smoot.bout shawn smoot? >> we found out that he ran an allstate office there in west knoxville. >> married, children? >> married, was no longer married at that particular time. >> reporter: amy denlinger is a former employee of shawn's. >> what were your impressions of shawn? >> seemed like a nice enough person, outgoing, typical sales, easy to get along with. >> reporter: shawn smoot, the name rang a bell with brooke's family and friends. not long after brooke's divorce, shawn had hired brooke as an assistant in the insurance office. >> i remember the day that she had the interview. we had lunch right before, and she was so excited, you know? >> it was a real job. and i said there's going to be so much potential for you to move up in this company. you know? i was really proud of her. >> did you feel like this was kind of the fresh start brooke needed? >> yeah, we did. we thought -- we all thought it was going to be a good thing for her. >> did she seem happy? >> oh yeah, she loved it. i thi

what i'm saying is that tariff the smoot-hawley tariff was a key cause in the great depression. the third and final one i want to do under the great depression is president hoover responded. you are staying hoover was a republican and he absolutely was. he was a member of i guess si with dave the liberal wing of the republican party and his presidency was in deed a disaster but he wanted to use government whenever he could then thought it would be good. he raised taxes because he thought this would be good to gather more money for the government as we are losing money because the depression is creating lower revenues, lower income and therefore lower revenue coming to united the united states. he thought attacks rate would be good. the tax rate in 1929 when hoover became president was 25% maximum i have an essay by the way a chapter in the book in "the myth of the robber barons" on andrew mellon which talks about the tax rate which was lowering the tax rate in the 1920s down to 20% and when we did that big a tremendous inventions like talking movies, radio. here's one that's goo

the smoot hawley tariiffs was the highest tariiffs in us history. it was and acted during president hoover's presidency when the great depression began. now you're thinking g, a tariiffs, that's a tax on imports. tariff is helping to cause the great depression? that sounds like it may not quite make sense but it does if you think of it this way. tariffs have to do with trade. when you tax imports and tax them highly, you restrict trade. when you restrict trade, you slow down and economy. in particular, the restrictions that we had in the smoot hawley tariff when you had a high tariff on 3000 items and we raised tariffs highly on several of them, we had a situation where for example we had switzerland was a major export, swiss watches where the best watches in the world. and they sold, we would translate this todollars today, they sold for $30 apiece . now, the swiss watches were the best in the world, they kept perfect time and sold for $30 apiece. american-made watches from new england states like rhode island were not as good and they cost $45. in

so what i'm saying is that tariff, the smoot-hawley tariff, was a key cause in the great depression. the third and final one of what to do under the great depression is that president hoover responded, you know, you're saying hoover was republican. he absolutely was. he was a member of the liberal wing of the republican party. his presidency was indeed as a disaster but he wanted to use government whenever he could thought it would be good, and he raised taxes because he thought this would be good to gather more money for the government because we are losing money because the depression is creating lower revenues, lower income and, therefore, lower revenue coming to the united states. so he thought a tax rate would be good. the tax rate in 1929 when hoover became president was 25% maximum. i have an essay by the way, a chapter in the book, "the myth of the robber barons" on andrew mellon which you have, which talks about the tax rate, which actually was lowering the tax rate in the the 1920s to get it down to 29%. 29%. with tremendous inventions like talking movies, radio. here's one

what's so concerning, as you point out, next year's the 90th and veniversary of smoot hawley.t go away easily because it's revenue to the u.s. government. liz: everybody run out and get your running shoes right now. and work boots. good to see you. keep us posted on any developments here. >> you got it. thanks, liz. liz: matt priest. with the closing bell ringing in 20 minutes, we do understand the president is taking questions just as he leaves the white house to go to bedminster, new jersey. we are going to get that for you as soon as we start seeing headlines hit the tape. that is how this works. stay tuned through this commercial break. it will take a couple minutes. you will be on perfect timing here. we will be right back. the dow has cut nearly all of its losses. imagine traveling hassle-free with your golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few c

you look what happened with the smoot-hawley. i don't mean to talk about smoot-hawley.he market fell 90%. when i was in white house 1970 to 1972, devaluation of dollar, 10% import surcharge, job development credit, excluded foreign aid, we had protectionist administration, the stock market fell by 50%. when you look at it historically trade has a huge, huge net effect, way beyond what you would expect given the size of how much trade there is. it is really very important to markets. one of your previous guests said, it has been a long time for the boom to occur, that is not what causes recessions. recessions are caused by policy actions. they can occur in taxes, occur in spending. occur in regulations. they can incur because of trade policy. that is only thing i see we have a big issue about right now. we're with china. i would love to see a great free trade deal done with china that would boost the market by well over 5,000 point, this morning we were greeted with really poor economic data out of germany, poor economic data out of china. so-called global recession. tha

