excerpts from the WSJ articles on Hoover

From the essay by Russell Roberts....

People ask me if the current mess feels like 1929. But the right comparison is 1932, when Herbert Hoover was desperately trying anything, anything at all, to get the economy going. The stock market had crashed. The economy was starting to follow it down. So what did Hoover and his fellow policy makers do?

In 1930, Congress passed a massive tariff increase, in hopes of protecting American jobs. Hoover signed it. But it simply accelerated the economy's slide. The Federal Reserve contracted the money supply, taking a recession and making it into a depression. By 1932, real GDP was 25% lower than three years earlier.

Hoover increased federal spending steadily, including an increase in real terms of about 40% in 1932. At the same time, fearful that deficits were harmful, Hoover raised income taxes.

Nothing worked. So Franklin Roosevelt came into office pledging stronger medicine. Enter even bigger increases in government spending. Government nationalization. Bigger deficits. Destruction of crops and livestock in the name of raising prices. Government-organized cartels. A greater empowerment of unions. It was a whirlwind of activity without any real plan....

Today, President George W. Bush plays the role of Hoover, the so-called free market ideologue who is trying anything to avert disaster. He signs a $700 billion bill putting Treasury in charge of buying troubled assets. A week later, the money is used to partially nationalize the banks. Some companies, like Bear Stearns, are bailed out. Others, like Lehman Brothers, are not. Some companies are sold. Some are allowed to fail. There is no plan, no rules, nothing to count on.

It's just like the New Deal: a massive accumulation of power in Washington justified by the need to do something. There is every reason to think this trend will accelerate...

A recession is coming (or has already arrived) no matter what happens in Washington. The question is whether the attempt to forestall it is going to make it worse and turn it into another Great Depression.

By acting without rhyme or reason, politicians have destroyed the rules of the game. There is no reason to invest, no reason to take risk, no reason to be prudent, no reason to look for buyers if your firm is failing. Everything is up in the air and as a result, the only prudent policy is to wait and see what the government will do next. The frenetic efforts of FDR had the same impact: Net investment was negative through much of the 1930s....

From the front-page article on Hoover fans by Louise Radnofsky...

Hoover is "the most misunderstood and the most underappreciated president," Mr. Jeansonne says.

That's got a lot to do with the fact that Hoover's term coincided with the Crash of 1929. Many Americans blame him for the Great Depression that followed, believing that he put ideological loyalty to the free market ahead of trying to help people suffering from the downturn. As a result, disparaging references to Hoover are a negative economic indicator, tending to rise whenever markets falter and economies stumble....

The accusations also aren't true, say proponents of Hoover. They point to warnings Hoover gave during the 1920s that low interest rates risked triggering a stock-market crash. When it came, 11 months after he was elected president in 1928, Hoover created the Reconstruction Finance Corp. to push credit into banks, and arranged $300 million of loans to states to distribute aid.

And far from being a free-market stickler, Hoover instituted a public-works program that at the time was the largest ever, including the creation of 360 public buildings. The program prompted accusations from Franklin D. Roosevelt's camp during the 1932 election campaign that Hoover was "leading the country down the path to socialism."...

Hoover arrived in office as a popular secretary of commerce who had earned a reputation for decisiveness and competence handling Washington's response to the Mississippi River flood disaster of 1927, says Kendrick Clements, a retired University of South Carolina professor.

He also ran a successful food-relief program in Belgium during World War I, organized domestic food production in the U.S. between 1917 and 1918, oversaw famine aid to Russia in the early 1920s and directed more relief efforts in Europe after World War II.

"Hoover invented the ex-presidency," says George Nash, an independent scholar and author of a three-volume biography of Hoover, referring to his subject's work after leaving the White House. During that time, "people stopped personalizing the Great Depression and blaming it on Hoover."

Indeed, Hoover was voted one of Gallup's 10 most-admired American men in 10 separate years between 1948 and the end of his life in 1964. A New York Times obituary noted that his post-presidential career, which also included heading presidential commissions for Dwight Eisenhower and Harry S. Truman, "restored him in the affections of millions."

Soon after, however, the skepticism returned...

Insert your favorite Jimmy Carter joke here...