Economics

Wait, Herbert Hoover Wasn't a Libertarian?

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As Brian Doherty discussed earlier this week, The Atlantic's Joshua Green just published a long profile of Rep. Ron Paul entitled "The Tea Party's Brain." Cato Institute Executive Vice President David Boaz also took a close look at the piece and caught Green making a pretty embarrassing factual error about President Herbert Hoover's response to the Great Depression. First, here's the offending passage from Green:

Herbert Hoover's Treasury secretary, Andrew Mellon, offered similar counsel, famously urging Hoover to "liquidate" and "purge the rottenness out of the system." But this failed to stop the catastrophe.

Now watch as Boaz walks Green through some American history 101:

Here's a general rule: Absolutely nothing that a treasury secretary says to a president will affect the real economy if the president ignores his advice and does something else.

Hoover didn't cut federal spending, he doubled it. He established the Reconstruction Finance Corporation. He propped up wages and prices. Indeed, he launched the New Deal. And Green is right: In the face of these policies, Mellon's memos to Hoover failed to stop the catastrophe.

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  1. Not only that, but the only source of that quote in the first place is in Hoover’s own diary. And not only was he not describing what his policy goals were, he was describing the alternative to his own interventionist policies.

  2. Damn those pesky facts! How dare they get in the way of my meme!

    1. Hey, if the facts don’t fit your narrative, make some up.

      1. It is funny because it is true.. the progressives have so rewritten the history of the depression? that we are now repeating it….

  3. Hoover didn’t cut federal spending, he doubled it. He established the Reconstruction Finance Corporation. He propped up wages and prices. Indeed, he launched the New Deal. And Green is right: In the face of these policies, Mellon’s memos to Hoover failed to stop the catastrophe.

    One of the most often cited myths of history is that Herbert Hoover was a laissez faire advocate and that his inaction made the depresion great. The facts are the exact opposite: Hoover was far from a free-market advocate, he was an interventionist and a believer in “stimulus” spending. He believed that “deflation” was a great evil that had to be fought at any cost – which he did, at a great cost to Americans.

    1. “One of the most often cited myths of history is that Herbert Hoover was a laissez faire advocate and that his inaction made the depresion great. ”

      That notion was ginned up by leftist lovers of FDR. They had to create a phony contrast between Hoover and FDR to further the narrative that FDR inteventionism is what “saved” the country for the “free market” under Hoover.

      1. A shitty Democrat’s followers making up BS to differentiate his policies from the similar policies advocated by his shitty Republican predecessor? Unheard of!

      2. Woodrow Wilson’s reputation improved during the FDR Administration, too… because many of the people who worked for Wilson worked for FDR.

        Wilson was incredibly unpopular at the end of his Administration — Harding, a dark horse candidate, won in a landslide.

        1. Yes, but everyone knows according to Received High School History it’s more important to emphasize how awfully smart Oba..I mean, Ker..no, Wilson was and how abysmally stupid Bu..I mean, Rea..uh, Harding was. You know, since personal qualities affect the state of the nation far more than policy preferences ever could…

    2. Hoover was an engineer. He loved to tinker.

      1. That makes him a pretty shitty engineer.

        1. He was actually a really good engineer, it’s that he made the classical engineering mistake of thinking he could systematize an economy that is filled with human being that steadfastly resist such systemazation.

          1. Darn humans just won’t keep acting the same when I change things! What’s wrong?

  4. I believe this line of thinking can be classified as “This is what I want history to be like, there for history must be like that.”

    Cogito hoc, ergo hoc sum esse.

  5. Someone at The Atlantic making a serious historical error? That’s un-possible!

  6. One of the most often cited myths of history is that Herbert Hoover was a laissez faire advocate and that his inaction made the depresion great.

    “Bush’s libertarian/Nazi market fundamentalism caused the Depression That Lasts Forever, and necessitated the Crackacide” is going to beat it.

    1. Probably the worst mistake W made during his tenure was not telling Paulson to calm the fuck down and get the hell out of his office.

      1. +999999999999999

      2. I don’t think Bush considers that a “mistake”. He liked to bailout failed business models. See the airlines after 9/11 for a previous example.

        1. I think the federal government owed the airlines compensation for the time they were forcibly grounded, but after that, as far as I’m concerned, terrorism and its effects are just the cost of doing business in that industry. If they didn’t plan for them…sorry, not my problem.

