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Tariffs Weaken more than Trade

Right in the Middle of his Speech

In this cartoon titled Right in the Middle of His Speech (Knott) we see a man identified as President Herbert Hoover falling through a stage labeled “G.O.P. Platform”. One of the planks, titled “Tariff Plank” has given snapped in two. Hoover is holding a sheaf of papers titled “Blessings of High Tariff”. From the title of the cartoon it is evident that Hoover was delivering his speech from these papers. At the bottom of the panel a sketched crowd of people are sitting on the ground, smiling at his plight. The cartoon is dated October 15, 1932 and the associated editorial is titled Tariffs Come Home to Roost (“Tariffs Come Home to Roost” 2). The unnamed author of the editorial lists the ways that the “Blessings of High Tariff” harmed the economy of the United States and Hoover’s chances of reelection.

Although the tariffs are not named anywhere in the comic or the editorial, there is only one tariff that was infamous enough to be the tariff on everyone’s mind: the Tariff Act of 1930, commonly known as the Smoot-Hawley Tariff or Smoot-Hawley. It was passed into law over two years before this cartoon was published, but the tariff was still very much on the minds of citizens and voters.

In 1932 people were blaming President Hoover for the Great Depression. Even today economists debate whether the Smoot-Hawley Tariff turned what might have been a global economic downturn into The Great Depression (“Smoot-Hawley Tariff Act”). At the time of its inception, the Smoot-Hawley Tariff was protested by bankers, economists, and editorial writers across the nation. Over a thousand economists signed a petition to protest the Smoot-Hawley Tariff (“The Battle of Smoot-Hawley”). In 1930 the tariff on dutiable imports was 6% on average. However, at the time Knott published this cartoon in 1932 the forces of deflation raised the effective rate of tariff costs on dutiable imports by 59.1%. (“The Battle of Smoot-Hawley”).

Before Smoot-Hawley was signed into law the stock market had seen some notable recovery from its infamous 1929 crash, but the market took another nosedive as soon as it became clear that Smoot-Hawley would pass. Other nations responded quickly with tariffs of their own. For example, the editorial Tariffs Come Home to Roost mentions the Ottawa tariff, in which Canada raised the duties on American goods and lowered the duties on British goods. The results of this trade war was a significant decrease in trade globally and the movement of factories from the United States to Canada (Tariffs Come Home to Roost).

In 1932 Hoover was running for re-election. He was an extremely unpopular candidate as many people blamed him personally for the Great Depression. Despite this, the Republican party was continuing to run on a platform of economic protectionism and supported the Smoot-Hawley Tariff. The Democrats countered with a platform of lowering tariffs and “…[the Democrat’s] candidate, Franklin D Roosevelt, hammered Hoover during the campaign for signing the Smoot-Hawley bill” (Gordon).

This topic of election platforms moves directly into an analysis of Knott’s cartoon.  A political platform is the set of goals and policies for a political party. Individual portions of the platform are often called “planks”. Knott uses these terms to form a visual pun. The GOP platform here is literally unable to support Hoover as he tries to woo voters. Notably the plank that is the weakest and responsible for this disaster is called the “tariff plank”.  The implication is that it does not matter how solid the rest of the platform is, this one issue is enough to bring Hoover down.

Hoover’s literal downfall is not a private disaster either. There is a crowd gathered around, and the disaster is very apparent to the people who are watching it. The gathered crowd is dressed in casual clothing and sitting on the ground; they are not peers of the suit-wearing Herbert Hoover. The people are smiling as they watch Hoover fall. They seem amused that Hoover is finally seen suffering repercussions for the tariff that impacted them. On the stage there is a microphone, perhaps representing the rest of the country who might listen to such a speech over the radio. The entire nation is aware of what is happening.

Interestingly, it is not Hoover himself who is the cause of the failure. This is perhaps reflective of the fact that although he signed Smoot-Hawley into law, he objected to what it became after special interest groups and Congress finished drafting it. He went so far as to denounce the Smoot-Hawley Tariff, and only signed it into law under pressure from his party (Gordon). In the comic, Hoover is not failing the G.O.P. Platform of economic protectionism, the platform is failing his reelection efforts. The author of the editorial suggests that if Hoover were to “…confess in open meeting that he committed a great sin when he signed the tariff act against his better judgement” (“Tariffs Come Home to Roost” 2) it would be very successful with voters.

The wrong tariff at the wrong time can result in a trade war with global repercussions. The “Blessings of High Tariff” in the cartoon were enumerated in the accompanying editorial as “…poor business, low wages, and great unemployment” (“Tariffs Come Home to Roost” 2). Tariffs were and are a powerful tool for improving a national economy, but their deployment must be judicious. Knott chose to focus this particular cartoon on the personal, political repercussions of the tariff.

