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06/21/2022

Opinion: Ben Stein and Smoot-Hawley

In an inflationary environment, why add fuel to the fire?

Before he graced television screens as a mild-mannered political pundit with a conservative bent, and before he was a game show star (“Win Ben Stein’s Money”), Ben Stein was an actor whose high mark was his portrayal of a high school teacher in the film “Ferris Bueller’s Day Off.”

In the movie, the teacher famously and annoyingly drones on about — Anyone? Anyone? — the Smoot-Hawley Tariff Act of 1930.

His lesson: Expanding tariffs on foreign imports “did not work, and the United States sank deeper into the Great Depression.”

Inspired perhaps by the civics lesson from Ferris Bueller’s fictional high school, the National Retail Federation in recent days entered a new phase of a “seven-figure” advocacy campaign to repeal tariffs.

Without getting into the use of the vague phrase “seven figures” for the vast gulf between $1 million and $10 million, it is the opinion of this editorial writer that the NRF is to be commended for this effort.

The campaign released a commercial/video, which is simple and straightforward. (But it's not nearly as entertaining as the easy-to-find scene from Ben Stein’s performance in “Ferris Bueller.”)

Additionally, here’s NRF President Matthew Shay’s message.

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The NRF seeks to roll back tariffs.

“We encourage the administration to work with our trading partners, particularly China, to roll back tariffs that contribute to the high cost of goods and services and provide much-needed relief for American consumers,” Shay said. “Tariffs are among the many costs out of retailers’ control that drive up prices paid by consumers. But unlike other costs, the administration can eliminate tariffs with the stroke of a pen.

“While change takes time, repealing and lowering tariffs will help relieve pressure on American consumers,” Shay said. “We know this is only one of the solutions under consideration to  rein in skyrocketing prices but we urge the administration to prioritize the repeal of tariffs.”

But what about the unfairness of foreign subsidies or price dumping on domestic markets? For that, we turn to the great free-trade philosopher Adam Smith, who pointed to the folly of inflationary tariffs: “… It seems a bad method of compensating the injury done to certain classes of our people, to do another injury ourselves, not only to those classes, but to almost all the other classes of them," Smith wrote.

[Note to protectionist readers: You’re right, that’s not the entire passage, but it’s a good introduction to the wisdom of Smith's “Wealth of Nations.”]

The NRF’s grassroots movement, “Lower Inflation Now," has a lot more to it. The group is calling on the Biden Administration to also pass the Ocean Shipping Reform Act to ease the supply chain crisis; to enact immigration reform to address the labor shortage; and to foster competition that will lower payment transaction costs.

That’s quite a cast of initiatives.

Will they work? Anyone? Anyone? Share with us your thoughts at [email protected]

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