July 29, 2008

Lessons from Herbert Hoover

If Barack Obama is elected president there's a good chance we'll see Hooverville's cropping up across this great land of ours after his policies throw us into another Great Depression.

The American Presidents, Ninth Edition documents that "No other President came to the White House with more dazzling visions of achievements and left with more shattered illusions than did Herbert Hoover." One of his promises was "the perfection of justice, whether in economic or social fields" and he intended his administration to be a "progressive, reform regime." That all sounds familiar, doesn't it?

Herbert Hoover is said to have been for small government and laissez-faire economics. It's too bad he didn't stick to his guns. He was called a "do nothing President". He tried a housing bailout which was a failure. His refusal to repeal Prohibition probably didn't help. Not only would people have gone to work at breweries and distilleries, but they would have been happier, not having to go to to the local speakeasy for a pop. But Herbert Hoover's biggest mistake was signing the Hawley-Smoot Tariff in 1930 which only intensified the depression. Time and again we find that free trade is a good thing and the imposition of tariffs is bad. Obama doesn't get this.

Unfortunately, President Bush seems to be falling into the Democrats' trap when they compare him to Hoover, accusing him of doing nothing. (For example the economic stimulus and homeowner bailout.) We will never know what would have happened had President Hoover, and later Roosevelt "done nothing". Perhaps the depression may have ended in 1934.

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