of the world had to follow and then in the united states we confiscated gold but we introduced the smoot hawley tariffs and here we have trump you know trying to we're it's on his office on a software we're negotiating with china we're not negotiating with china now we have tariffs now like we're raising tariffs so it's all chaos but he tweeted this stream our country has lost typically trillions of dollars to china over many years they have stolen our intellectual property at a rate of hundreds of billions of dollars a year and they want to continue i won't let that happen we don't need china and frankly would be far better off without them the vast amounts of money made and stolen by china from the united states year after year for decades will and must stop our great american companies are hereby ordered to immediately start looking for an alternative to china and clued in bringing your companies home and making your product in the u.s. i will be responding to china's terrace is that true this is a great opportunity for the united states to basically bring all their stuff home while t

that is why i talked about smoot-hawley when i heard about this on friday. that was 1930.assed something, -- against almost every economist in the country saying trade war's don't work. let to the great depression that was only ended by world war ii. here we have a situation tariffs. there's only one economist that thinks this is a good idea that can be identified. sadly is the unique person giving president trump advice in the white house. paul: you mentioned recession, let's go there. we have morgan stanley now predicting one within six months to nine months. you think that is a credible risk echo gary: i think it is a real rest. i cannot imagine president trump would want that. if you could resolve this trade situation, it would give him the kind of booze he needs. right now people's 401(k)s, stock holdings are getting hit he is trying to press for lower interest rates. but he is also talking about moving capital gains task -- tax unless the holding. exceeded the rate of inflation, which would be a hugely similar to the factor but if he does not resolve the trade war an

you have to go back to smoot-hawley stuff. that was before we had to deal with central banking as it is right now, right? >> indeed. even smoot-hawley wasn't as interconnected as it is now. connell: true. >> 1025 -- tentacles of trade are between china and u.s., between europe and the u.s. that will be very hard to dismantle. impact that could have on consumption, business investment is very hard to predict, all, could be, should be, we don't know. i guess is a larger point right now. so, what kind of mind-set do you think investors should have at this stage? seems like today's trade, i'm not sure what to expect. i will sell off on risk assets now, figure it out over the weekend or whatever, right? >> i think the downside risk, one of the things we said u.s. economy at least is humming along. the major risk comes from escalating trade tensions. now the risk seems to be crystallizing. the global economy slowing down much more significantly. connell: right. >> that too can cast a pall on the markets. connell: money coming into b

i think it's wonky, but they should google smoot holly act and see what happened after that. >> there. >> history is a lesson. have a good weekend. thanks so much. >> that's a great point about the chinese waiting out the election as well. >>> several democratic presidential candidates want the police officer at the center of eric a garner's death to be fired. this morning the police department will make their recommendation. how do you gauge the greatness of an suv? is it to carry cargo or to carry on a legacy? its show of strength or its sign of intelligence? in crossing harsh terrain or breaking new ground? this is the time to get an exceptional offer on the mercedes of your midsummer dreams at the mercedes-benz summer event, going on now. lease the gla 250 suv for just $329 a month at the mercedes-benz summer event. mercedes-benz. the best or nothing. so you have ten years experience... i do. but no phd? i do have a masters in early childhood development. you don't mind if i record this, do you? uhh, no! first kid here's all the numbers, food's in the fridge, oh and lucas likes to

we don't face the smoot-hawley tariff act that was a tariff across the world of 30%.hat is other people are leaving china to produce in other countries to avoid the tariffs. that is why prices are not going up for u.s. consumers. more and more companies will leave china. i think the danger to the u.s. economy is way less than people think, what we're seeing in the market, it is volatility. people get scared, there is a reason. the machines start selling. but every time we done this we bounced back because the economy stayed resilient. i think it still will this time. neil: to that point, hadley, i should point out goldman ceo david salomon was on television this morning. he says the economy is doing fine, that a recession is not on the horizon. they did change their fourth quarter numbers. they lowered that. i think the media has taken this, we're seeing recession thing, reminds me of december almost every day headlines were recession, were recession. it spooked consumers. consumer incomes went up through the roof that month, but their spending fell precipitously, and

