Did tariffs caused the 1929 crash?

Just read a fascinating piece The Crash of ‘29 — A New View by Jude Wanniski (via Johan Norberg ) about the 1929 crash.

Apparently the crash was caused by the passing of a new Tariff law the day before in a senate comite. The conclusion was not made before as the law didn’t get officially signed by president Hoover until the following year. As Wanniski points out the stock market always reflect knowledge and assumptions about the future and this tariff was big news at the time.

The tariffs were brought in to protect the farmers, who hadn’t enjoyed the growth of the rest of America at the time. Just look at the recent problems here in Europe with the fake trade quotas towards China, that the EU imposed. These would have caused much more problems for European businesses and economies than for the Chinese.

Another interesting point in the article was that everything we have heard about the 20’s boom isn’t necessarily the truth. He claims that it wasn’t a bubble. That it was based on good fundamentals and a much lower tax wedge that had been implemented after WW I.

As it gradually became clearer through 1924 that the Coolidge tax bill to reduce the top income-tax rate to 25% had sufficient support for passage, the stock market began its unprecedented climb. It’s interesting that Great Britain, which did nothing to reduce the steep progressive income taxes introduced during World War I, experienced no boom at all during the 1920s. By contrast, Italy under Mussolini went from severe economic contraction to rapid expansion in 1923 as he cut the wartime personal tax rates back and also cut back tariffs and internal excises. And the French, under a center-right coalition formed by Poincare, ended a financial crisis in 1926 by slashing the general income-tax rates in half, to 30% from 60% at the top.

Wow, almost 2 decades of suffering world wide caused by the looters (forgive me I’m reading Ayn Rand at the moment). Bastards. Who was John Galt?