Hoover the Activist

Once again, the myth that Hoover did nothing in response to the Great Depression is rearing its ugly head.  Matt Yglesias refers to a "neo-Hooverite spending freeze."  Frank Stephenson rightly responds by quoting Amity Shlaes on Hoover's immediate reaction in 1929, which was to spend on public works.  He then mentions a slide from an IHS talk I did in Atlanta in March showing Hoover's later spending.  Here's the substance of that slide, which is the set of policies known as "Hoover's New Deal," including the Revenue Act of 1932, which was the largest peacetime tax in US history at that point.

On 12/8/31, Hoover goes to Congress and proposes:
    Reconstruction Finance Corporation - use tax dollars to lend to various credit agencies
    More discounting at the Fed
    Home Loan Bank – RFC for housing industry
    More aid to federal land banks
    Public Works Administration
    Restrictions on immigration
    Weaken competition in natural resource use
    Loans to states
    Ease bankruptcy laws

Revenue Act of 1932:  largest peacetime tax increase in US history to that point

Hardly a spending freeze, I'd say.

F

Comments

[liberty]

It would also be useful to compare to the prior stock crash, when Harding/Coolidge did DO NOTHING, and the mild recession was short and shallow.

We should not allow people to rewrite the history and claim that Hoover's do-nothing-ism led to the GD which FDR got us out of, when the actual do-nothing president avoided the GD that Hoover and FDR created in the next downturn.

People are so romantic that they actually love a president for presiding over a disaster--because they remember him fondly for being there with them during hard times. They cannot see the president that prevented disaster, because it never happened. In a way, its another case of What is Seen and What is Not Seen.

[Mario Rizzo]

According to official sources, Federal outlays in the fiscal year ending 1933 were 72% higher than in the fiscal year ending 1930.

http://www.whitehouse.gov/omb/budget/fy2008/pdf/hist.pdf

[Greg Ransom]

Matt Yglesias isn't an honest guy.

The historical facts don't matter to this kind of leftist.

Somehow the dishonest leftist type has now become the overwhelming majority.

I know there have always been dishonest people on the left, but it seems to me that the dishonesty thing is way up over the last generation or two on the left.

It's like the sincere, naive, honest "liberal" of the past is a thing of the past.

[Greg Ransom]

"liberty" has a point.

We need to take control of the language.

A "do nothing" policy would be a neo-Harding policy -- one that worked.

[Greg Ransom]

The left has been lying about this since the 1930s, haven't they?

[Bob Murphy]

I have posted the below link a 1000 times since this Hoover stuff came up. It is the gift that keeps on giving. (If you click the link, just be careful with the years the authors associate with each president. There are defensible reasons for their categorization, but a Keynesian might suspect foul play if you're not careful.)

http://www.presidency.ucsb.edu/data/budget.php

[joebloe]

Bob, I assume you are talking about the misplacing of 1934 in the Hoover column. It is where the Roosevelt administration increased spending by 41%. It isn't until 1938 that the budget was balanced, unfortunatly, that was when unemployment rose again sharply after 3 years of decline.
Such a simple error is quite likely to be viewed as a distortion of facts that someone would like to ignore.