Risky Decision

" Friday night was a story what wasn't what was it what was -- do you know. I I would not be a bit surprised if this story doesn't become. Historic. And I hope it doesn't because that means that things will turn out the way they have in the past but history tends to repeat itself and the story that I'm talking about Friday night. Was the government releases very low key story. About the fact that they were going to. Impose. Tariffs. On tigers. Made in China. And she said oh you're rolling your his only. All know this guy thinks that tire story is the biggest thing in May be historic. Yes I do. And the reason why I do is because history repeats itself may I bring you please ladies and gentlemen boys and girls. Back to. 1930. There we war. The only would you words of the stock market had crashed in 1929. The year before big stock market crash. Then what happened oh start going into of recession. And what happened. Well there were these tool read public ends. By the name of Smoot. And hall. And good old Smoot Hawley act of 1930. Is credited. By almost every economist out there as taking our -- economic recession that we were in in 1929. And started 1930. And the Smoot Hawley act push those in two and is. Crying reason. That we went into the Great Depression. That lasted for the rest of the 1930s. What was Smoot Hawley at com all. Well I'm glad you west because to Smoot Hawley act. There was the politics of the day 19291930. Bunch of farmers across America were and agriculture of course was much bigger than than it is today is Morris. The number you know the number farms -- their lot of small farmers and so forth and so on and they were they if they were. Call and there are senators and reed Smoot did you talk. -- was one of -- and they've they said you know. Now we're getting clobbered here. I'm a word just -- was a Republican from Oregon. And they had the farmers columns saints we need we need help we're getting you know -- all these imported foods coming into America and we are getting clobbered. So what we need isn't some sort of protection for our products. Well as who went along there were more more members of congress have thought yeah yeah agriculture area where for the farmer and so well -- go along with. Raising the prices on. The imported food and other items. In Seoul bunch of items were added to the list and this is literally. What bush does from a recession to the Great Depression. Was the Smoot Hawley act of 193. At the time. There was a petition signed by over a thousand economists sent to then president Herbert Hoover. -- if you do loses you are going to crush the economy. Even Hoover. Look better Herbert or looked at it and said all of this is not good this is not gonna be good. But they said you know so politics -- wondered is that we got a bunch of people we gotta keep happy if were gonna get reelected here in Washington. And so as a result. They passed and Hoover signed the Smoot Hawley act. Why -- ban all off the cliff we went economically and in to the Great Depression. Because. What did they do. They started all over our trading partners that were involved with this all the other countries they said you know what. We are not gonna put up with this we are gonna come back and we're gonna retaliate. And -- of their four were raising the prices and tariffs on your products and so as Houston product was we're not gonna be behind -- of them because we're gonna raise. Terrorists on US product being -- other parts of the world. This started a trade war ended just got bigger and bigger and bigger. And as a result most economists will tell you that that is the reason number one. Why we won in two of the Great Depression. So how does this come around to China. We -- we got ourselves in a problem. We have to acknowledge this I don't care what side of Leo you're wrong. We have both over the last 25 years maybe thirty we have since Nixon reopen relations with China. We have gradually. But assuredly. Been sending more -- money to of them -- them to make products for was that we'd buy because of cheap labor. In China and other parts of the world. So we'd like our products. Cheap. We like them made cheaply. And we like to be able to buy are what are what ever it is on a very low price and so China and other parts of the world provide is for that. Well with this with this Smoot Hawley to rule. That the Obama and by the way they didn't go through congress like Smoot -- this is simply the Obama administration. Throwing a bone a big one. 21. Of the unions who will get into this because the president was out talking to the AF of LC IO earlier. We'll have some cuts for you from that speech today actually been all over the place to be -- at GM plant. In Lordstown Ohio earlier today. Then AF of LC IO meeting he's got another program. Meeting coming up on later as well tonight so he's he's on the on the trail like he campaigner he's not -- But -- but back to the tires so these tires. Not just rubber what's it attire now we have steel belts right because of they make the radial tires and -- of the radial tires are great invention but they got the steel belts in there. Well the United States steelworkers union. Said hey we need some help Peter. Because of the fact that there they're making those tires over in China and they're -- appeared to be US and its two elements. So if you throw a ball to the union and this union mean the united steelworkers. Union and said are right. Now it just so happens that for companies that are US companies. Make China make tires in China they've pretty much have left the US market they -- my tires -- TV sets. That we ship the jobs out of this country along time ago. For US companies to provide about two thirds. Of the imported tires from China. So are we shooting those four companies in the foot. Because of the fact that the people that they do have working for them here in the U Wesley are US companies. Their and they're obviously going to see their sales drop dramatically. Or. Those more US companies are gonna shift their production. To some other country. Where they have somebody making tires cheap. But regardless. I don't know how this is going to add one job. To the US steel industry. I don't know how this is gonna add one job to any industry here in the US infected usually when you start getting into sectors. Protectionist measures you'll see where you'll get fewer jobs. And there will be companies that is that are these US companies will be laying off people. But regardless it was thank you unions for it before electing me. Is co leader that this is a political maneuver just like Smoot Hawley was. Back in 1931 -- says this is bad and went ahead and signed it because of political considerations. That's what this is about. So. Fine. I understand. We have got ourselves in this pickle. And they buy our treasuries. And day by -- a lot of them and they'd turn around and they we'd we'd that we we are. In desperate need of China's sending us money. To buy our treasuries. To continue to fund our deficits."