The Myth of Herbert Hoover

[ShackledNation]

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.)

LOL! He is referring to the depression of 1921, not the Great Depression! That Depression has been coined by historians as the Forgotten Depression and is never talked about. Why? Because it was so swiftly resolved. What was the policy? Let the recession run its course.

 

[Toro]

OK, I see what you are getting at. I inferred too much.

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.
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!
*http://www.usgovernmentspending.com/us_20th_century_chart.html*

The reason why debt to GDP doubled was because GDP collapsed. Absolute spending only began to accelerate beyond trend in 1931.

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.
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.

If you want argue that he wasn't a strict doctrinaire laissez-faire President, like the sources you are quoting, I would agree. Hoover was under intense pressure to do something, which was evident by the complete destruction he incurred at the polls in 1932.

 

[ShackledNation]

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!)

Provide your source. Hoover was president from 1929 to 1932. It appears the 1934 FDR actually spent less than Hoover in his last year.

 

[Toro]

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!)

Provide your source. Hoover was president from 1929 to 1932. It appears the 1934 FDR actually spent less than Hoover in his last year.

Are you adjusting for deflation when you compare the numbers? The real numbers show that FDR spent more than Hoover.

 

[ShackledNation]

OK, I see what you are getting at. I inferred too much.

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.
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!
*http://www.usgovernmentspending.com/us_20th_century_chart.html*

The reason why debt to GDP doubled was because GDP collapsed. Absolute spending only began to accelerate beyond trend in 1931.

Hoover was president in 1931.
In 1928, before Hoover took office, total spending was 3.67 billion. (Government Spending in United States: Federal State Local 2011 - Charts Tables History)
In 1932, the last year of Hoover's term, it was 4.3 billion.

In 1924, spending levels were virtually the same as 1928, and were actually slightly higher.

Hoover's running made said he was leading the country down the path to socialism. FDR said he was overspending.

If you want argue that he wasn't a strict doctrinaire laissez-faire President, like the sources you are quoting, I would agree. Hoover was under intense pressure to do something, which was evident by the complete destruction he incurred at the polls in 1932.

Not only was he not a strict laissez-faire president as he is portrayed, he was the opposite. He was more interventionist than all the presidents before him. If Hoover would have preferred not to do something, it doesn't matter because he did. Hoover did not reduce government, he did not do nothing, and he did not lower taxes. He did the opposite. Politicians try to tell us otherwise, and they are dishonest liars.

 

[ShackledNation]

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!)

Provide your source. Hoover was president from 1929 to 1932. It appears the 1934 FDR actually spent less than Hoover in his last year.

Are you adjusting for deflation when you compare the numbers? The real numbers show that FDR spent more than Hoover.

I'm not sure if the source did or not.

 

[hellofromwarsaw]

Hoover was pretty good for a Pub- an engineer/humanitarian pragmatist- not a pandering to rich a-hole like all the others*


*Ike was an independant...

 

[Toro]

Provide your source. Hoover was president from 1929 to 1932. It appears the 1934 FDR actually spent less than Hoover in his last year.

Are you adjusting for deflation when you compare the numbers? The real numbers show that FDR spent more than Hoover.

I'm not sure if the source did or not.

The numbers are adjusted for changes in the price level. They are indexed to 2005 dollars.

 

[Avorysuds]

Good thread, I hope we can stop seeing Hoover and his small Government BS caused the great Depression. What made the Great Depression great was how long it lasted, and that was because of policies that prolonged it.

 

[8537]

"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."

Holy yousers! That's impressive in its incorrect interpretation of straightforward numbers.

 

[hellofromwarsaw]

"Good thread, I hope we can stop seeing Hoover and his small Government BS caused the great Depression. What made the Great Depression great was how long it lasted, and that was because of policies that prolonged it."

Horse patoot. It was how deep it was. Great idea for pubs, pandering to the rich as always, cutting tax rates on the rich to 25%, and allowing people to buy stocks on a margin of TEN per cent- quite a house of cards not rivalled till GW Boosh's "let's bundle toxic assets, call em good, insure them, and sell them around the world" scam of 2003-2007...next time the rich/poor gap and upward mobility got as bad again too....nothing to learn there...
If FDR had gotten in as quickly as Obama maybe he could have really stopped it...

 

[Toddsterpatriot]

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.

They were in favor of it because J.P. Morgan didn't have enough money to continue acting as lender of last resort.

 

[ShackledNation]

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.

YouTube - ‪The Founding of the Federal Reserve | Murray N. Rothbard‬‏

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.

They were in favor of it because J.P. Morgan didn't have enough money to continue acting as lender of last resort.

They were in favor of it because it would mean they could be subsidized by government at the expense of the tax payers. They were in favor of it because it largely removed the "loss" side of the "profit and loss" coin of free market capitalism.

 

[Toddsterpatriot]

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.

They were in favor of it because J.P. Morgan didn't have enough money to continue acting as lender of last resort.

They were in favor of it because it would mean they could be subsidized by government at the expense of the tax payers. They were in favor of it because it largely removed the "loss" side of the "profit and loss" coin of free market capitalism.

Subsidized by taxpayers? Please explain further.
Removed the loss side?
Is that what they did for Bear Stearns, Lehman, Countrywide, Wamu, Wachovia......?

 

[ShackledNation]

They were in favor of it because J.P. Morgan didn't have enough money to continue acting as lender of last resort.

