The Myth of Herbert Hoover

ShackledNation

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Jun 16, 2011
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It has become a common misunderstanding that Herbert Hoover was a laissez-faire man and epitomized the failure of free market capitalism. Far from it, Hoover was the most interventionist president the US had ever known. FDR based much of his New Deal on Hoover's own New Deal.

Whenever anyone demands government be scaled back, taxes lowered, and spending decreased, people point to Hoover as evidence that these policies are utter failures. Unfortunately, Hoover's policies were so interventionist that FDR called him a socialist on the campaign trail. You heard me, FDR, the epitome of "big government", criticized Hoover for intervening too much.

Dispelling The Herbert Hoover Myth - CBS News

After the stock market crash of 1929, Hoover browbeat business leaders to keep wages and prices high. He invested heavily in public works projects. He pushed for an international moratorium on debts. He created the Reconstruction Finance Corporation, which later became a home for many of FDR's Brain Trusters. Hoover increased farm subsidies enormously.

In 1932, Hoover in effect repealed Calvin Coolidge's tax cuts, increasing the rates for the poorest taxpayers by more than 100 percent and hiking the top rate from 25 percent to 63 percent.

Also, who are the real Hoovers here? Obama is sympathetic to protectionism, as is his party. He says he will raise taxes on the top income earners, and if he's remotely honest about his spending ambitions, he will have to raise taxes on everybody else as well.

Wait, Herbert Hoover Wasn't a Libertarian? - Hit & Run : Reason Magazine
Hoover didn’t cut federal spending, he doubled it. He established the Reconstruction Finance Corporation. He propped up wages and prices. Indeed, he launched the New Deal.

Herbert Hoover's New Deal - Hit & Run : Reason Magazine
Far from being "unwilling to challenge the pillars of free-market capitalism," Hoover reacted to the Depression by promoting extensive government intervention. For example, he established the Reconstruction Finance Corporation, a new federal agency that gave massive loans and grants to banks, failing businesses and state and local governments—a policy similar to today's bailouts. He also supported (albeit reluctantly) the enactment of the Smoot-Hawley tariff, a protectionist measure intended to strengthen American businesses by shielding them from foreign competition. Furthermore, he sponsored a massive increase in federal spending on a variety of relief programs. Similar to today's Democratic Congress, Hoover sought to stimulate the economy by increasing federal funding for public works through the Emergency Relief and Construction Act.
What does "Emergency Relief and Construction Act" sound like to you? Not the Obama Stimulus, perhaps?

Speaking before the 1932 Republican Convention, Hoover boasted that he had rejected the "disastrous" option of doing "nothing" and instead had "met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic." In that same 1932 campaign, FDR even denounced Hoover for overspending and promised to enact a balanced budget.
FDR calling for a balanced budget seems ironic in retrospect.

I hope you all get the point. Hoover was by no means a free market man. He is in the same camp as all the other big government spenders today. Defenders of the stimulus point to Hoover as an example of failure and then pursue the exact same policies. Again, the famous mantra manifests itself: "Those who do not remember history are condemned to repeat it."

We Americans have been quite forgetful indeed. And the consequences will be disastrous.
 
I have been meaning to read that work of his, believe it or not. Rothbard has more intelligent things to say about economics than anyone in recent times.

Here is a great speech by him pointing out the fact the Federal Reserve was a creation pushed by the bankers, not by far sighted and enlightened government bureaucrats.

[ame=http://www.youtube.com/watch?v=Ta7q1amDAN4]YouTube - ‪The Founding of the Federal Reserve | Murray N. Rothbard‬‏[/ame]
 
No Herbert Hoover thread would be complete without a Hawley-Smoot Tariff shout-out.

As brain-dead as our Congress is, they haven't seen fit to fall into a protectionist frenzy as they did in 1930. The effect of Hawley-Smoot were massive retaliatory measures by foreign nations, and this when the US was as export-reliant as China is today.
 
The Hoover administration, equipped with belief that the cycles of prosperity and contraction were a natural phenomenon, could not have anticipated the seriousness of the Great Depression. The change in the structure of the American economy was its natural evolution. Even the courts prevented most attempts of policy makers to engage in regulation that may have prevented collapse, or at least kept the problem from becoming so pervasive. The depth of the economic collapse could not have been envisioned, nor did the tools exist to fix it had policy makers recognized it. The entrenched nature of laissez-faire economic policy prevented any such action. These factors left the Hoover administration ill equipped to deal with the Great Depression. Even with his vast experience, Herbert Hoover was doomed to failure.

Read more at Suite101: Herbert Hoover's Legacy: Great Depression Goat Inherited Laissez-Faire Economic Policy | Suite101.com Herbert Hoover's Legacy: Great Depression Goat Inherited Laissez-Faire Economic Policy | Suite101.com
 
I have been meaning to read that work of his, believe it or not. Rothbard has more intelligent things to say about economics than anyone in recent times.

