Wednesday, December 06, 2006

Should historical examples come with expiration dates?

Or should that be a sell-by date or a half-life?

While the political antics of Ancient Greece may bear some resemblance to the modern world of politics, surely there are other factors that have changed so much that the comparison is nearly meaningless now.

At the very least, people who use historical examples to support their position concerning modern dilemmas should be forced to use all the examples from a period, not just the ones that back up their arguments.

If you're a free trader who also supports the privatization of Social Security, for example...

If you're gonna use the evils of the Smoot-Hawley Tariff Act of 1930 to rail against protectionism...

...shouldn't you also have to admit that investors who put their money in the stock market in 1929 saw their investment fall in value and they didn't break even for another35-40 years?

In other words...1930 era economic examples (if anything) teach us:

1. Tariffs are always bad.
2. Stock markets can have very long down periods.

If there are indeed some historic examples that have longer expiration dates that can you tell which ones have gone moldy and should be tossed out...

...and which ones are keepers?


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