Herbert Hoover, the last Progressive and the first new dealer.

“If government wishes to alleviate, rather than aggravate, a depression, its only valid course is laissez-faire—to leave the economy alone. Only if there is no interference, direct or threatened, with prices, wage rates, and business liquidation will the necessary adjustment proceed with smooth dispatch. Any propping up of shaky positions postpones liquidation and aggravates unsound conditions. Propping up wage rates creates mass unemployment, and bolstering prices perpetuates and creates unsold surpluses. Moreover, a drastic cut in the government budget—both in taxes and expenditures—will of itself speed adjustment by changing social choice toward more saving and investment relative to consumption. For government spending, whatever the label attached to it, is solely consumption; any cut in the budget therefore raises the investment–consumption ratio in the economy and allows more rapid validation of originally wasteful and loss-yielding projects. Hence, the proper injunction to government in a depression is cut the budget and leave the economy strictly alone.”

This is how Murray Rothbard starts Chapter 7 of his 1963 revisionist history, America's Great Depression.

to quickly clarify what I mean by "revisionist history." I don't mean fake history. I don't mean lies. I don't mean pseudo historiography, even though there is a certain type of revisionism that falls under this category.

To be a historical revisionist, in the simplest terms, is to look at the mainstream or most commonly held historical belief regarding a certain place or time period. This includes the facts and accounts of this time period that hold up the present historical narrative and zeitgeist.

An example of historical revisionism would be the narrative surrounding ‘‘New Qing history’’ of the 1990s, where many American and other Western sinophiles believed that the mainstream view that the Qing dynasty quickly integrated into mainstream Han society and culture was ultimately false, or at the very least, an oversimplification of history, as the Qing and the ruling dynasty retained many aspects of their previous nomadic Manchu culture.

Murray Rothbard attempted to do the same thing. He believed that the common idea that the Great Depression, and more so the reaction to the Great Depression that prolonged it, was not that the government didn't intervene in the economy quickly enough, but rather that they intervened too quickly and did too much.

Even today, most people generally believe and are taught in schools that the government's lack of action under the presidency of Herbert Hoover is what led to the worst depression in American history, and it was FDR's New Deal that revitalized the American economy. Both of these assertions are wildly untrue.

While much attention is given to FDR and the New Deal, both in his time and ours, little to no attention is actually given to the policies of Herbert Hoover. Many simply say, “He did nothing,” and many more believe that the reason for the depression was the lack of economic intervention and the lack of spending done by the previous Republican presidents, Harding and Coolidge. I remember when I was quite young, 14 I believe, my high school psychologist told me that every recession in the United States came after a long term of Republican rule, and that the reason the depressions happen is because they refuse to spend money in the economy. In my impressionable mind, I believed this liberal jargon.

But today, we'll also have a look at the Republican president, Herbert Hoover, in relation to the previous presidents and his eventual destruction of the American state, economy, and society—a destruction that still hurts us to this day.

Herbert Hoover, The Secretary of Commerce

My high school therapist's assertion that every depression came after a long term of Republican rule is easily debunked by the 1920 depression, which happened at the tail end of Democrat Woodrow Wilson's two-term presidency.

His assertion that depressions are caused by a lack of government interference in the economy is also swiftly debunked by the fact that the 1920 depression lasted only a year, and during that time, the government under newly elected Republican president Warren G. Harding allowed wage rates to fall—something that is unthinkable for modern governments—and also decreased government expenditures, which is also something unthinkable for modern governments.

The 1920 depression was, in the words of Austrian economist Benjamin Anderson, “our last natural recovery to full employment,” and “the last free market recession.”

But this recession was very close to becoming the first statist recession.

Harding's Secretary of Commerce, the wealthy Herbert Hoover, was pestering him to intervene in the economy throughout the entirety of the depression—something of which the president was eventually convinced of, right when the depression ended.

Now it's important to clarify something before going further: political parties, then as well as now, are far from being ideological monoliths. Especially back in the day, the two major political parties of the United States were very broad ideological coalitions, containing men with very different and contradictory beliefs within a singular party and within a singular cabinet of any given president. In an attempt to unify the party and stop any factionalization that may lead to a breakaway party, such as Theodore Roosevelt's Progressive Party in 1912, which spoiled the election and led to the election of Democrat Woodrow Wilson, presidents were forced to include men in their cabinet with whom they were ideologically and also personally opposed.

