Topic: Smoot Hawley

Economist Joe Lavorgna challenged the narrative that tariffs cause inflation, citing the Smoot-Hawley Act of the 1930s as a period of historic deflation. He argued that inflation is strictly a monetary phenomenon controlled by the money supply rather than trade policy. The current market volatility is attributed to shrinking corporate profit margins, as companies like Apple may be forced to absorb tariff costs rather than passing them to consumers.

CNBC uses a clip from Ferris Bueller's Day Off featuring Ben Stein to explain the historical failure of the Hawley-Smoot Tariff Act. However, the real Ben Stein appears on CNBC to defend the new tariffs, citing the need for a strong domestic metals industry in the event of a "hot war" with Russia. The hosts debate the actual cost increase to consumers, noting it may only be pennies for a six-pack of beer but more significant for industries like aerospace.