this post was submitted on 07 May 2025
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And here I thought The Great Depression started in 1929. I'm not saying tariffs in 1930 didn't make it worse, but they didn't cause it.
I would say that the Tarrifs are a further attack on the working class as they were back then. Another tool to consolidate capital.
The largest difference today is the financialization of our economy (basically meaning every company runs like a bank). This had been a method of consistently allowing the contradictions of capitalism to be delayed and passed off through layoffs and stock buybacks to further sustain the bubble of this system.
It's almost impressive at how well capitalism has adapted throughout the centuries to suck more and more away from the working class before it has to deal with a potential revolutionary "breaking point". It's definitely something Marx could have never predicted.
TLDR: I would not say that tarrifs are the cause of either of these events. I would say they are a tool of the ruling class to be used in times that capitalism hits a crisis. The cause is capitalisms contradictions itself. These extreme tarrifs are just a tool to attempt to deal with those contradictions.
Yeah unregulated capitalist economy did that. Good thing we didn't deregulate the economy since then though.
/s
2008 happened for the exact same reasons as 1929, because some of the protections put in place because of 1929 had been rolled back many years before. It wasn't as deeply bad because (dare I say) the US had a reasonable executive branch very shortly after.
But none of those protections were reimplemented. Credit default swaps are still totally a thing, for example.
The "reasonable executive branch" decided that bailing out Wall Street was a good idea instead of bailing out the people. Just more Reaganomics, which always leads to economic struggle.
There's a reason why nobody under the age of 40 (and also above the age of 40) has been able to afford a house since 2008.
Obama just looks reasonable compared to the disasters of Bush Jr. and Trump.
CDS markets are also, currently, right now, freaking the fuck out rofl.
Ive been saying this since Trump announced his tariff / deportation policies before he got elected:
Great Depression 2.0, with nukes and climate change this time!
That's a misunderstanding of the causes. Now, admittedly there's a debate on this so what I will say is an opinion, but one that shows how the tariffs did cause the great depression.
The problem people have in understanding the great depression is the initial shock isn't the cause so much as the trigger to the cause which is the tariffs.
Had the tariffs not come into play, the stock sell off and subsequent deflation could have been resolved with simple monetary easing, which is what we do today. This would have simply been a recession and we would move on. However, the tariffs following the stock sell off is why it's the great depression and not just a simple recession.
In fairness, monetary easing policy didn't really come into play until after Brenton wood agreement. That said, it would have been the right solution during the onset of the great depression.
So you can't actually say that tariffs didn't cause the great depression as again had it not been for tariffs we would have pulled through.
With that in mind, would monetary easing help us this time after the shock of tarrif-ing the hell out of everything?
No, the tariffs are actively preventing monetary easing. If you were wondering what the news about bond rates and the conflict between Bessent and Powell is about, it's because they can't ease.
At a core easing relies on borrowing money to fix the downturn. Usually, when a downturn happens, interest rates go down because there's less to invest in. If you can't get a 8% return on stocks, you buy bonds until bond returns go below 4% or so. Except, thanks to crazy man tariffs, no one trusts the bonds anymore. So USA can't ease.
I also want to note, this was clearly Bessents original plan. Hurt the economy with tariffs, then do easing and pull more money back into the American Treasury. But oops, no one trusts USA anymore...
*Edit: Lol, god damn this happens fast. Powell is talking about what I'm talking about here literally just now.
https://lemmy.ml/post/29763814?scrollToComments=true
So the inflation he's talking about is why they can't ease. Normally when stocks go down, bonds go up it's caused by deflation. People stop spending money so prices go down and thus, bond rates go down. But we're not seeing deflation, we're seeing inflation, which again is causing the inability to monetarily ease. It's just funny to me we were just talking about this and bam, there's a news article.
Sweet jebus, you're not joking. That really was fast. Thanks for being ahead of the curve for us lonely souls on the Fediverse - even if it was only for a few hours or so. And thanks for answering my question.
This aligns strongly with some sentiment I've seen around here. That what we're really up against is just a cadre of goons that are laser-focused on short term greed, a very simple playbook, and little else. I say "goon" only because I'm at a loss for a word that means: "dangerous like a cornered-and-hungry predator, yet piloted by weaponized levels of stupidity."
Things can have multiple causes spread out over time. The Great Depression didn't become Great until 1932 and the first causes were a flurry of bad borrowing and over-valuing of stock that started in the early 1920s.
No, you're right. 1929 came before 1930. There's much to unpack on the subject, but Smoot-Hawley did not cause The Depression. Worsened? Maybe, probably? Sure.