The Real Herbert Hoover Record

The Patriot Statesman ^ | 3-29-2011 | David Smith

[BillKneer]

With the after-effects of the so-called “Great Recession” still lingering — unemployment is still at close to 9%, even after the “stimulus” spending of nearly a trillion dollars (spending that was supposedly necessary to keep the unemployment rate below 8%), and economic growth is still sluggish — and the landslide election victories for Republicans in November 2010, there is now real debate around cutting government spending at the local, state, and federal level.

Predictably, such calls for fiscal discipline bring the inevitable references to President Herbert Hoover and his response to the stock market crash of 1929 and his response to what would become the Great Depression. According to the conventional narrative, it was Hoover’s supposed laissez faire inaction that was the catalyst for the economic malaise that consumed the United States for the next decade and a half. As is often the case, however, the conventional narrative departs from the truth: Hoover, far from the caricature, was not a free market, limited government advocate; rather, he fit in with the progressives of his day, seeing government as a tool for shaping a better world. He sought a much more aggressive, progressive, activist government than had been the hallmark of his predecessor Calvin Coolidge.

[BillKneer]

Sounds to me like the elected have not learned the lessons of the past are are dooming we the people to repeating them. The fasted growing part of our economy is NOT the governed it is the government.

[bobjam]

The Great Depression was actually a double-dip recession. The first dip was caused by declining demand for American farm and factory products. Europe, which was in shambles due to the war, could no longer consume our surplus. Prices here fell and farms & businesses began to fail. The local banks that fincanced them then began failing, and the economy crashed.

Herbert Hoover correctly understood the Great Depression as a global economic calamity. Without currency stabilization in the global market, international trade would not return and American factories would remain closed or understaffed. FDR ignored (or more likely did not understand) this and treated the Depression as a domestic issue. He approached unemployment by hiring people to do anything and everything his Administration could think of.

The massive increase of federal hiring in FDR’s first term produced a modest recovery. Workers had paychecks (albeit small ones) and thus had money to spend. FDR was reelected and decided that since the economy was recovering, he could cut spending and transition the work force to the private sector. When he cut many of his programs, the workers were not hired in the private sector. This was the “second dip”. FDR and his Administrators then realized that what they thoguht was “recovery” was actually a false recovery.

[BfloGuy]

The Depression was actually a burst financial bubble just like the current recession. The Federal Reserve had inflated wildly during the twenties -- as had the Europeans, most notably the British. The increased money supply had the usual consequences of rising commodity prices (followed by shortages) and investment in projects which couldn't support themselves under normal economic conditions.

When it all came apart, Hoover (who had always been somewhat of a neo-con in his belief that government intervention could accomplish wonderful things) took the ridiculous, but then stylish, economic advice that wages must remain high. He gathered together the leading tycoons of the day and convinced them not to cut wages.

As long as workers' wages remained high, the thinking went, consumption would be stabilized and the economy saved. Of prices for producer goods were dropping (as they must to recover from a recession). Low prices combined with high wages made a bad situation even worse.

FDR campaigned against Hoover's policies, but, once elected, kept them in place and added to them. Sound familiar?

[reed13]

“Forgotten Man” is the best on this subject. Detailed, factual history.

[Theodore R.]

The American people will always believe that Herbert Hoover “deliberately caused” the Great Depression. Hoover’s party paid for this failure in five consecutive presidential elections from 1932-1948.

[GATOR NAVY]

Hoover, far from the caricature, was not a free market, limited government advocate; rather, he fit in with the progressives of his day, seeing government as a tool for shaping a better world. He sought a much more aggressive, progressive, activist government than had been the hallmark of his predecessor Calvin Coolidge.

I recently read a book about the election of 1920. Hoover was idolized by both Wilson and FDR at the time for his relief work in Europe and the Democrats seriously courted him to run for president as a Democrat. And Hoover gave it serious consideration, but in the end decided to support the Republicans because he thought they had a better chance of winning the election, not because of any great ideological differences he had with the Democrats.

Calvin Coolidge had a poor opinion of Hoover, his nickname for Hoover was "Wonder Boy". Coolidge also said "For six years that man has given me unsolicited advice—all of it bad."

[bobjam]

FDR supported much of Hoover’s policies when he was Governor of New York. He couldn’t make the election of 1932 about policy, so he had to make it personal.

I have always believed that ultimately, World War I was the cause of the Great Depression. Since the last quarter of the 1800’s our farms and factories produced more than we could consume. The surplus was sold to Europe. After WWI, Europe was smashed. An entire generation of young men had been wiped out, nations were in deep debt (to us), governments and dynasties had fallen and the communists were on the move. Meanwhile our farms and factories continued full steam adter the war. We produced more and more while Europe consumed less and less. Factory goods piled up in warehouses and agricultural prices fell in accordance with the law of supply and demand. Farms failed and factories began to scale back production. Both led to unemployment.