trade versus years and years ago, people say have we down this road before, great depression days, smoot-hawley, those were members of congress. the president has a lot of unilateral power when it comes to trade decisions right? >> you're right the president has certain amount of power with regard to trade delegated by congress, but ultimately congress has the power to regulate international trade. congress might pass a law that could limit u.s. companies doing business abroad but the president can't unilaterally declare companies to pull out of china. he is not a king. he is a president. connell: dominic, thanks for your analysis today. we appreciate it. melissa. melissa: all right, back to the markets. the dow plummeting more than 600 points today. joining me now on the phone, liz ann sonders, senior vice president at charles schwab. let me ask you first are there a lot of investors waiting for another shoe to drop? the president said later today he would have a response later on. is there still a lot of buzz waiting for that in your mind? >> who knows. i think we've gone past the point where

to how this is going to play out and as we talked about before, we are at the 90th anniversary of smoot-hawley next year. we have been paying duties forever. these get put in place, this could go on for a long long time. liz: president trump did say when he announced that some products would get a reprieve from that 10% tariff that's supposed to kick in september 1st that he was doing it for the christmas season. listen, if i were more of a politician, which i am not, i would think to myself yeah, he doesn't want to annoy voters who want to buy things like consumer electronics and nativity scenes which believe it or not, nativity scenes have been exempt from those 10% tariffs in a couple weeks, that he does not want to annoy american consumers ahead of the holidays and ahead of the 2020 elections. >> that's right. so what does that tell you? it tells you that he knows in his heart of hearts that american consumers pay duties. these are taxes. you add to the cost of a good coming across the border, that cost gets multiplied out and the american consumer pays more and even chris wallace a couple

exposed in a more dramatic fashion to tariffs due to tariffs that go all the way back to depression era smoot-hawley rules. right now, while foot locker is trying to climb up off the bottom it's still down about 2%. either way it's a new annual low, part of the dumpster fire that is the retail sector at this hour. we would expect these names with china exposure to get slammed but charlie gasparino is here with his take on why the broader markets have taken a dive. every single s&p 500 sector is in the red at the moment. >> yeah. i think part of it is just a lack of confidence in trade policy out of the administration. i would say, you know, we can crunch the numbers all day. no one can really tell if the tax cuts and deregulation, you know, whether that is enough to offset a trade war with china and the rest of the world. you know, the markets can't tell right now. we still have decent gdp growth. we still have, you know, 3% plus unemployment. the economy is still growing. however, when you start seeing some of the stuff that came out of the administration this weekend, it's pretty clear that it's n

in the '30s, it was smoot holly that tried to restrict our trade.solationism, the whole america first movement in the 1930s. president trump has talked about america first and kind of withdrawing from our responsibilities in the world. we know what happened in the 1930s with hitler and moussolini and world war ii. i guess my question is, are there these similarities today to what happened in the 1930s, and will history in some way repeat itself? >> wow. in the united states, i mean, there was in the 1930s, as you mentioned, intense anti-semitism. nazis holding rally in madison square garden. we had to go through that ordeal. i do worry that the danger is that we have a sleepy voting population, that we don't have enough civic engagement that allows -- i mean, in many ways, american life is much better now than in the 1930s. look how -- this is pre-lyndon johnson. native americans had no land rights whatsoever and were being abused. i'm not saying those problems still don't exist, but the good news is we've made a lot of progress since the 1930s. but

connell: smoot-hawley, that was a little bit more. i understand your point. that once you start down this road, it is hard to come out of it. there were a lot of warnings before we got into this trade dispute to say, let's learn from history in that regard, these trade wars are not easy to win. to your point yesterday was seen by many as something of an administration by the administration, china is not paying tariffs. they're paid by american importers. >> consumers. connell: the american import -- that was going to be my next point. they're paid by importers not all the time they have been passed along yet. two things could happen. eventually, the president said as much yesterday, could be passed along. or, the companies could eat that. that will cut into their profits which is not a great thing, right? >> in consumer technology world profits are very thin. consumers get a great deal. consumer prices will go up, they have to. business uncertainty, consumer uncertainty, they will be confused. tv sets, laptops, many on the list whether september or december,

these tariffs are nothing, nothing like the smoot-hawley tariffs during the depression.% levels that we all learned in economics class destroyed the economy and it's why we all heard tariffs are bad. this is a small percentage tariff on a small percentage of total consumer expenditures. it's ridiculous to talk about consumer pain or bringing things down. stuart: you are being objective. that's what we like. you are objective about the impact of these tariffs. that's good stuff. now, let's just suppose the prices did rise over the longer term. prices did rise. would americans, do you think, be prepared to pay more in the interest of confronting china? >> depends on how much more. i do think some product prices will rise. my point is it's just not a lot of total expenditures. some prices will have to rise when companies aren't able to mitigate the impact as most of them should be acting to do. i think the question is how much pains there. consumers right now are fully employed, they have good wages and they will spend money. listen, this is all background noise to the cons