As I understand it, Hoover was preoccupied with maintaining a balanced federal budget through budget cuts and tax increases. That's the opposite of countercyclical spending, which along with some welfare state components made up the new deal. Maybe he was on board with the welfare state and the idea of people having high wages (who isn't?), but the government doesn't cut the majority of paychecks in the country, and those it does cut, he was, well, cutting. In regards to the Depression, he was pretty diametrically opposed to what the New Deal became.
You might have a book that says otherwise, but I've read several books that disagree with you. You've got a pretty high burden of proof to make that statement.
With all due respect that's because you haven't read more on the subject. Lord Keynes himself is quoted in Rothbard's book as approving of the United States government's response to the crisis. The notion that depressions are caused by a fall in aggregate demand is looking totally at the symptoms of the crisis and not the causes. Rothbard might be one person but he's not a minor figure in 20th century economics by any means. He's not really on the level of Hayek, Friedman, Keynes, or Mises in terms of influence but he's no joke either.
Hoover was the main force in the Harding administration to respond to the crisis of 1920-21 which Harding wisely ignored. The contraction in the economy was very severe but we recovered quickly and no one remembers it--except Austrian economists like Rothbard.
And considering the lengths Roosevelt was willing to go to I'm not surprised Hoover didn't like all of The New Deal. I'm not sure Hoover or anyone else saw the seizing of all gold coming. I'm not sure why history forgives him for that act of theft.
You were doing awesome until "seizing of all gold" -- obviously had a viewpoint but were giving credence to other viewpoints as well.. then that doozy. History forgives him because he ended the depression, won WWII and not everyone agrees with you about abolishing the gold standard being equivalent to quote "seizing of all gold".
Gold standard and gold seizure are two different things.
Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933 all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($166,640 if adjusted for inflation as of 2008) or up to ten years in prison, or both.
First, in 1933, at the height of the Great Depression, the U.S. Government, under the Gold Confiscation Act, confiscated gold money from its citizens and replaced it with paper Federal Reserve Notes. It became illegal for individuals to own gold, except for small quantities that coin collectors and dental practitioners could hold. This alone eliminated the public’s capacity to hold government inflation of the money supply in check; they could no longer redeem inflated paper money for gold.
I don't know when exactly it ended but I'm quite certain there was little time to continue experimenting with socialist schemes when one is under attack. Industry needed to be able to function in order to produce everything required to win.
And, yes, war is NOT good for the economy or anything else, other than repelling invaders. When all your shit's blown up, you ain't got shit.
I figure that without the wars of the 20th century, we'd all have twice as much wealth, if not more.
Well, yes and no. The position the US found itself in after WW2 was that all its rivals (Britain, Germany, Russia, Japan) had been devastated, and all its factories were fully intact and geared up for mass production. Not such a big leap from tanks to construction machinery, jeeps to cars, bombers to airliners. The Marshall plan was about kickstarting export markets, not altruism.
So on the one hand, you are right, war is a destroyer of wealth. But on the other hand, the US benefitted enormously from it. The net effect was to concentrate wealth that would have existed in territories of its rivals to it.
We are told the Marshall Plan worked wonders. But interestingly, two countries that were both enemies ended up with very successful economies. And both were bombed pretty hard at the end of the war.
Which makes me think that a nation's culture and the freedom its citizens have to take risks and benefit from doing so are more important than handouts. But you could probably guess I was already pretty biased in that direction.
Not to mention twice (or much more) as many people. Oscar Schindler saved over 1,100 Jews from death, and there's over 5,000 or 6,000 descendants of those survivors today. Can't remember the figures exactly, but it's a lot. And of course, with more people, markets are bigger, potential workforce is bigger, which leads to more wealth, which dovetails nicely with your point about wealth.
So there are several books that said the same thing about Hoover, but does that mean it is more likely that these historians are more accurate than the historians who provided a renegade viewpoint?
I have read another book that said that the early new deals program and regulatory framework were essentially made by insider players, who wrote the rulebooks to fit their business operations. Suddenly, you would have a few entrepreneurs and businessmen, jailed because they do a few things differently.
For example, from my fallible memory, a businessman who sold tires has to compete with Goodyear, who have locations around the country. In order for his business to survive, he must sell his tries cheaper than Goodyears does. However, he got fined because Goodyear wrote the regulation rules for the tire industry.
Which one is more likely in your opinion? The image of government programs being an entirely benevolent operation put forward by FDR, or political machines benefiting some people more than others, sometime at the expenses of one another?
