precipitously descended from $5.3 billion in 1929 to $1.8 billion in 1933 only deepening the global recession. As the lengthy lines of unemployed snaked their way around street corners across the world and with the global economy in shambles, the credibility of the contemporary governments quickly dissolved in the eyes of their suffering populaces.  Authoritarian populists of the likes of Hitler, Mussolini, and Tojo perked up with anticipation.

It was also a nadir for international relations. With the allies bitterly divided over an ongoing and asinine trade war, who was to stop the nascent Axis powers?  The winner of the tariff war was no one. The Smoot-Hawley Tariff Act fiasco stands as a glaring historical warning to anyone in the Trump Administration who thinks that raising import duties is the best way to make America great again.

How Occupational Licensing Hurts The Poor (And My Family)

 

Occupational licensing laws have not only put an excessive burden on Utah workers and consumers but upon my own family as well.

After years of the ubiquitous customer service call centers dotting the state’s job market, I grew increasingly weary and in search of greener pastures. I applied for a health insurance position anticipating a welcome change of pace. The new position required a health insurance occupational license. With higher pay and better benefits at stake, I was in no mood to delay. 

 

After less than 2 months of intense online studying and $160 later—of which my company completely reimbursed,— I excitedly became an official licensed health insurance agent. At the testing site, barely able to contain myself, I went to the bathroom in order to avoid the bewildered gaze of the proctors and proceeded to gleefully jump up and down for joy.

My cousin, Haylee’s, experience with occupational licensing didn’t exactly leave her bounding up and down ecstatically. The mother of three raucous little boys, she had to take an exorbitant amount of time out of her already hectic family life—17 months to be exact. She had to shell out over $1,600 just to be allowed a license to cut hair.

I’m not complaining about my health insurance licensing requirements. What is inexplicably unfair is how State of Utah decides to pile an excessive and onerous burden on Haylee’s shoulders but not mine. Everyone knows that your hair always grows backs after the awkward stylist errs, but mistakes on your health insurance plan are not so easily remedied.

The asininity of our occupational licensing policy doesn’t end there. Here are just a couple of quick examples. Emergency medical technician requires 28 days of training and costs $145 in fees vs a house painter with a required 730 days of training at a cost of $549. Nurse assistant takes 2 months to train at costs $559 vs a finger nail technician at 4 months and $1,647 or esthetician (makeup artist) at 7 months and $3,145. A fireman requires less training at less expensive than an esthetician.

These exorbitant costs don’t just affect the plucky woman brushing on your daughter’s makeup right before her wedding day. The price tag trickles down to Utah consumers costing households $1,000 extra per year.

In the 1950s, the government required 5% of jobs be undertaken exclusively by licensed workers. That figure has since quadrupled. On average, Utah workers are obligated to spend 417 days taking tests, classes and paying overpriced fees before they are allowed to set foot on the worksite. This ranks at a national high. Sadly, what we purchase isn’t that much safer or better quality to show for it.

Fortunately, change now dangles tantalizingly close to our fingertips.

Like the grainy videos of the enigmatic Big Foot, the rare sighting of the elusive bipartisan agreement seems to be becoming more and more scare. The difference is there is no need to meet this type of welcome ideological convergence with any cynical skepticism. Such is the case when it comes to reforming our tortuous occupational licensing regime.

The Obama administration agrees it needs to change. Conservative Congressional Republicans are on board. Libertarians want it. Even the Euro-liberals at The Economist magazine from across the pound wonder aloud why we haven’t changed it yet.

All we need is for Utah lawmakers to get on board. To find out more what you can do, hop on over to freeutjobs.com, email your state representative or let your friends and family know. No permit is required.