          1. Not your problem – assuming your not on a plane when those pesky Lutheran fundamentalists decide to go to Jesus and take you with them

        2. Just for info, not only were the airlines grounded, they lost the right to carry a lot of mail for the post office. It is not well known, but a lot of the airline’s profit comes from carrying this freight in the belly of their aircraft. After 9/11, no package over 1 pound could be carried on a passenger aircraft (for fear it might be a bomb) This cost the airlines a lot of cash, making it even harder for them to make a profit

  7. What sucks is that Hoover was in the Coolidge administration as the commerce secretary no less.

    He really should have been as libertarian as Coolidge if not more so.

    1. Hoover was really popular for his relief work during WWI and his support of the war effort after the US entered the war. He ran for President in 1920 but withdraw after losing the California primary (his home state) and then campaigned for Harding who rewarded him with the Secretary of Commerce position after his win.

      After Harding’s death, Coolidge kept Hoover on, mostly on account of his general popularity.

      Coolidge should have known better — Hoover denounced lassiez faire in 1922, but then again, Hoover should have known better given the Harding-Coolidge economy.

      1. Hoover may have lived in California, but his home state was Iowa. How do I know? I was born there too, and we learned it in school. Hoover was the only president born in Iowa.

    2. Coolidge inherited Hoover from Harding, and – as I recall – was compelled to keep him by the party hacks, though Cal couldn’t stand the man. (“For six years that man has given me unsolicited advice?all of it bad.”)

  8. It’s a shame that Andrew Mellon was unable to save us from the Great Depression. If only he had been able to purge those rotten people from the system! Maybe they could have made shantytowns and waited for the system to recover, or something.

    1. Note that “people” was your own addition. What is it with you guys and purges, huh?

      1. Of course Mellon meant people. He wanted all the people who weren’t profitable to fail, and be removed from the system. This, supposedly, would lead to what was left being profitable.

        1. So failing to prop up a business by looting more successful businesses is equivalent to “purging” in your fucked up worldview. Got it. If dipshits like you had their way, 95% of the population would still be subsistence farmers. You fear change more than conservatives.

          1. Should be “purging people”.

          2. You fear change more than conservatives.

            Obviously, they are the true reactionaries. They invented ‘too big to fail’ after all.

          3. I was pointing out what “purge the rottenness from the system” means. Your accusation about looting businesses means something to you but nothing to me. Unless you think the mere existence of government is an affront to businesses, which is idiotic.

            1. I was pointing out what “purge the rottenness from the system” means.

              Of course that is what you were doing sugawoogums. It’s just amazing how everyone else uses the term one way for several decades in relation to malinvestment, and then you come along and discover it has an altogether more sinister meaning that shows what heartless bastards people you don’t like are that they are just not willing to accept. Why wont people accept your premises!

        2. No, you ignorant slut.

          He wanted the unprofitable firms to fial, so that their assets and employees could be snapped up by guys who were actually producing things that people wanted to consume.

        3. atheist|10.15.10 @ 6:37PM|#
          “Of course Mellon meant people. He wanted all the people who weren’t profitable to fail, and be removed from the system.”
          Uh, ‘people’ are either profitable or not?

          1. Of course. Who do you think is working in the economy, androids?

            1. atheist|10.15.10 @ 8:02PM|#
              “Of course. Who do you think is working in the economy, androids?”

              Spoof or ignoramus; you decide.

        4. What does that even mean? It’s strange to use the word “profitable” to describe people, instead of actions or relationships.

          Businesses should fail and be removed from the system, but a business is an institution, an organized set of legal and social relationships governing a group of people. People are not removed from the system when businesses fail, they just have a different context within it. The only way to remove people from the US economy would be exile or death, and that is certainly not what was meant by that passage — it was referring systemic dysfunction, which referred not only to institutions themselves, but also the price distortions, broken incentives, and malinvestments that were disrupting the economy.

          1. The reality is, businesses are run by people. If businesses fail the people in them lose and suffer. To deny this is a form of magical thinking.

            1. atheist|10.15.10 @ 8:28PM|#
              “The reality is, businesses are run by people. If businesses fail the people in them lose and suffer. To deny this is a form of magical thinking.”

              Answer: Ignoramus
              Uh, yes, when a business fails, some people suffer economic difficulties.
              And?