If I got a job with the work progress administration, I might be inclined to vote for FDR because he gave me a job, not whether or not if the work progress administration benefit the economy.
Yeah, in absence of better proof provided, I'll stick with the opinion of the majority of historians.
The rest of your points haven't had anything to do with government finances or the attitudes of both presidents towards countercyclical spending vs balanced budgets. They seem like some blindly-applied-backwards-80-years modern republican simplifications about the nature of "government programs". Some dude got screwed by Goodyear at some point in history? Huh?
There's been a lot of scholarship on this topic. You've got to do better than that if you're going to make an overarching claim like in your original point.
Yeah, in absence of better proof provided, I'll stick with the opinion of the majority of historians.
What is your rationale for sticking with whatever the majority of historians said?
The rest of your points haven't had anything to do with government finances or the attitudes of both presidents towards countercyclical spending vs balanced budgets. They seem like some blindly-applied-backwards-80-years modern republican simplifications about the nature of "government programs". Some dude got screwed by Goodyear at some point in history? Huh?
Sorry about non-sequitur here. I was talking about the effects of FDR's New Deal programs and regulations, and Goodyear was just one data-points amongst many(presumably).
Even so, why you think mine is a Republican simplification of government programs?
Because, respectfully, the entire thought process displayed by your post seems to consist of "government = bad, therefore new deal = bad". It shows very little effort to understand what was actually happening, it boxes a huuuuuge range of possibilities into a simple black/white viewpoint, and it's a silly oversimplification that has high correlation with modern republicans.
As far as what the majority of historians said, if it's them or you, and you're not saying something very very persuasive, I'll tend to believe them. No offense intended.
> silly oversimplification that has high correlation with modern republicans
I tried to downvote your post because of this line, but I ended up mis-clicking and upvoting, so I might as well explain myself.
I am not a Republican, I am an independent. This holier-and-smarter-than-thou attitude that seems to be mestastisizing needs to stop. Please argue your point with facts and reason, not with a "it sympathizes with viewpoint [X] and is therefore invalid." Democrats, Republicans, Liberals, and Conservatives are all guilty of this, but here on the West Coast (where the Hacker News audience predominantly resides) there is a sort of reflexive superiority complex which seems to have developed especially acutely in those on the left side of the political spectrum, in which there is little hesitation, even outside of overtly political forums, to announce that certain views are wrong simply Republicans subscribe to them as well... And of course we all know that Republicans are all about the blunt-force, black-and-white simple-minded thinking, as opposed to subtle, sophisticated, and nuance-loving Democrats.
Sorry, I'll cut my rant off early. I hope my point got across without offending anyone.
And of course we all know that Republicans are all about the blunt-force, black-and-white simple-minded thinking, as opposed to subtle, sophisticated, and nuance-loving Democrats.
Repudiate the Tea Party, Palin, Beck, Limbaugh, et al., and we can talk.
His point, made through sarcasm, was that the perception of Republicans among thinking people is currently on the level of "recently-thawed Neanderthals." The modern-day GOP has justly earned this derision by pandering to the religious right.
It is well past time for the Big Tent to split, because I, for one, would like to be known as a conservative again.
I honestly hope that most "thinking people" look poorly upon fanatics of either party, but I hope you can concede that there are "thinking people" among both. The Democratic party just panders to different special-interest groups.
> As far as what the majority of historians said, if it's them or you, and you're not saying something very very persuasive, I'll tend to believe them.
Why?
The last time I looked, nothing about history was subject to "nature". If all historians agreed that Hitler had 7 arms and flew, nothing bad would happen.
If, on the other hand, engineers decided to act as if steel was less dense than air at 1 bar, things would go wrong.
If a false understanding of history is applied in foreign relations, then there are situations where unnecessary wars can be created.
If a false understanding of history is applied to military strategy, wars can be needlessly lost.
There was a reason that the government created and spent so much on the Ministry of Truth in Orwell's 1984. If you control people's understanding of history, you can have a big impact on what they do in the future.
That's true, but it doesn't generate feedback to bad historians.
For example, if a country gets into an unnecessary war because of bad history, the historians aren't penalized.
> There was a reason that the government created and spent so much on the Ministry of Truth in Orwell's 1984. If you control people's understanding of history, you can have a big impact on what they do in the future.
Bingo, and it's not just govt that tries to influence history to influence the future.
Note that there's nothing in here that encourages accuracy.
What is your rationale for sticking with whatever the majority of historians said?
If I may, when the majority of experts in a field all believe the same thing, it is referred to as consensus. The consensus of the experts in any well researched field tends to be, if not actually right, at the very least the best answer that can be arrived at with current information.