Warren G. Harding and his vice president and later successor Calvin Coolidge represented the strictly conservative wing of the Republican Party, while Herbert Hoover was a held out for the progressive faction, a.k.a. the statist economic interventionist faction of Theodore Roosevelt and William Howard Taft, the latter of whom introduced the dreaded income tax to America.

Also, something important to note about Hoover is that he was not officially associated with the Republican Party nor any official political party before 1920, even cooperating with President Woodrow Wilson.

Herbert Hoover would take up the mantle of Secretary of Commerce in March 1920, solely on the condition that he would be consulted on every economic matter the government would take.

One of these economic matters was the September 1921 “President's Conference on Economic Matters,” a conference held among some of the nation's most prominent business leaders. It was called by President Harding, but at the behest of Herbert Hoover.

It was a conference of over 300 of the most influential business leaders, labor leaders, and industrialists in America.

The topic was how to stop depressions, labor shortages, and general economic woes.

Warren G. Harding was the first to take the stage. The views he expressed were those of an old America, of an old American economy, of a laissez-faire free market that had brought America to the role of the number one economy in the entire world—known as the land of prosperity and opportunity.

Most presidents, particularly those who held the office during depressions, advocated for a free market approach with very little, if any, government intervention. This was a precedent set by Martin Van Buren, possibly one of the most underrated American presidents.

Harding attacked the notion of government planning and any idea of treasury relief.

There seemed to be very little enthusiasm among these men for Harding's traditionalist economic approach. They believed that government intervention in the economy, government subsidies, and control of wage rates were the way to go. They believed it was best for them and best for America. As stated in my previous essay, the Progressive Era shows that government intervention is, in fact, a great friend to business interests.

The man who took the stage next received roaring applause from the business and labor leaders: Secretary of Commerce Hoover, who advocated for further government intervention in the economy, control of wage rates, increased public works, and a rise in taxation.

This position was also held by previous President Woodrow Wilson, the man who created the Federal Reserve and got America involved in World War I, who later in December 1921 also called for government standardization and an increase in public works.

Speaking of Democrats, Hoover, throughout his term as Secretary of Commerce, was praised by many Democrats, including his later political enemies: 1928 presidential candidate Alfred Smith and the man who eventually usurped him as president, Franklin Delano Roosevelt.

Both were vehement supporters of Hoover's public works projects and the bills he supported in the Senate.

Now, something important to note about Hoover's tenure as Secretary of Commerce and Warren G. Harding's approach to his cabinet in general is that Harding was a very uninvolved president and allowed much individual agency among his cabinet members, most of whom he vehemently disagreed with on one issue or another. This can partly be explained by the fact that Harding didn't truly want to be President of the United States or believe he could be. His 1920 presidential campaign was primarily the result of his wife and the powerful men around him.

Harding's Secretary of State was 1916 presidential candidate Charles Evans Hughes, who, unlike Harding, was a vehement supporter of entry into World War I. Harding practically gave Hughes free rein over the office; his only condition was that the United States could not join the League of Nations.

Harding also gave practical free rein to the Secretary of Commerce, Hoover.

Throughout his tenure as Secretary of Commerce from 1921 to 1923, Hoover tried to persuade labor leaders to accept unemployment insurance. In 1925, when Calvin Coolidge was now president, he praised the Socialist Federation of Labor as having “exercised a powerful influence in stabilizing industry.”

Hoover's most notable achievement, if you could even call it that, during his tenure was his war against United Steel and its chairman, Elbert H. Gary.

Hoover and his supporters believed that United States Steel and the steel industry in general had “barbaric hours” and wished to cut their hours from 12 to 8 a day.

Hoover managed to convince the usually laissez-faire Harding in 1922 to call a conference of steel leaders and advocate for a cut in hours. One American biographer of Hoover said that he made the steel leaders “squirm.”

How much they actually squirmed is unknown to time, but this 1922 conference was far from the last time the steel industry and Hoover would clash.

During this time, there were many negotiations between the unions and the steel companies. They could never come to a conclusion, and the steel companies were vehemently against any cutting of hours. Historically, this would have been an issue between the workers, the unions, and the corporations. But Hoover would intervene, as he usually did. Hoover would “deliberately break the story” to the press of the unsuccessful private meeting between Gary, the president of U.S. Steel, and the union leaders. He also claimed to the press that the president was “attempting to persuade industry to adopt a reasonable working day.”