Here is a great speech by him pointing out the fact the Federal Reserve was a creation pushed by the bankers, not by far sighted and enlightened government bureaucrats.

[ame=http://www.youtube.com/watch?v=Ta7q1amDAN4]YouTube - ‪The Founding of the Federal Reserve | Murray N. Rothbard‬‏[/ame]
I have read articles on mises.org discussing the creation of the Federal Reserve. It is shocking that people ignore the issue and pretend like it is for our own good. Why would the largest bankers favor a central regulating bank? Because it was a deal for them at the expense of everyone else.
 
The federal spending levels of 1930 and 1931 were about the same. Federal Spending as a percentage of GDP went from 2% to 4% since there was no GDP anymore.

Herbert Hoover was Quaker and resorted first to individualist, volunteer measures post 1929. Anything else came afterwards, reluctantly, and with insufficient magnitude.

Hoover was a bad idea. But truly enough, Laissez-Faire does not exist. Economies rely on arithmetic, and courts are used to enforce the computing rules that are in place. Usually that is contract, but is a direct government interference in the market. In Exodus 22::25-27, for example--ARM's were shown a long time ago to be a bad idea. Interest rates are not supposed to be charged on loans to the poor. The rich get the different treatement, they get the tax hikes, and the interest rates on the loans.

Just review that paragraph, and (1) Laissez-Faire is not what the Bible is about, and (2) laissez-faire is not what government, has ever been about. Government tends to be supportive, more of the rich: For example.

Catholics have the famous crucifixion art, "Jesus Comments Unfavorably On The Laws of Moses!" in the churches and depictions. The New Testament, however, is also rife with zero expectations of repayments of loans to the poor, which are to be encouraged.

Then it is back to the courts, and the lack of laissez-faire. That is not the way it works at all.

Finally, but 1936, Keynes and not Hoover came up with a stronger suggestion of major government intervention in times of downturn. That goes back to the Testaments, but is reliant on more modern math.

Now, None of what you just read posted can ever be discussed in any U. S. national schools whatsever--on their permanent records. That has been the case for 37 years.

There is no laissez-faire! Even Herbert Hoover cannot be so-accused: Or even Presbyterians. Mormons can be. Smart is not a long suit, with some people. Vishnu actually is not too red-hot on Western Materialism either--unless it is electronic music.

"Crow, James Crow: Shaken, Not Stirred!"
(Teaching is clearly not possible at any grade level, without the doctoral degree, unless it is believed that some kids are better than other kids, and that all the other kids are not worth the extra effort! Clearly, there is no such thing as Laissez-Faire!)
 
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lol

Revisionist history is revisionist.

I like how the first article is disguised as being from CBS. When in reality it's merely CBS reprinting a Jonah Goldberg article. Because when I think objective journalism, I think Jonah Goldberg. :lol:
 
lol

Revisionist history is revisionist.

I like how the first article is disguised as being from CBS. When in reality it's merely CBS reprinting a Jonah Goldberg article. Because when I think objective journalism, I think Jonah Goldberg. :lol:
Johnah Goldberg isn't the only one reminding Americans of this historical fact. Care to refute the data?
 
lol

Revisionist history is revisionist.

I like how the first article is disguised as being from CBS. When in reality it's merely CBS reprinting a Jonah Goldberg article. Because when I think objective journalism, I think Jonah Goldberg. :lol:
Johnah Goldberg isn't the only one reminding Americans of this historical fact. Care to refute the data?

There is no data to refute. Hoover ran budget deficits of 1% up until 1931, which were smaller than any budget put forward by W or Reagan. Government spending was, what, 12% of the economy, a third of what it is today? Companies routinely ignored his price setting as they often lacked teeth.

Austrian economics has some very valid points, but it is a religion amongst its adherents, not a discipline.
 
Bank deposits contracted by a third under Hoover. Currency in circulation collapsed. He did little to stem the bank runs. In the midst of one of the sharpest contractions, the Fed increased the Fed funds rate from 1.5% to 3.5% in 1931 to stem the outflow of gold as Britain went off the gold standard.

Yeah, and Hoover's interventionist policies caused the Depression. :thup:
 
A fellow, Murray-Something gets cited about Herbert Hoover's lack of Laissez-Faire beliefs, based on two paragraphs from a self-describing--Quakers Do Not Do Self-Serving--speech in 1932. Then he launches into 1921.

Herbert Hoover's Depression by Murray N. Rothbard

Mainly, laissez-faire does not exist.

"Crow, James Crow: Shaken, Not Stirred!"
(Penn Quakers even worked with original indigenous peoples. Others intervened--in military uniforms--and shot them to death: Decade, after decade, after decade.)
 
I like how the first article is disguised as being from CBS. When in reality it's merely CBS reprinting a Jonah Goldberg article. Because when I think objective journalism, I think Jonah Goldberg. :lol:
Johnah Goldberg isn't the only one reminding Americans of this historical fact. Care to refute the data?

