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BK,
No. The problem was the imbalance. Smoot-Hawley had nothing to do with that, and it didn't affect it in any significant way. Imbalances like that don't just correct themselves. They have to be fixed. That means that the government has to take action.
That said, you and I are both in agreement that the bailouts won't work, and they will infact make the situation worse. They are supply-side action.
Europe raised tariffs in anticipation of Smoot-Hawley in 1929, after it passed the house. Smoot-Hawley was a disaster for everybody and greatly increased the length and the depth of the depression.
If congress had sat on their hands and said let them eat cake, things would have improved more quickly.
Bailouts are just chasing good money after bad. If these banks were worth anything then investors would have spent money to snap them up. They haven't which is indicative of the true value that the market places on them. The markets are going to keep dropping until all the bubble has been purged off and the market overshoots to where investments are undervalued again. We are nowhere near that right now.
If congress had sat on their hands and said let them eat cake, things would have improved more quickly.
Bailouts are just chasing good money after bad. If these banks were worth anything then investors would have spent money to snap them up. They haven't which is indicative of the true value that the market places on them. The markets are going to keep dropping until all the bubble has been purged off and the market overshoots to where investments are undervalued again. We are nowhere near that right now.
That said, you and I are both in agreement that the bailouts won't work, and they will infact make the situation worse. They are supply-side action.
), a Romney/Jindal ticket might look good.
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