Of course, they are not always right, even in a field as well grounded as mathematics, the consensus has been wrong in the past (the consensus for a very long time was the Euclidean Geometry was the only possible geometry.....). But it is quite reasonable to demand that someone trying to say the consensus is wrong has a high bar to meet to establish that.
In general, the most reasonable thing for someone without the expertise or interest to carefully do an indpendent analysis of all available data is to believe the consensus. When someone does meet that high bar to show that the consensus is wrong, then in any reasonable academic field that consensus will change.
> As I understand it, Hoover was preoccupied with maintaining a balanced federal budget through budget cuts and tax increases.
You got it backwards. In fact FDR campaigned against Hoover's deficit spending.
Once in office, FDR reversed course and doubled-down on Hoover's approach.
Hoover and FDR shared a belief that excess production was the problem - that's why both pushed govt programs to restrict it. That's what put the "Great" in "Great Depression". (Previous panics didn't last nearly as long.) FDR didn't back off until the approaching WWII made it obvious that an "Arsenal of Democracy" had to actually produce massive amounts of stuff.
FWIW, Congressional Repubs at the time voted overwhelmingly for Social Security.
Yes, the debt went up. Tax revenues collapsed in this period, remember.
But Hoover was trying to balance the budget. He saw it as a goal, an end to itself that would reassure credit markets and do a bunch of good. FDR saw stimulating demand as more important in the short term. That's the difference between them. Hoover was raising taxes to try and balance the budget, and only increased government spending very slightly considering he had 25% unemployment. FDR threw it all to the wind for a few years and massively increased deficits as a deliberate policy.
Interesting stuff. It does seem to turn out that Hoover pushed less for balanced budgets than I thought, although there are lots of statements attributed to him around 1932 trying to balance the budget, the tax hikes, etc.
But I thought the difference was more clear-cut than that as far as their actions.
Still, I find it hard to justify the statement that "they had the same view in regards to counter-cyclical spending and balanced budgets" -- FDR championed crazy deficits to stimulate the economy for a decade, Hoover seems to have been trying to move towards a balanced budget after a brief round of stimulus.
According to Wikipedia (http://en.wikipedia.org/wiki/Herbert_Hoover#1932_campaign), there are statements attributed to FDR accusing Hoover of reckless spending and criticizing him for spending too much and putting too many people on the dole. There are a lot of statements attributed to Bush about humble foreign policy, limited government and deregulation, and statements attributed to Obama about how forcing people to buy insurance is a bad thing.
In general, I assume that a politicians views agree with what he does rather than the lies he tells to get elected.
Hoover signed into law drastic tax increases, e.g. Revenue Act of 1932.
He did attempt some spending programs near the end of his presidency which was also at a point where the depression was already around the point of its most extreme GDP contraction.
You could argue that was FDR did in terms of spending and bank reforms was similar to what Hoover started near the end of his presidency but orders of magnitude larger. In contrast debt/GDP actually remained neutral during the New Deal due to concurrent GDP expansion.
Hoover, a one-time business whiz and a would-be all-purpose social problem-solver in the Lee Iacocca mold, was a bowling ball looking for pins to scatter. He was a government activist fixated on the idea of running the country as an energetic CEO might run a giant corporation. It was Hoover, not Roosevelt, who initiated the practice of piling up big deficits to support huge public-works projects. After declining or holding steady through most of the 1920s, federal spending soared between 1929 and 1932 -- increasing by more than 50%, the biggest increase in federal spending ever recorded during peacetime.
It's deliberately misleading. "between 1929 and 1932" is a misleading way of saying "in 1932". Almost all of the deficit increase and public works spending occurred in 1932 (due to a single bill: the Emergency Relief and Construction Act) near the end of Hoover's presidency, but by saying "between 1929 and 1932" it makes it sound like it was a consistent policy throughout the downturn. In reality by that time in 1932 the depression was already near its worst lows and Hoover had tried keeping the budget balanced prior to that and only had a few months left in office.
As I understand it, Hoover was preoccupied with maintaining a balanced federal budget through budget cuts and tax increases. That's the opposite of countercyclical spending, which along with some welfare state components made up the new deal. Maybe he was on board with the welfare state and the idea of people having high wages (who isn't?), but the government doesn't cut the majority of paychecks in the country, and those it does cut, he was, well, cutting. In regards to the Depression, he was pretty diametrically opposed to what the New Deal became.
You might have a book that says otherwise, but I've read several books that disagree with you. You've got a pretty high burden of proof to make that statement.