 

Works Cited

“The Battle of Smoot-Hawley.” The Economist, 18 Dec. 2008, www.economist.com/node/12798595. Accessed 27 Mar. 2018.

Gordon, John Steele. “Smoot-Hawley Tariff: A Bad Law, Badly Timed.” Barrons, 21 Apr. 2017, www.barrons.com/articles/smoot-hawley-tariff-a-bad-law-badly-timed-1492833567. Accessed 26 Mar. 2018.

“Herbert Clark Hoover.” Encyclopedia of World Biography, 2nd ed., vol. 7, Gale, 2004, pp. 483-485. Gale Virtual Reference Library, http://link.galegroup.com/apps/doc/CX3404703059/GVRL?u=txshracd2598&sid=GVRL&xid=71e4ab99. Accessed 22 Feb. 2018.

Knott, John Francis. Right in the Middle of his Speech. 15 Oct. 1932. America’s Historical Newspapers, infoweb.newsbank.com.ezproxy.lib.utexas.edu/iw-search/we/HistArchive/?p_product=EANX&p_theme=ahnp&p_nbid=L63Q49PFMTUyMjMzMzk1Mi42MTE4MzI6MToxMjoxMjguODMuNjMuMjA&p_action=doc&s_lastnonissuequeryname=4&d_viewref=search&p_queryname=4&p_docnum=1&p_docref=v2:0F99DDB671832188@EANX-10483D9233E8A080@2426996-10483D92A9E93CD3@17-10483D94E2A30003@.

“Smoot-Hawley Tariff Act.” Gale Encyclopedia of U.S. Economic History, edited by Thomas Carson and Mary Bonk, vol. 2, Gale, 2000, p. 933. Gale Virtual Reference Library, http://link.galegroup.com/apps/doc/CX3406400866/GVRL?u=txshracd2598&sid=GVRL&xid=370b678b. Accessed 22 Feb. 2018.

“Tariffs Come Home to Roost.” Dallas Morning News, 15 Oct. 1932, p. 2. America’s Historical Newspapers, http://infoweb.newsbank.com.ezproxy.lib.utexas.edu/iw-search/we/HistArchive/?p_product=EANX&p_theme=ahnp&p_nbid=T58A4FEJMTUyNjM1MTgwMy42MjQ1MjI6MToxMjoxMjguODMuNjMuMjA&p_action=doc&d_viewref=search&s_lastnonissuequeryname=9&p_queryname=9&p_docnum=1&p_docref=v2:0F99DDB671832188@EANX-10483D9233E8A080@2426996-10483D92A9E93CD3@17-10483D94EA6FB419@Tariffs%20Come%20Home%20to%20Roost

The Tariffs that Broke the Camel’s Back

Gary Cohn

On March 7, 2018, President Donald Trump signed a sweeping steel tariff act into law via executive order. As of the writing of this blog there have been several material changes made to this tariff in terms of the countries subject to it and the products covered. In addition to steel, the tariff initially included aluminum, washing machines, and solar panels.  It is unclear what the long-term legacy of these tariffs will be. However, in the short term they have conclusively led to Gary Cohn’s departure as the Director of the National Economic Council under President Trump. The exact circumstances of Cohn’s resignation are murky, but Jack Ohman, the artist of the cartoon above, thinks that Cohn was kicked out. Bret Stephens, author of the editorial “Gary Cohn’s Breaking Point,” believes that Cohn hit a breaking point either personally or professionally. Whatever was happening behind the scenes between Trump and Cohn, clearly the steel tariff was the straw that broke the camel’s back.

John Knott’s Right in the Middle of his Speech and this untitled cartoon by Jack Ohman work well together as bookends. Both cartoons address the same subject: the professional fallout of unpopular tariffs. Their differences highlight how divisive tariffs are as a tool for boosting the national economy. In Right in the Middle of his Speech, President Hoover is paying the price for the Smoot-Hawley Tariffs at the hands of the voters who have had two years to observe the effects of the tariff. In Ohman’s untitled cartoon, it is Gary Cohn who’s career is plummeting even before the steel tariffs were officially signed into law.

Gary Cohn and President Trump had a fraught working relationship. Before joining the Trump Administration, Cohn was a high-ranking employee with Goldman Sachs. The two had very different points of view regarding what would be best for the economy of the nation. Donald Trump was the first presidential candidate since Herbert Hoover to run on a platform of economic protectionism. By contrast, Cohn was a globalist and proponent of free trade.

The difficulties between the two men took a personal turn in the aftermath of the August 2017 Charlottesville protest, Rally for the Right. The Rally for the Right was comprised primarily of alt-right political groups that included white supremacists and neo-Nazis who chanted anti-Semitic slogans and waved Nazi flags. Counter-protestors showed up to oppose the Unite the Right rally. While violence did erupt between the two groups, it was the neo-Nazis who were there for Unite the Right that had showed up with weapons and shields. It was also a neo-Nazi supporter that drove a car through a group of counter-protestors, injuring 19 and killing one.