              1. Answer: Ignoramus
                Uh, yes, when a business fails, some people suffer economic difficulties.
                And?

                If the right people are in charge and given command of the economy than there need not be any suffering.

                1. And who cares about the kulaks anyway, right?

                  1. Our problem was that we were making profits.

                2. Right people in charge? Command of the economy? Leaving aside your poor spelling, you sound a bit like Pol Pot.

              2. He’s just trying to tell us he pines for the days when everybody was a subsistence farmer and nobody ever lost their job. So, atheist, when can we expect you to open a buggy whip factory for all of the poor people displaced by the advent of the automobile.

                1. Give the buggy-whip makers a break, already. The ones who knew how to retrench, and stayed with their trade confidently, have done extremely well. Priced a buggy whip lately? And when buggies were in everyday use, the common folk like our atheist here were against them, too. They were the tool of The Man.

            2. Little boy economics. He makes his teachers so happy!

              1. Aunt Jemima|10.15.10 @ 8:34PM|#
                Little boy economics. He makes his teachers so happy!”

                Is it worth a try?
                Atheist,
                Businesses are formed when one or more people decide they can make/sell something in the market. They use “capital” to establish the business (hence “capitalism”), pay the workers and attempt to be successful.
                Most aren’t; few businesses last for more than, oh, 5-10 years. Those involved when they fail then either try again or go to work for a successful business. The assets are also sold to others who might do better.
                The ones that do prosper provide sustenance (and taxes) for the world.
                The only alternative has been tried and found wanting; responsible for tens of millions of deaths, murder, starvation and outright terror.
                So, we accept the difficulties and applaud the successes, since utopia isn’t an option, and the alternative is so monstrously horrible.

                1. Is it worth a try?

                  You wont get through to him because he likely comes from an environment where simplistic appeals to ‘compassion’ are successfully put others on the defensive (academia, public employee, or a really shitty MBA necropolis of a corporate envirnonment), but there might be other people reading who can be swayed.

                  1. Take out the ‘are’ there, I shortened that sentence but didn’t delete the full phrase.

                2. Your description of starting businesses is fine as far as it goes. But your focus on entrepreurial activity, which is generally done by people who can afford to try and fail, ignores the larger picture. That picture includes all the people who can’t afford to fail, but will anyhow; the institutions whose failure will devastate entire local economies; the entire classes of people who are cut off from employment in a downturn, and left to rot.

                  Your statement about utopia is strange to me, because your libertarian ideology is just another kind of utopianism, akin to Maoism or the beliefs of the Religious Right. Libertarian ideology, through its strategic alliance with the conservative movement, has been adopted by the US government in certain key ways over the past couple of decades. These have led to the economic crisis we’re in now.

                  The statements made on this blog show that the commenters want to go much further, and if this push has success it will cause just as much human damage as Mao Tse-Tung’s worst ideas. Instead of saying, “those people in the camps were anti-revolutionary gansters”, you will say, “those homeless people were just parasites on society”, or “those people should never have built their city there anyway”.

                  1. atheist|10.16.10 @ 7:43AM|#
                    “Your description of starting businesses is fine as far as it goes. But your focus on entrepreurial… blaah, blaah, blaah… all the people who can’t afford to fail, but will anyhow; …blaah, blaah, blaah…who are cut off from employment in a downturn, and left to rot.”
                    Right. “Can’t afford to fail”. What in the world is that supposed to mean? Are you idiotic enough to presume a society where failure doesn’t occur? What is that society?

                    “Your statement about utopia is strange to me, because your libertarian ideology is just another kind of utopianism, akin to Maoism or the beliefs of the Religious Right.”
                    Which shows your knowledge of libertarianism to be, well, in the range of total ignorance.

                    “The statements made on this blog show that the commenters want to go much further, and if this push has success it will cause just as much human damage as Mao Tse-Tung’s worst ideas. Instead of saying, “those people in the camps were anti-revolutionary gansters”, you will say, “those homeless people were just parasites on society”, or “those people should never have built their city there anyway”.”
                    Unsupported lefty horseshit, borne of true ignorance.
                    Hey, you’re hitting a thousand!
                    Hint: learn about something before you display your ignorance by posting about it.

                    1. “Can’t afford to fail”. What in the world is that supposed to mean? Are you idiotic enough to presume a society where failure doesn’t occur?

