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Herbert Hoover Redux
independent.org — Herbert Hoover converted a mundane recession into the greatest economic disaster in modern history —the Great Depression. Unfortunately for all of us, George W. Bush is headed down that same path.
populist- 37 diggs
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- caferrell, on 10/14/2008, -0/+17FTA - In fact, Hoover did too much about the recession and things went downhill from there. Instead of letting wages, prices, and investment fall to restore equilibrium in the market, Hoover pushed businesses to keep wages and investment high, despite falling demand for their products. He created public works programs that also kept wages artificially high and signed a draconian hike in tariffs that declared economic warfare on the world. But most important, Hoover flooded the market with credit even though excessive increases in the money supply—mostly during predecessor Calvin Coolidge’s one-and-a-half terms—had created conditions in which businesses had been tricked into a sense of false prosperity and thus had undertaken excessive investment. The reduction of that bad investment had led to the recession in the first place. Now Hoover was trying to artificially pump up the economy, which made the inevitable economic malaise even more dire. FDR then came into office and continued Hoover’s government intervention into the marketplace on a massive scale. The market was never allowed to right itself until resources were returned from the public to the private sector after World War II ended; only then was prosperity restored.
Sound familiar? - sheeplescareme, on 10/14/2008, -0/+8FTA
"Today, Americans routinely expect politicians to make the economy’s ailments better and bail out businesses and citizens for bad economic decisions—an expectation created by Woodrow Wilson’s massive government meddling in the U.S. economy during World War I and Hoover’s and his successor Franklin Delano Roosevelt’s (FDR’s) interventions later on. Thus, in that spirit, the conventional wisdom nowadays is that too little was done by Hoover about the economic downturn until FDR saved the day with massive government intervention."
nanny state wisdom - roosevans, on 10/14/2008, -0/+6Lessons Learned From Hoover Administration:
Free market = good businesses and good investors prosper, bad businesses and bad investors fail with no government intervention.
Corporate welfare = government intervening to keep bad businesses and bad investors from failing.
Inevitable financial and economic crisis = corporate welfare. - cashman57, on 10/14/2008, -0/+6FDR chided Hoover for spending in deficit and then proceeded to spend more money than all of the previous presidents put together. Were it not for WW2 the depression would have continued.
- saustrabeck, on 10/14/2008, -0/+2What's sad is in my city, the public library is hosting this month-long evet commenorating "the legacy" of FDR. The timing is completely ironic, as it's been planned for months.
- hollering, on 10/14/2008, -0/+1I take issue with only one part of your comment -- "Were it not for WW2 the depression would have continued."
That might be true, but not because warfare spending saved us from the depression. My admittedly amateur take on it can be found on my blog here: http://erichollering.com/blog/?p=33
If you want to hear it from people smarter than me (which I would if I were you), check these out:
The Myth of Wartime Prosperity by Thomas Woods
http://www.fee.org/Publications/the-Freeman/articl ...
The Myth of War Prosperity -- audio by Robert Higgs
http://mises.org/MultiMedia/mp3/misescircle-housto ...
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