How true this story was, we cannot say due to the political maneuvering of the time and Harding's non-interventionist, laid-back attitude toward the presidency.

Hoover would also have the National Engineering Societies, something that was practically under his control, write a paper endorsing the 8-hour day.

United States Steel rejected the 8-hour workday, and they came under criticism from all political sides and organizations. However, we rarely hear their side of the story and their arguments, which included that workers preferred the 12-hour workday due to an increase in income; if they were to cut hours, steel production would generally be reduced.

But these arguments were swept aside by waves of emotionalism that have always been a poignant political force, especially after women got the right to vote.

Gary and other steel leaders stood firm with their assertions, despite near-constant criticism from labor organizations and even religious groups. But he and the steel industry itself eventually caved when President Harding wrote a letter to Gary at the behest of Hoover, and soon the 8-hour day would follow.

(Just a quick side note: I'm not making moral or economic arguments throughout this essay. I'm not saying it was “right” for Hoover to intervene in the economy so much and to strong-arm the corporations. I'm simply stating the facts as they are.)

Some other notable interventionist policies under Hoover's tenure as Secretary of Commerce included fostering the Railroad Labor Act of 1926, which was America’s first permanent incursion of the federal government into labor-management relations.

Hoover also vehemently advocated for higher wage rates and believed that the reason for America's prosperity during this time period was due to its high wage rates. What Hoover didn't understand was that prosperity was due to “real wage rates,” not inflated wage rates.

Hoover didn't understand that industrial output is what leads to real high wage rates and not the other way around. Hoover put the cart before the horse, to put it one way.

Hoover would go on to champion his theory at the Unemployment Conference of 1921, where business leaders advocated for lower wage rates as a cure for unemployment. But Hoover didn't listen to their common sense because he was a champion of the so-called “New Economists” (proto-Keynesians) and a harsh critic of the so-called “Old Economists” (laissez-faire capitalists and proponents of early Chicago and Austrian economic thought).

Hoover would be a champion of so-called high wage rates throughout both his tenure as Secretary of Commerce and later during his presidency. In 1926, he gave a speech that foreshadowed his disastrous presidency:

“Not so many years ago—the employer considered it was in his interest to use the opportunities of unemployment and immigration to lower wages irrespective of other considerations. The lowest wages and longest hours were then conceived as the means to obtain lowest production costs and largest profits. . . . But we are a long way on the road to new conceptions. The very essence of great production is high wages and low prices, because it depends upon a widening . . . consumption, only to be obtained from the purchasing power of high real wages and increased standards of living.”

Hoover's idealistic view of government intervention in the economy would soon lead to disaster when he assumed the presidency in 1929.

Presidency of Herbert Hoover.

By 1928, Republicans had been in office in the United States for eight years, despite a couple of hiccups in scandal, such as the Teapot Dome scandal. The country was in good shape, a very good shape, in fact the best shape it had ever been in there are no wars and the economy and prosperity were booming there were absolutely no reasons not to Republican candidate Herbert Hoover.

The 1928 Democratic candidate was Al Smith of New York, the first Catholic to become presidential candidate for a major party. And this was a time when anti Catholic sentiment was quite vehement in many parts of the United States and thus the election of 1928 was an absolute Republican landslide. They even won historically Democratic strongholds in the South, such as Virginia and North Carolina states had that had literally never voted republican before

Overtook the presidency in January 1929 and by the fall the stock market crash began and despite what many mainstream historians Such as David M. Kennedy, Robert H. Zieger,

And the most egregiously, the Terror of my youth. The torturer of my history class. The most wretched of historical propagandists, John green!! Who is a truly vile, vile abominable warm of a man.

Who in his propaganda on the Great Depression claimed that Hoover's lack of public work projects and economic investment economy is what led to an increase of the Great Depression this as you will see throughout this chapter couldn't be farther from the truth

Hoover Himself said in his 1937 Memoir On the topic of his role in the Great Depression.

“The primary question at once arose as to whether the President and the Federal government should undertake to investigate and remedy the evils. . . . No President before had ever believed that there was a governmental responsibility in such cases. No matter what the urging on previous occasions, Presidents steadfastly had maintained that the Federal government was apart from such eruptions . . . therefore, we had to pioneer a new field.”

Also, Hoover's admiring biographers. Said “President Hoover was the first President in our history to offer Federal leadership in mobilizing the economic resources of the people.”