                      Of course, “can’t afford to fail” means exactly what you would think it means: a person who really needs their income. Whether that’s because they have dependents, or a mortgage, or for whatever reason.

                      No, I don’t presume a society where failure can’t occur. I do want a situation where people think about the effects of failure with some degree of empathy.

                    2. atheist|10.16.10 @ 12:21PM|#
                      “I do want a situation where people think about the effects of failure with some degree of empathy.”
                      So you really don’t have any solutions, but you’re satisfied with feel-good warm and fuzzies?
                      Consider your problem solved!

                    3. Notice how atheist dragged out the tired old “utopian” meme, which is odd because liberals have the true tired old utopian meme as their central belief pivot point.

                    4. I am starting a new business. What I am going to do is take a shit in a brown paper bag and sell it for $1000. I need my business to succeed so I can pay my success. If I can’t be profitable just because no one wants to buy my shitbags, will atheist subsidize me?

                    5. I am starting a new business. What I am going to do is take a shit in a brown paper bag and sell it for $1000. I need my business to succeed so I can pay my success. If I can’t be profitable just because no one wants to buy my shitbags, will atheist subsidize me?

                      He ought to. You’d think he would at least subsidize your producing more models of himself.

                      Of course, there’s already a company that does this…

                  2. The statements made on this blog show that the commenters want to go much further, and if this push has success it will cause just as much human damage as Mao Tse-Tung’s worst ideas. Instead of saying, “those people in the camps were anti-revolutionary gansters”, you will say, “those homeless people were just parasites on society”, or “those people should never have built their city there anyway”.

                    So, Libertarians caused Katrina, and if not stopped we’ll cause a genocide too! Lol!!! You must understand, this guy isn’t a troll. He is so disconnected to anything more than the most insular of liberal cultures, he believes this shit.

                    You did not hear any mention of deregulation until the Fall of ’08 because no one has made any serious attempts at deregulation since the Carter years, but then the Newspeak people decided that was the culprit for the meltdown, these fools like atheist sopped it up without taking a moment to ask what really happened.

                    Changes in corporate structure as carried out by the Clinton administration to make American banks more competitive and on line with European banking practices had nothing to with it. In fact, damage (that came from the bursting of the easy money housing market bubble) was slightly mitigated as a result of the farsighted policies of Rubin and Clinton. Damage was greatly mitigated for European banks where modern banking is more consistently practiced (i.e. no answering to Barney Frank, and a wall of separation from Europe’s own publicly elected goons).

                    They did not call these policy changes deregulation because that would have been inaccurate. The burden of regulation has been a non stop cancerous growth from the 1930s onward with a minor set back in its metastasis for a short period in the late ’70s. Did Democrats push through deregulation in the late seventies because they suddenly became libertarian? No. Good God, no they didn’t. The fact of the matter, previous regulation, banking regulation, had so frozen our economy that in 1975, only a palpable 10 million dollars in net return occurred through venture capital. From 1974 to 78 the average number of new IPO’s was 28 (you can find the charts here http://www.google.com/search?q…..al+markets

                    Democrats in the 1970’s had to tend to the crises of capitalism caused by previous generations of regulation and its accumulative burden. Democrats of 2010 are so divorced from reality, I doubt it is possible no matter the damage your policies cause (actual policies enacted not the imaginary libertarian genocide in your head, twit), you will be able to divorce yourself from your useless belief system.

                    Of course, in libtard la la land the parasite is the doctor and the host is the disease.

                  3. You’re unfair to leave out Mao’s best ideas.

                  4. Libertarian posters may say and claim a lot of idiotic things and make a lot of shit-ass remarks; but mass-murder and concentration camps are things used by savage tribal leaders, military dictators, and lovable Marxist rulers (some might want to throw Republicans and Democrats in there, too, but that would be a bad fit) — things that shit-headed libertarian fucks universally oppose. So, I call a bullshit on your last paragraph.

                    And another partial bullshit in your first paragraph. If you’ve ever been to Detroit, you know that unions (I blame their leadership), Big Auto and the hardly-libertarian local and state authorities share the responsibility for the devastation of those particular local economies.

                    While I’m at it, libertarian utopianism — is there such a creature? — akin to Maoism? Lord love a duck if it walks like one.

                    You did trick me into trying to defend libertarians.

