Hoover = Bush and FDR = Obama?

It's odd that I had this thought the evening before the WSJ published an essay on this by Russell Roberts. Then, they followed up with a Tuesday front-page feature article on Hoover fans by Louise Radnofsky.

The funny thing is that if you've bought into the propaganda on Hoover and FDR, you would imagine that I mean this to be an insult of Bush because he did so little to deal with economic troubles-- and applause of FDR (and potentially, Obama) for fixing an economic mess.

If so, then alas, you don't know me, economics, or economic history very well.

Hoover has an undeserved reputation for being laissez-faire. In fact, he tried a wide and impressive array of govt interventions. His efforts do pale in comparison to FDR's, but Hoover cannot qualify, by any objective measure, as a do-nothing, free-market president. FDR mostly took Hoover's ideas and hooked them to steroids.

Likewise, FDR has an undeserved reputation as an economic guru. Instead, the New Deal can be potentially commended only in political terms-- the argument that if FDR had not done all this crazy stuff, then revolution and hard-core socialism would have resulted. I don't know enough about that argument to debate it. But as economic policy, it was clearly a short-term failure and its long-term ramifications have been amazingly costly. The latter is too long of a tangent to pursue here. As for the former, it suffices to say that unemployment in the 7th year of the New Deal was still 19%.

One other tidbit: there's an old saw that the Socialists in America have never been successful in an electoral sense. But their entire 1928 platform was put into law by FDR and his Congresses five years later.

Back to the possibilities of a contemporary comparison: For a long time, when teaching on the Great Depression, students have asked whether it was possible again. I've always said, "No, there's no way we'd repeat the series of bonehead policies that deepened and extended the Great Depression." Expansive fiscal policy (in the name of jobs and recovery), bad monetary policy, four tax increases, massive restrictions in international trade (Smoot-Hawley), a range of policies that strengthened unions, and wage/price controls. We've already had an amazing dose of the first and significant dabbling in the second. Today, we see calls for more of those two-- as well as the next three. Beyond that, there is now the potential to achieve this set of policies with the current political alignment (at least until blow-back in 2010)-- and most frightening, the public's potential willingness to go along with it (taking us beyond 2010).

What will happen-- and what will history say?

Stay tuned...