Though not everyone in Hoover's administration felt the same way about economic intervention that he did. Hoover, like his predecessors, needed to contain factionalism within the Republican Party and needed to include men in their cabinet who they don't agree with politically nor personally

The cabinet member who Hoover disagreed with the most would probably be Secretary Treasurer Andrew Mellon, who'd also served as secretary to treasurer under previous presidents Hardin and Coolidge.

Hoover scorns scornfully called Melon, the head of the ‘’Leave it alone, liquidationists’’

Mellon advocated for minimal government intervention in the economy.To cut taxes and promote, Efficiency in industry, Which were all policies that The progressive Hoover was vehemently against.

Hoover immediately advocated for businesses raising wage rates, something which Henry Ford and a few other private businessmen did which saw no real, in real wages or unemployment.

Another action that wasn't officially under the sway of Hoover, but as I'm sure most people know.The Federal Reserve is far from being an independent government organization.Instead, works hand in hand with the federal government. The government then and now, simply.tries to keep arm's length from the federal reserve for purely political reasoning,

And the Federal Reserve, during the first week of the Depression, added over $150 million to its reserves and discounted another $200 million for federal banks.

If you need proof that this was a government decision, not an independent decision made by the governors of the Federal Reserve.it has been recorded by benjamin anderson that The lead in Federal Reserve heads want to pursue a laissez faire approach to the recession, Yet at the behest of Hoover, they intervened immensely which eventually led to conservative federal reserve head ROY young to resign in august 1930.

With the Federal Reserve spending money like a drunken sailor, Hoover And his allies seemed to believe that the stock market would soon recover in December.1929 he gave a speech to business leaders praising the actions of the Federal Reserve.

At this point in time, it was believed that many that this depression would soon come to an end with Hoover ally and president of the American Federation of Labor William Green saying.

All the factors which make for a quick and speedy industrial and economic recovery are present and evident. The Federal Reserve System is operating, serving as a barrier against financial demoralization. Within a few months industrial conditions will become normal, confidence and stabilization in industry and finance will be restored.

This supposed restoration of the economy due to The Federal Reserve, and just a concept of central bacon in general would, as we all know, not come to pass under the presidency of Hoover.

Who was accused by pseudo historian John Green in his YouTube video on the Great Depression of not foster in public works

This, of course, with all things John Green says Is untrue.

On November 23rd, 1929, Hoover sent a telegram to all US governors, including franklin D Roosevelt of New York Urgent for joint cooperation between the federal and state governments on an increase of public works.

Hoover also Proposed to Congress, a $400 million increase.(9 billion U.S. dollars today) To the Federal buildings program.

Though Congress thankfully shot down this proposal, Hoover did still spend money like a drunken sailor. Increasing government spending by 12% between 1929 and 1930, a total of A $400 million increase in spending. Between 1930 and 1931 government expenditures went up by 14% Over 500 million in 1931 U.S. dollars. in 1932 Hoover introduced the dreaded Revenue Act.

Which saw The single largest tax increases in American history,

Top income tax rates increased from 25% to 63% for those making 6000 or more.

Corporate, Tax rates were increased From 12% to 13.75 Percent,

Estate tax raised from 20% to 45%.

his administration somehow believed that financially Rape the people of America through absorbent amounts of taxation and ludicrous government spending would somehow help the American people through economically hard times…….

All of Hoover's policies, listed above, did nothing but economic ruin like the United States never seen before, and can only be considered a new deal. Which Benjamin Anderson rightfully called it Koinon Hoover's policies. ‘’Hoover's new deal’’

The same as Roosevelt's New Deal that supposedly led to the end of the Great Depression.

Hoover was the 1st president, the first in a series of presidents It must add, who largely intervened in the economy and depressions, whether it be.an increase of wage rates increase of government spending, increased taxation Etc

The pseudo historiography spread about Hoover's presidency into the subsequent presidency of Franklin Delano Roosevelt and economic history as a whole. has done nothing but damage the American psyche, in fact the global psyche in regards to economic interventionism, the cause of depressions and how depressions end.

Roosevelt, Hoover's successor, was far worse than Hoover in Every sense of the word yet his presidency and his control of the American people and manipulation is a story for another day.

Anyway, this was Dark Age Sage and see you in the next one.

References

Rothbard, 1963. America's Great Depression, chapters 7 through 9.