Surprisingly, Brad DeLong comes to the same conclusion as I did way back in high school.
You know, for most of my life I have been viciously contemptuous of Herbert Hoover as president over 1929-1933. His major policy thrust was to cut spending and raise taxes in order to maintain and then restore confidence in the long-term fiscal stability of the U.S. government, and even a brief look at bond interest rates ought to have convinced him that that was exactly the wrong tack to take.
But even though that was the major thrust, he was doing other things to try to fight the gathering Great Depression–the Young Plan and the international debt moratorium to ease bond-market pressure on overleveraged sovereigns, the HOLC to deal with the mortgage crisis, the RTC to get capital to businesses that found that private finance’s appetite for taking on risk had dried up. These were all, in the great scheme of things, merely rearranging the deck chairs on the Titanic.
But at least Hoover was moving the chairs around…
I researched Herbert Hoover’s 1929-1933 Presidency and his efforts in attempting to stop the Great Depression. I ended up seeing Hoover in a tragic light because the consensus has become to vilify him; even with his splendid record as Secretary of Commerce in the 20s (there are streets named after Hoover in Europe for his efforts to get food and aid to the people after World War I), over his Presidency. I remember focusing more on his domestic structural policies but Brad DeLong adds even more positives to the side of Hoover. It’s a stark and woeful contrast to the state of the Fed, Congress, and European edifices of the past four years. The vicious cycle of forced austerity and ragged unemployment has none of the sense of moving chairs around that Hoover put into action.
Had the financial systems of the world done everything they could to alleviate the world’s contraction from the outset we could revel in moral splendor of reducing human suffering. But the mass of human suffering has proven to not be worth reducing. Now, the Fed has an incentive to not shoot a magic bullet to save the economy. Already facing widespread criticism they would be ridiculed, or much worse, if they someone install a fix. Hoover tried many avenues to throw off the dreadful economic malaise but at the moment any effective solution is hamstrung by a stubborn institution. He followed the lead of the economic giants and consensus of the time, something our leaders of the world seem to be utterly unable to do. It’s often said, and recently statistically chronicled that the leading class has become completely detached to the problems of those below them. It’s really hard to see that they, or at least part of the right, give a damn at all.
There seems to be a similarity in spirit to the presidency’s of Barack Obama and Herbert Hoover. It would be a huge surprise to me if the Republicans win the White House in 2012, that their President will be as successful as FDR.