Evidence shows that “austerity” during a sharp downturn in 1920 coincided with quick economic recovery and robust growth throughout the rest of the decade. Nevertheless, there is a belief that the example of President Herbert Hoover from 1929–1933 was a failure of austerity, which pushed the economy into the Great Depression. It was not. Hoover never cut spending or slashed tax rates. In fact, Hoover doubled spending in real terms during his four years in office. When FDR arrived at the White House, according to Cato economist Steven Horowitz, FDR’s …
Remember the Great Depression of the 1920s? If not, that’s because it didn’t happen. The recession of the early ‘20s quickly ended after spending and taxes were cut dramatically. It provides a clear lesson in “austerity” that President Obama should heed. In 1920, newly elected President Warren Harding inherited a very sharp downturn from his predecessor, Woodrow Wilson. According to Cato economist Jim Powell, the downturn was “almost as severe, from peak to trough, as the Great Contraction from 1929 to 1933 that FDR would later inherit. The estimated gross …
The University of California at Los Angeles reports: Pro-labor policies pushed by President Herbert Hoover after the stock market crash of 1929 accounted for close to two-thirds of the drop in the nation’s gross domestic product over the two years that followed, causing what might otherwise have been a bad recession to slip into the Great Depression, a UCLA economist concludes in a new study. “These findings suggest that the recession was three times worse — at a minimum — than it would otherwise have been, because of Hoover,” said …
Herbert Hoover was no laissez-faire president like Calvin Coolidge, however he did respect the constitution, and he never was willing to go as far as Franklin Roosevelt. He made a speech just before Roosevelt’s election to a third term, in which he made some salient points—ones we would still be wise to consider today. With Hitler, Mussolini and Stalin in power, and with a myriad of other dictators and authoritarian powers sprinkled across Europe, it was critical that the free citizens of America see the danger of handing over the …
The House votes today on legislation which would dramatically increase federal involvement in the realm of volunteerism, continuing the trend toward an America in which “public service” means working for the government. This is a topic which has been of particular interest to a certain president, who said, “Our people have in recent years developed a new-found capacity for cooperation among themselves to effect high purposes in public welfare. […] The government should assist and encourage these movements of collective self-help by itself cooperating with them.” He added that without …
The Wall Street Journal editorial page looks at recent liberal efforts to attack conservative economic policy as a Herbert Hoover “Let the economy sink” approach and responds: To hear [Sen. Chuck] Schumer and his fellow-traveling columnists tell it, Hoover’s great policy blunder was to do nothing, all the while insisting that everything was fine. But the problem with Hoover’s economic policy isn’t that it was passive but that it was actively destructive. In 1930, he signed the Smoot-Hawley Tariff Act, setting off a wave of protectionist retaliation that undid the …