            3. If businesses fail the people in them lose and suffer. To deny this is a form of magical thinking.

              Yes,
              It is much better to tax the successful to subsidize the failing because if we didn’t the people in those failing businesses would move to successful businesses and we certainly don’t want that.

        5. Atheism is not necessarily with necromancy, but shouldn’t you provide a little evidence that you’re actually channeling Mellon before presuming to speak in his name?

    2. It’s awesome seeing a leftist attempt to navigate through history that he can neither comprehend nor bend to his misbegotten precepts. Little boy need some syrup with those waffles?

    3. Thank goodness we had the glorious Hoover and Roosevelt Administrations who saw to it that economy recovered quickly and no shantytowns were built to wait while the economy recovered.

    4. Obvious troll is obvious.

      1. Choney? That you?

  9. In school they told me Hoover did nothing and FDR saved us. Are you telling me my teachers were lying?

    They also taught us about a living Constitution.

    1. Dyin’ ain’t much of a livin’.

    2. Bwa ha ha ha ha! We lied!

  10. In other shocking news … Obama’s mom was kind of a libertarian.

    http://www.nytimes.com/2009/08/11/opinion/11dove.html?_r=1
    Based on these observations, Dr. Soetoro concluded that underdevelopment in these communities resulted from a scarcity of capital, the allocation of which was a matter of politics, not culture. Antipoverty programs that ignored this reality had the potential, perversely, of exacerbating inequality because they would only reinforce the power of elites. As she wrote in her dissertation, “many government programs inadvertently foster stratification by channeling resources through village officials,” who then used the money to further strengthen their own status.

    These same observations also led her to start working with institutions like the Ford Foundation and the United States Agency for International Development to devise alternate pathways for reaching and working with the poor. She helped to pioneer microcredit programs that made small amounts of capital available to weavers, blacksmiths and other low-income groups ? people who would otherwise have had no access to credit.

    1. Too bad none of that “libertarian” rubbed off on her son

      1. I suspect that her son has never read, and does not understand, his mother’s research.

        1. Barack is the village official.

  11. This is why libertarianism is such a hard sell (though it seems to be coming around)…

    We have a century of made-up bullshit history to fight

  12. Economics Teacher: In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the… Anyone? Anyone?… the Great Depression, passed the… Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?… raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone?

  13. Actually, I believe Hoover was something of a libertarian, at least before he took office. He had often expressed the opinion that government should keep hands off on various situations and various countries. But when he was elected he lost heart and was swayed by the demands of politicians and constituents for “ACTION” and did what he had previously argued against.

    1. It’s probably more accurate to say that his ego got the best of him, thanks to all the accolades he recieved in the press during the 1920s, and he thought he could step in, manage things with a wave of his hand, and things would work out as they always did.

      It’s amazing that he both forgot the lessons of Harding AND served as a foreshadowing of Obama in one fell swoop.

    2. Sorry, but this is pure BS.

      Hoover got a hard-on for centrally planned economies during World War I, when he was part of the U.S. government’s apparatus for directing the economy.

      He ws one of the major voices for keeping the wartime controls in place during peacetime.

  14. You have to keep it in context. To the State-fuckers these days, anyone who isn’t a total State-fucker like themselves looks like a “libertarian” by comparison.

      1. Oh, how………………….
        infantile.
        Does your mama have your snakuums ready for you soon? Does she know you look up words like that on her computer?
        Go away, asshole.

      2. Infantile and offensive . Bravo

        1. S/he’s actually worse than that.
          It takes a true brain-dead to presume any great support for Bush on this site; this is just an ignorant kid whose buddy read part of the first chapter of Atlas Shrugged and figured that was a good grounding in libertarianism.
          And then to admit s/he has absolutely no alternative other than wanting “a situation where people think about the effects of failure with some degree of empathy.”
          IOWs, the standard-issue lefty blow-off of actual results, and a silly self-righteous embrace of intent.
          This is a serious lefty like Palin is a serious conservative; shallow end of the gene-pool.

          1. Don’t mention it; stupidity is its own reward.

  15. I like The Atlantic, but Josh Green is unreadable. Most of the other bloggers try to at least keep some outgoing myth of objectivity (other than Sullivan), while Green reads like some hack from The Nation or Media Matters.

  16. Have I mentioned lately that I flew with Herbert Hoover?

  17. Did you know he was the first POTUS to have been on TV?

  18. I love the smell of roasted ignoramus in the morning.

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