They were in favor of it because it would mean they could be subsidized by government at the expense of the tax payers. They were in favor of it because it largely removed the "loss" side of the "profit and loss" coin of free market capitalism.

Subsidized by taxpayers? Please explain further.
Removed the loss side?
Is that what they did for Bear Stearns, Lehman, Countrywide, Wamu, Wachovia......?

Yes, subsidized. That is what lender of last resort means. If banks are in a pinch, the Federal Reserve will lend them whatever they need. Banks act irresponsibly, betting that they will be bailed out if they fail. And most of the time, they are. Bear Stearns was bailed out, as was much of wall street via TARP. Banks that do fail simply did not provide the government enough political incentive to save them. If government picks the winners, the winners will be those most in bed with government. The winners are those who are most corrupt.

 

[Toddsterpatriot]

They were in favor of it because it would mean they could be subsidized by government at the expense of the tax payers. They were in favor of it because it largely removed the "loss" side of the "profit and loss" coin of free market capitalism.

Subsidized by taxpayers? Please explain further.
Removed the loss side?
Is that what they did for Bear Stearns, Lehman, Countrywide, Wamu, Wachovia......?

Yes, subsidized. That is what lender of last resort means. If banks are in a pinch, the Federal Reserve will lend them whatever they need. Banks act irresponsibly, betting that they will be bailed out if they fail. And most of the time, they are. Bear Stearns was bailed out, as was much of wall street via TARP. Banks that do fail simply did not provide the government enough political incentive to save them. If government picks the winners, the winners will be those most in bed with government. The winners are those who are most corrupt.

How is that a taxpayer subsidy?
Bear Stearns wasn't bailed out, they're gone.
Poor Jimmy Cayne lost $1 billion.
Does he feel bailed out? LOL!
They were gone before TARP was even imagined.
Now if you want to talk about Fannie and Freddie, they were definitely subsidized by the taxpayer.

 

[auditor0007]

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 problem today is that the US is not export reliant. However, our exports are not nearly as high as they could be due to other countries using those same protectionist policies against us. China exports almost anything they want to the US, yet they make it nearly impossible for us to sell goods in China. I'm not real big on the idea of imposing massive tariffs on imported products, but maybe we need to rethink it a bit.

 

[mascale]

Bill Clinton Taxed The Rich after cutting taxes on the poor. The personal exemptions and standard deduction had been raised equal amounts, and indexed, in the 1986 Tax Reform of California Senator, Alan Gregg Cranston, not of the of Judd Gregg Republicans. Clinto would further provide a $500 per child tax credit. 22 million jobs would be created, and with fundining from taxes on the rich.

Bush would cut taxes on the rich, and nothing happened. Osama bin laden provided an excuse to expand federal procurement money for the the rich,like the Satanic Reagan deficits had done. Then bankers would ignore The Law of Moses on interest rates, and came up with Adjustable Rate Mortages instead: Prooving Republican contempt of the deith of Jesus Christ, and the West. The housing bubble was created, and then the mortage bankers got cast out into outer darkness, like had happened to the poor in foreclosure.

The Bill Clinton Administration had not been like that.

elkabong: Clinton raised taxes on the rich and created 22 million

Deity-acknowledged math can work, and is now working except in the Hoover-balanced-budget mantra, state and local government employment sector. That sector should have created 800,000 new jobs by now. Instead, the Republicans created a job-loss of 500,000 in that sector, with failed balanced budget policies in place.

Crow, James Crow: Shaken, Not Stirred!!"
(Great Spirit send many squaws instead, to Lands of Many Nations to feed one-armed bandits. Poor stay at home. Rich all come. Lands of Many Nations prosper, and with snappy non-negro dialect, gift ot Writer's Guild!)

 

[Patrick2]

Hoover's economic economic statism is not news to anyone who knows the history of that era - eg, he signed the smoot hawley tariffs bill that helped bring on the depression. His panicky interventionism formed the basis of FDR's New Deal.

 

[ShackledNation]

Subsidized by taxpayers? Please explain further.
Removed the loss side?
Is that what they did for Bear Stearns, Lehman, Countrywide, Wamu, Wachovia......?

Yes, subsidized. That is what lender of last resort means. If banks are in a pinch, the Federal Reserve will lend them whatever they need. Banks act irresponsibly, betting that they will be bailed out if they fail. And most of the time, they are. Bear Stearns was bailed out, as was much of wall street via TARP. Banks that do fail simply did not provide the government enough political incentive to save them. If government picks the winners, the winners will be those most in bed with government. The winners are those who are most corrupt.

How is that a taxpayer subsidy?
Bear Stearns wasn't bailed out, they're gone.
Poor Jimmy Cayne lost $1 billion.
Does he feel bailed out? LOL!
They were gone before TARP was even imagined.
Now if you want to talk about Fannie and Freddie, they were definitely subsidized by the taxpayer.

Bank failure results when banks pursue bad business practices. It occurs when they fail to make profit. Bank failure is the "loss" side of the proft-loss mechanism in a free market. The Federal Reserve was created to bail out failing banks, functioning as the lender of last resort. This is no hidden purpose, it is stated. The Federal Reserve subsidizes the failure of bad banks that are politically tied to Washington or the Fed.

Lender of last resort means subsidizer of banks that fail. The last resort in a free market is bankruptcy, not bailout.