There is no data to refute. Hoover ran budget deficits of 1% up until 1931, which were smaller than any budget put forward by W or Reagan. Government spending was, what, 12% of the economy, a third of what it is today? Companies routinely ignored his price setting as they often lacked teeth.

Austrian economics has some very valid points, but it is a religion amongst its adherents, not a discipline.

What?

Hoover did have small deficits, but he rapidly increased spending and taxes along with it. Meanwhile, people persist in publishing nonsense about Hoover's record.

Those days of the 1970s are now nearly 40 years in the past. And this morning's jobs report makes me wonder whether, as a political system, we ever learn anything. Even this basic thing: That when tens of millions of people cannot find work because of an overall "failure of demand" -- not enough paychecks going to not enough people who can not make enough payments to create jobs for enough other people -- the main problem facing the nation is not "runaway government spending." Any more than it was when Herbert Hoover tightened up on spending as markets crashed, in the wave of folly that Keynes and Ahamed in their different ways chronicled. A lot has changed since the 1930s, and the 1970s. But not this basic principle.

federalgreatdepressionspending.png


Look at that graph. But yeah, Hoover didn't spend enough to stimulate demand. :cuckoo:
 
I like how the first article is disguised as being from CBS. When in reality it's merely CBS reprinting a Jonah Goldberg article. Because when I think objective journalism, I think Jonah Goldberg. :lol:
Johnah Goldberg isn't the only one reminding Americans of this historical fact. Care to refute the data?

There is no data to refute. Hoover ran budget deficits of 1% up until 1931, which were smaller than any budget put forward by W or Reagan. Government spending was, what, 12% of the economy, a third of what it is today? Companies routinely ignored his price setting as they often lacked teeth.

Austrian economics has some very valid points, but it is a religion amongst its adherents, not a discipline.
I am not talking about Austrian economics, or if Hoover was right or wrong, or what he should have done. The issue I am discussing is the philosophy of Herbert Hoover. And his philosophy was big government. That is my premise.

The key thing to look at here is Herbert Hoover and FDR. Government spending under FDR was also less than today, but does that mean FDR was laissez faire? Of course not.

1. Hoover doubled government spending as percent of GDP.
http://www.usgovernmentspending.com/us_20th_century_chart.html
In 1929, the first year of Hoover's term, spending as percent of GDP was 11%. By 1932, Hoover's last year, spending was 21%. In a period of 4 years, Hoover doubled government spending. That is a massive increase given how low it was before. In 1933, spending was 22%. Throughout the rest of FDR's prewar reign as President, spending as % of GDP was LESS than Herbert Hoover's spending levels in 1932. FDR sure was a laissez-faire man!

And that is soley on the issue of government spending. As I quoted earlier, Speaking before the 1932 Republican Convention, Hoover boasted that he had rejected the "disastrous" option of doing "nothing." The "do nothing" president? Really? It simply isn't true. And the sources I listed have many other references to the data you for some reason said is nonexistent.

2. Hoover doubled federal debt as percentage of GDP.
http://www.usgovernmentspending.com...-state_H0-local_H0-fed&year=1900_2016&units=p
Here, to ensure I am not overestimating, I am using only federal debt, not local and state debt. In 1929, federal debt as percentage of GDP was 16%. By 1932, it was 33%, more than doubled.

Where exactly are you getting the data that hoover was a "laissez-faire" "do nothing" "small government" president? IMO he was one of the worst in history because he was just the opposite.

3. Hoover enacted the largest peacetime tax increase in US history.
http://en.wikipedia.org/wiki/Revenue_Act_of_1932
http://blog.heritage.org/2010/10/20/hoover-fdr-and-clinton-tax-increases-a-brief-historical-lesson/
Its called the Revenue Act of 1932, a progressive tax measure that laid the foundation for progressive income taxation.
*The estate tax was doubled.
*The rate on the top income tax bracket was raised from 25% to 63%, more than doubled
*The rate on the lowest income tax bracket was quadrupled from 1.1% to 4%.
*Overall, corporate taxes were raised 15%

Revenue from the individual income tax dropped from $834 million in 1931 to $427 million in 1932 and $353 million in 1933.

In conclusion, Herbert Hoover doubled federal debt, doubled government spending, and massively increased taxes. Good luck defending his image as "the do nothing president."
 
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The budget outlays in 1930 were $3.3 bil. In 1931 the budget outlays were $3.6 bil. In 1932 the budget outlays were $4.7 bil. In 1934 the budget outlays were $4.6 bil. In 1935 the budget outlays were $6.5 bil.

Budgets doubling happened in the New Deal, not in the post-1929 Hoover Administration. The percentage of GDP doubled. GDP was going the way of the whirlies in the toilets.

"Crow, James Crow: Shaken, Not Stirred!"
(Many scalps cleaned in Whirlies(?)! Hmmm!)
 

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