The public outcry was immediate; however the Trump administration was slow to issue an official response. When President did respond to the incident in Charlottesville, it was via a tweet which read in part “…There is no place for this kind of violence in America. Lets [sic] come together as one!” (Trump). People were shocked by the weak response. The day after this tweet President Trump had a press conference where the American public expected him to denounce the hateful ideology of the neo-Nazis and the violence committed by their supporters. What Trump said instead of that was, “There were many fine people on both sides” (Wang, “Read the Transcript…”).

There was a great deal of anger from many quarters due to Trump not only failing to condemn the vicious bigotry of the neo-Nazis, but saying they were “fine people”. Gary Cohn, a Jewish man who gave generously to Jewish charities, was standing in the lobby of Trump Tower when the President made these equivocating remarks. Then Cohn was left to field economic questions immediately after Trump completed his statement. In the aftermath of this, Cohn would publicly criticize the Trump administration’s response to Charlottesville but without naming the president explicitly. “…that the Trump administration “can and must do better” to condemn hate groups and “do everything we can to heal the deep divisions that exist in our communities”,” (Kelly, “Gary Cohn, Trump’s Adviser, ….”). In that same article Cohn said the only reason he did not resign was that he wanted to shepherd through tax cuts that he had helped author, a once in a lifetime opportunity.

However, after the tax cuts were passed into law in December of 2017, Cohn and Trump began butting heads over the prospect of the heavy steel tariffs President Trump wanted to impose. Cohn was among many voices that protested the tariffs. Once it became clear that the tariffs were going to happen, Cohn tendered his resignation within days. Cohn resigned on March 6, 2018 and Trump signed an executive order to enact tariffs on March 8. The reason he gave was that if Trump was not going to listen to his advice, there was little point in holding the position of Director of the Economic Council.

In addition to the professional, economic disagreements between the two men, there was doubtless a large amount of personal conflict. President Trump has always valued personal loyalty above any other characteristic of the people who work with and for him (Olen, “Trump’s Creepy, Autocratic Obsession with Loyalty). Cohn’s criticism of the Trump Administration’s handling of the Charlottesville incident stung. While Cohn and Trump were on a similar wavelength regarding the tax cuts, the steel tariff was Trump’s personal pet project; thus, when Cohn spoke out against the tariff, there is little doubt that President Trump saw the action as further evidence of Cohn’s disloyalty.

Ohman’s cartoon depicts the moment that Cohn officially resigned on March 6, 2018 (Ohman). Visually it is incredibly similar to John Knott’s cartoon Right in the Middle of his Speech.  As Cohn leaps from the crumbling steel infrastructure, he insists, “I jumped, I swear…”; meanwhile, Trump is standing on the construction platform and appears to have kicked Cohn from the building. There’s good reason for Cohn to insist that the departure was of his own volition. Before he left Goldman Sachs to join the administration as the Director of the National Economic Council, Cohn was on the shortlist of candidates to replace the CEO of Goldman Sachs; thus, resigning as the result of a stubborn president would look much better for his career than being fired.

The steel tariffs are referenced in this cartoon by the crane labeled “Art of the Steel Tariff,” which is also a play on the 1987 autobiography about Trump– The Art of the Deal– that actually was authored by ghostwriter Tony Schwartz. In Ohman’s cartoon, the “Art of the Steel” crane seems to be out of control. The cable is whipping back and forth, and the hook is snagged on a beam of the steel infrastructure that Cohn has just been kicked from. This is likely more than simple artistic license. One of Cohn’s pet projects was the rebuilding of American infrastructure; bridges, railways, power grids, and so forth (“Gary Cohn Joins the Exodus”). Such infrastructure projects would require lots of steel and aluminum, which would be made more expensive by the tariffs.

The last notable feature of the comic is the sign behind President Trump, which reads “Trump Chaostruction Inc.” In addition to many other industries, the Trump Organization included construction companies. Ohman makes reference to this as he makes a portmanteau with “construction” and “chaos.” One of the things that the Trump administration has been criticized for is the high churn rate among appointees and employees. In the first year of his administration the turnover rate was more than 40% (Keith, “White House Turnover was Already Record Setting….”). At the time of his departure, Gary Cohn was the highest-ranking member of Trump Administration to leave, a move that prompted speculation about instability. Trump responded to that criticism with the following tweet:

The new Fake News narrative is that there is CHAOS in the White House. Wrong! People will always come & go, and I want strong dialogue before making a final decision. I still have some people that I want to change (always seeking perfection). There is no Chaos, only great Energy!

