Donald Trump is ignoring an important lesson from Ferris Bueller

On Thursday, President Donald Trump said that he would be imposing tariffs for aluminum and steel. The move has almost no support among economists, including his advisors, with the notable exception of Peter Navarro, the director of the National Trade Council. For most economists, the 25% steel and 10% aluminum tariffs Trump is set to sign next week is accompanied by a sense of déjà vu.

In 1930, the Smoot-Hawley Tariff Act raised tariffs on 20,000 goods Americans bought from abroad. Imports fell significantly, but Canada and other countries retaliated and a trade war ensued, crushing exports and worsening the Great Depression.

Ben Stein’s lecture in Ferris Bueller’s Day Off explains how protectionism can backfire. Source: Paramount Pictures
Ben Stein’s lecture in Ferris Bueller’s Day Off explains how protectionism can backfire. Source: Paramount Pictures

It’s unlikely many remember the specifics. You’d have to be over 80 to remember Smoot-Hawley firsthand, and perhaps over 45 to have learned about it in school.

But Smoot-Hawley is likely buried in your subconscious, somewhere. This policy, after all, was the lesson taught in the 1986 movie “Ferris Bueller’s Day Off” by economist, speechwriter, game-show host, conservative pundit and sometime actor Ben Stein while Ferris was on the loose.

To his sleeping classroom, the teacher, played by Stein, has a monologue:

In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the… Anyone? Anyone?… the Great Depression, passed the… Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act,” droned Stein, as students chewed gum, drooled, and slept. “Which, anyone? Raised or lowered?… raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression.”

With Trump’s economic protectionism coming back in vogue, Stein, a Trump supporter, sees the Smoot-Hawley (or Hawley-Smoot) lesson as just as relevant today.

“This is one of Mr. Trump’s worst ideas,” Stein said in an interview with Yahoo Finance. “He has a number of not-very-good ideas, he has a number of bad ideas, and a number of very good ideas. Protectionism is probably the single worst idea.”

For Stein, a free-tradist who is no stranger to policy as a former speechwriter for Presidents Nixon and Ford, restricting imports and inhibiting trade could present a massive problem similar to the 1930 situation.

“There will be retaliation. Mr. Trump is looking for a trade war and he’s going to get it,” said Stein in the same mild manner as his Bueller monologue. “All these countries are not going to be pushed around.”

A Goldman Sachs analyst note circulated on Thursday warned of this possibility, and said the tariffs are not based in economic arguments but rather national security ones.