Did Big Government Pull Us Out of the Great Depression? A core element of the Democrats’ world-view is wholly false. Robert Spencer
https://www.frontpagemag.com/fpm-plus/did-big-government-pull-us-out-of-the-great-depression/
The conventional wisdom is that the Great Depression that began in October 1929 was the fault of Calvin Coolidge, Herbert Hoover, and Republicans in general. Big business was out of control, and big government should have reined it in with regulations that would have prevented the crash from happening in the first place. Herbert Hoover’s disastrous presidency (1929-1933) is generally presented as evidence of this: most establishment historians echo the charge that Franklin D. Roosevelt and the Democrats began making in 1932, that Hoover’s inaction and trust in the power of the economy to right itself only deepened the crisis and lengthened the Depression. Then Roosevelt’s New Deal smorgasbord of government programs put Americans back to work and finally provided the economy the stimulus it needed to recover.
Virtually every aspect of that conventional wisdom is false. As Rating America’s Presidents shows, if Coolidge had been president in October 1929, he would have without any doubt followed the precedent established by Van Buren, Grant, Cleveland, and Theodore Roosevelt that Hoover explicitly rejected in his memoirs: do nothing, recognizing that economic relief was not the federal government’s responsibility, and let market forces heal the economy. What Hoover doesn’t mention is that in all four of those earlier cases, the president’s policy worked, and the economy eventually righted itself, although in some cases it took longer to do so than some would have liked.
In contrast, Hoover and then Roosevelt oversaw the massive expansion of the federal government in response to the Great Depression, and it became the longest-lasting economic crisis in American history, not definitively ending until 1941. Government intervention didn’t end the Depression; it prolonged it. Hoover’s programs only added to the burden ordinary Americans had to carry, especially when he increased taxes in 1932. The tax increases were unavoidable, however: contrary to the assumptions of many Americans today, big government programs don’t magically pay for themselves.
President Hoover’s programs didn’t accomplish anything, either. They didn’t prevent banks from going out of business: over five thousand closed between 1929 and 1932. Hoover’s programs didn’t put Americans back to work: unemployment rose from 3.3 percent in 1929 to nearly 25 percent in 1933. Many of the unemployed lost their homes; they began camping out and establishing shanty towns in large cities—these came to be known as “Hoovervilles.”
When Hoover called in the military to disperse the Bonus Army, a gathering of veterans who were camping in Washington and asking for economic relief, Hoover’s popularity fell lower than ever. A joke circulated that Hoover asked someone for a nickel so that he could call a friend. “Here’s a dime,” the man told the president. “Call both of them.”
The popular perception that Hoover was responsible for the Depression was largely correct, but his failure was in doing too much, not in not doing enough. Yet after resoundingly defeating Hoover in 1932, Roosevelt didn’t reverse his predecessor’s policies; he continued and expanded them. Raymond Moley, a charter member of FDR’s “Brain Trust” of key advisors aiding him to develop the New Deal, recounted that “when we all burst into Washington after the inauguration, we found every essential idea enacted in the 100-day Congress [the Roosevelt administration’s first flurry of activity to end the Depression] in the Hoover Administration itself.” Another member of the “Brain Trust,” Rexford Tugwell, noted that, in his policies, Roosevelt bore an “amazing resemblance to Hoover” and observed that “practically the whole New Deal was extrapolated from programs that Hoover started.”
Hoover, meanwhile, became a vociferous critic of the Roosevelt administration and grew increasingly disenchanted with the power of the massive federal government apparatus that he had done so much to create. His repentance, however, was not total. In February 1939, nearly six years after leaving office, Hoover boasted that the Republicans, not the Democrats, pioneered big government: “It was the Republican Party that first established the concept that business must be regulated by government if the freedom of men was to be preserved. Indeed, it was the Republican Party that first initiated regulation against monopoly and business abuse in the states. Over the last fifty years it created seven out of the ten great Federal regulating agencies of today. It was Republicans who created the income and estate taxes that fortunes might not accumulate so as to oppress the nation and that there might be relief of tax burdens upon the poor.”
On the other hand, during a 1928 campaign speech, Hoover said: “Bureaucracy is ever desirous of spreading its influence and its power. You cannot extend the mastery of the government over the daily working life of a people without at the same time making it the master of the people’s souls and thoughts.” Indeed. And it was he who started the ball rolling in that direction.
Comments are closed.
