“That man has offered me unsolicited advice for six years, all of it bad.”
So said President Calvin Coolidge of Herbert Hoover, his Republican successor. Coolidge derided Hoover as “Wonderboy,” according to biographer Robert Sobel, “because he always seemed to want to change things.” Silent Cal, who presided over a legendary golden age of economic growth that featured unemployment levels dropped to the two’s and one percent range, had a dim view of what he saw as Hoover’s propensity for intervention in all manner of things, including the economy. Coolidge died two months before the 1933 inauguration of Franklin Roosevelt, depriving history of his thoughts on the super-interventionist policies of the New Deal, many of which began with Hoover.
The Obama era dawns well elected on the Hooveresque mantra of changing things. Of a back to the future re-creation of Hooverism and, of course, the New Deal. At the news of Barack Obama’s victory the stock market, an institution with a long memory, spent the next two days dropping 9.7%. According to Investors Business Daily it was the largest two-day drop since the market crash of October 1987.
“Wonderboy” is back, with Barack Obama reprising the role of Herbert Hoover.
Understandably, much attention is being paid to the fact that Obama is America’s first black president. This is, without doubt, a proud and good moment for the country. It surely deserves a “well done” for getting past race. So too does the winner deserve a congratulations, Mr. President.
Yet in the end, the idea that Obama is the first black chief executive will soon fade in importance with the understanding he is very much America’s 44th president. In a country that will have 220 years of presidential history behind it on January 20th, 2009, the new man inherits a wealth of presidential precedents that teach what works and what doesn’t. Teachings that clearly conflict with the modern precepts of Obama’s liberal political faith, a faith that upon examination is really nothing more than 1930s style politics.
The Coolidge-Hoover split underlines the point. Nominally both conservatives, the two in reality had very different approaches to the economy. Not for nothing did Ronald Reagan have Coolidge’s portrait hung in the Cabinet Room. As economic historian Amity Shlaes thoroughly documents in her useful book The Forgotten Man: A New History of the Great Depression, it is well past time for another look at what has been the fundamental view of the economic turmoil that began with the stock market crash of October, 1929 — eight months after Hoover succeeded Coolidge. Its relevance as the Obama administration begins to unfold amidst economic havoc frequently being compared to the Great Depression cannot be underestimated.
Hoover was an interventionist by nature, a trait Coolidge disdained, particularly when it came to the economy. As part of the liberal interpretation of the period, Hoover is always pictured as a dour devotee of “individualism.” In fact, the only president other than Jimmy Carter (hmmm ) to come from an engineering background was, as Coolidge well knew, a champion of the idea of government intervention. Engineering the economy (Hoover was also mocked as “the Great Engineer”) was but one of his preoccupations. Hoover’s obsession, unsurprisingly, reminds of nothing so much as the 1990s Democrats manipulation of Fannie Mae and Freddie Mac, in the name of supplying millions with “affordable housing.” Like Hoover, they were heedless of the dramatically negative consequences of their engineering.
Indeed, the recent sight of President-elect Obama stepping in front of reporters for his first post-election press conference backed by a small horde of summoned “economic advisors” is nothing if not Hooveresque. Ranging from the recession-inducing Governor of Michigan Jennifer Granholm to one-time Bush SEC chair William Donaldson (labeled by the Wall Street Journal editorial page as “a case study in feckless regulation,” the team and Obama’s emphasis on his consultations with them recalls Hoover’s whirlwind activity in the days following the 1929 crash. In Hoover’s case he feverishly consulted with everyone from the heads of Ford (Henry Ford himself) to Sears to the U.S. Chamber. Far from issuing lectures on individualism, Hoover repeatedly intervened in the economy in a fashion Obama seems determined to emulate.
SEVENTY-NINE YEARS distant from the 1929 kick-off of the Great Depression, it is increasingly apparent that the policies of both Hoover and FDR failed to derail the economic chaos that repeated intervention in the economy brought about in both the United States and the world. In the case of FDR, his efforts backfired further in 1937, causing yet another depression-within-the-Great Depression. Contrary to liberal myth generated by liberal historians, the Depression never was ended until World War II put an end to the trauma that began on Hoover’s watch. Yet consciously or not, Obama has already signaled his consideration of Hoover and FDR’s favorites, policies that we now know to have failed when they weren’t busy making things worse.
From protectionism to a war on business to raising taxes to massive public spending that sucks up capital to the creation of make-work jobs for political purposes, Obama has in one form or another given the nod to them all. In particular, history records that Hoover’s support of the Smoot-Hawley tariff bill and the 1932 Revenue Bill, which jacked taxes from 25% to 63%, proved disastrous.
Conservatives in particular should take note that the liberals of the 1930s not only sought to pin the blame for the Depression on capitalism gone wild, they insisted on prosecutions, particularly of utilities mogul Samuel Insull. Insull was acquitted, but the tone was set. One has to wonder whether the Obama Justice Department will be seeking to something along these lines for the same reason FDR did this — to detract attention from the reality that the New Deal wasn’t working in its stated goal of ending the Depression. It should be a priority for re-grouping Republicans to demand investigations of Fannie Mae and Freddie Mac, if for no other reason than to educate the public that we are where we are because of government — not capitalism — gone wild.
Once past the warm glow of Inauguration Day, busily implementing policies that have a notable historical record of failure, Obama faces the same problem as Herbert Hoover. Which is to say that a failure to act correctly courts a curt dismissal as yet another failed president. Another “Wonderboy” gone wrong. A man who, in the words of Coolidge, offered nothing but bad advice and then, installed in the Oval Office on his own, turned bad advice into bad policy.
Could Barack Obama turn out to be a replay of Herbert Hoover?
Yes he can.
