Moon of Alabama used this chart to chat about Schlaes.
A. Smoot Hawley Tariff ActThe first misstep according to Shlaes was the Smoot-Hawley Tariff Act which increased tariffs on imports to the U.S. by up to 50%. It was put into law in June 1930 by the Republican congress under Hoover. That would be at point A on the GDP chart. Smoot-Hawley was indeed bad.
B. Democrats took over Congress in November 1932 and in early 1933 appointed Ferdinand Pecora as commission counselor. Pecora found many malpractices on Wall Street and his investigation led to the creation of the Securities and Exchange Commission. We can put these events at point B of the GDP chart
C. Hoover’s tax decrease in 1929/30 was followed by four years of decreasing GDP. His “misstep” tax increase was enacted in 1932 and took effect only in 1933, point C in our graph. From there on GDP went up.
D. New Deal beginnings.
Shlaes, according to her Wikipedia entry “has no formal economic training.” That certainly shows. She also seems to have zero training in history as she is unable to organize the sequence of events in a coherent way. Events and policies that obviously led to increases in GDP are attributed as having deepened the depression.
(reformatted by rdan for a quick take….the original is more detailed and much longer. I personally would not use wikipedia as an academic source, but liberties are taken and the articles linked looked reasonably accurate))
Smoot-Hawley corrected…(h/t Ken)
One Salient Oversight sends his thoughts on the issue Wrecking the economic recovery.