The circumstances of the two cartoons are very different. The Knott cartoon Right in the Middle of his Speech was created with the benefit of hindsight. It was published more than two years after the implementation of the Smoot-Hawley Tariff. In contrast, this untitled cartoon by Ohman was published the day after Trump’s steel tariffs. Hoover supported the Smooth-Hawley tariff; Cohn opposed Trump’s steel tariffs.

Nonetheless, both cartoons use the same visual language and have the same moral: tariffs can be deadly to a politician’s career. This is illustrated in both cases with the politician falling from a structure. Like Knott, Ohman chooses to focus his cartoon on the personal consequences of a tariff. Trade wars, recessions, high prices, and other pitfalls of tariffs are incidental to the point the artists are making.

 

 

Works Cited

Diamond, Jeremy. “Top Economic Adviser Gary Cohn Leaves White House in Wake of Tariff Rift.” CNN, 7 Mar. 2018, www.cnn.com/2018/03/06/politics/gary-cohn-white-house-tariffs/index.html. Accessed 9 Apr. 2018.

The Editorial Board. “Gary Cohn Joins Exodus.” The New York Times, 6 Mar. 2018. The New York Times, www.nytimes.com/2018/03/06/opinion/gary-cohn-resignation.html. Accessed 8 May 2018.

J.E.F. “Gary Cohn Resigns as Donald Trump’s Economic Advisor.” The Economist, 7 Mar. 2018, www.economist.com/blogs/democracyinamerica/2018/03/tariff-rifts-0. Published the day after he resigned

Keith, Tamra. “White House Staff Turnover was Already Record Setting. Then More Adivsers Left.” National Public Radio, 7 Mar. 2018, www.npr.org/2018/03/07/591372397/white-house-staff-turnover-was-already-record-setting-then-more-advisers-left. Accessed 16 Apr. 2018.

Kelley, Kate, and Maggie Haberman. “Gary Cohn, Trump’s Adviser, Said to Have Drafted Resignation Letter after Charlottesville.” New York Times, 25 Aug. 2017, www.nytimes.com/2017/08/25/us/politics/gary-cohn-trump-charlottesville.html. Accessed 17 Apr. 2018.

Knott, John Francis. Right in the Middle of his Speech. 15 Oct. 1932. America’s Historical Newspapers, infoweb.newsbank.com.ezproxy.lib.utexas.edu/iw-search/we/HistArchive/?p_product=EANX&p_theme=ahnp&p_nbid=L63Q49PFMTUyMjMzMzk1Mi42MTE4MzI6MToxMjoxMjguODMuNjMuMjA&p_action=doc&s_lastnonissuequeryname=4&d_viewref=search&p_queryname=4&p_docnum=1&p_docref=v2:0F99DDB671832188@EANX-10483D9233E8A080@2426996-10483D92A9E93CD3@17-10483D94E2A30003@.

Ohman, Jack. “Jack Ohman.” GoComics, Universal Press Syndicate, 8 Mar. 2018, www.gocomics.com/     jackohman/2018/03/08. Accessed 14 May 2018. Cartoon.

Olen, Helen. “Trump’s Creepy, Autocratic Obsession with Loyalty.” The Washington Post, 30 Apr. 2018, Opinion sec. The Washington Post, www.washingtonpost.com/blogs/plum-line/wp/2018/04/30/trumps-creepy-autocratic-obsession-with-loyalty/?noredirect=on&utm_term=.3d0a68b808d2. Accessed 11 May 2018.

Stephens, Bret. “Gary Cohn’s Breaking Point.” The New York Times, 7 Mar. 2018. The New York Times, www.nytimes.com/2018/03/07/opinion/gary-cohn-breaking-point.html. Accessed 8 May 2018.

Trump, Donald J. “The new Fake News narrative is that there is CHAOS in the White House. Wrong! People will always come & go, and I want strong dialogue before making a final decision. I still have some people that I want to change (always seeking perfection). There is no Chaos, only great Energy!” Twitter, 6 Mar. 2018, twitter.com/realDonaldTrump/status/971006379375972354.

—. “We ALL must be united & condemn all that hate stands for. There is no place for this kind of violence in America. Lets come together as one!” Twitter, 12 Aug. 2018, 10:19 AM, twitter.com/realDonaldTrump/status/896420822780444672?ref_src=twsrc%5Etfw&ref_url=https%3A%2F%2Fwww.vox.com%2F2017%2F8%2F12%2F16138610%2Fcharlottesville-nazi-rally-trump-tweet&tfw_site=voxdotcom.

Wang, Christine, and Kevin Breuninger. “Read the transcript of Donald Trump’s jaw-dropping Press Conference.” Dwd. www.CNBC.com, CNBC, 15 Aug. 2017, www.cnbc.com/2017/08/15/read-the-transcript-of-donald-trumps-jaw-dropping-press-conference.html. Accessed 16 Apr. 2018.