Hoover Profile: One of the worst presidents in American history

Most people believe that just as the Great Depression ravaged the country, Hoover stood idly by and did nothing, and it was Franklin Roosevelt's active intervention in the economy that ultimately brought life to life. But nothing could be more unreal than this.

First, during the Great Depression, it was not true to say that Hoover was lazy to sit. He's done quite a bit — more than any peacetime president. Rexford Tugwell, an important figure in Roosevelt's New Deal program, later admitted, "We didn't recognize it at the time, but in fact the whole New Deal was pushed out of a plan initiated by Hoover." In fact, Hoover's constant economic chores made the situation worse. He took the trouble to turn the 1929 recession into the Great Depression. At a time of economic downturn in 1929 and 1930, the situation deteriorated considerably after a year of government intervention.

Custody unemployment

The month after the stock market crash, Hoover summoned key business leaders to the White House. He pleaded with them not to cut wages, arguing that high wages were a way out of the Great Depression because they gave individuals the means to buy goods.

Seriously, Hoover's philosophy seems plausible on the surface, and every American history textbook actually adopts this philosophy in its own right; The economic downturn, this argument, is caused by "low consumption." However, this view is absurd. If the Cause of the Great Depression has always been that consumers are spending less, then it's reasonable to predict that the hardest hit economic sectors will be the businesses that make pots and pans, toothpaste or applecakes. But the historian Gary Dean Best points out that it is the firms that produce durable goods and capital goods that suffer the most. "Consumers have increased their expenses," Best explains, "roughly helping businesses that produce consumer goods, and the facts show that sales of such enterprises have fallen minimally from pre-Great Depression levels; This has little or no to do with the heavy industry that was most affected by the Great Depression, while unemployment is mainly concentrated in heavy industry. ”

Hoover's theory ignores an important consideration — that wages are a cost to doing business. Demanding high wages, especially when prices are falling rapidly, makes it harder for businesses to hire people. However, the president had demands, and big business gave face. The tragic result is predictable: mass unemployment.

Hoover's mistake was to assume high wages as the cause of America's prosperity, not a manifestation of it. If high wages alone can create prosperity, and we only enforce a minimum wage of $100 an hour, we can eradicate poverty in the world. Only the lunatics support such a policy, because the result is an unheard-of unemployment rate and a complete catastrophe of the economy.

Take care of the agricultural chores

Hoover's agricultural policy was another disaster. Since the end of World War I, farmers have cried out for this and that subsidy from the government, including for help to raise the price of agricultural products. (Explain: Farmers want the government to make food and clothing more expensive for everyone, in order to benefit them.) Farmers are having a hard time because there are too many farmers—too many to be economically meaningful. During World War I, agricultural production in Europe was disrupted by the war, and the agricultural sector in the United States expanded dramatically. By the end of the war, there was little reason to expect the swollen agricultural sectors of the United States to remain the same size. Both man and resources had to be transferred to industry to produce the goods that Americans really needed.

Hoover created the Federal Committee on Agriculture to try to improve the situation of many American farmers. THE JOINT COMMITTEE OF AGRICULTURE LENT LENTS SO THAT FARMERS COULD HIDE THEIR PRODUCTS (ESPECIALLY WHEAT AND COTTON) AND SELL THEM FOR A PRICE. However, this method did raise prices satisfactorily, but the next year the farmers gleefully increased production, making the problem of surplus even worse. Finally, through its Grain Stabilization Corporation, THE COMMITTEE authorized the acquisition of wheat from American farmers at prices well above world prices. So the farmer sold the wheat to the "Grain Stabilization Corporation" instead of exporting it. Government agricultural officials firmly believe that the separation of American wheat from the world market will lead to a shortage of wheat in the world, and foreigners will soon cry and cry for American wheat. Instead, wheat producers in Canada and Argentina stole the U.S. market share of the world.

It is true that the American bureaucracy can raise the price of grain in the short term, but the huge surplus of wheat is bought by the government and the price of grain is lowered, because the world knows that this wheat will eventually have to be dumped on the world market. British economist Lionel Robbins commented a few years later: "The effect of the big buyouts on which Hoover tried to maintain the prices of agricultural products was to throw the market into chaos and create uncertainty. ”

The problem is that some government officials are honest enough to admit that for such a plan to work, they have to impose strict restrictions and stipulate how much farmers are allowed to produce. Asking farmers to consciously reduce the area planted with wheat and cotton has become a deaf ear. The chairman of the Joint Committee of Agriculture went too far in his efforts to raise prices, and he called on the governors to "immediately reduce farming and turn every three rows of cotton into one line" at once.

It's even more hilarious: increased taxes

The infamous Smart-Hawley Tariff Act, which was meant to provide tariff protection for U.S. agriculture, ended up with no politically viable way to limit that protection to just one slice of the economy. Countless industry pressure groups have rushed to Washington, also to fight for tariff protection. Virtually all U.S. economists unanimously urged Hoover to veto the Smart-Hawley Tariff Act, but Hoover turned a deaf ear and signed the tariff into law in June 1930, with more than 25,000? Tariffs on goods have increased by an average of 59%.

The tariff hit the U.S. export industry hard. The products of American business partners are shut out of the United States, and they inevitably retaliate. The Italian government, for example, responded by imposing double tariffs on U.S. cars — and sales of U.S. cars in Italy fell by 90 percent. France has virtually shut out all its American products. Spain retaliated by increasing tariffs on U.S. cars to such an extent as to ensure that U.S. cars could not be sold in Spain.

There are other aspects of tax increases – too many. In December 1931, Andrew Mellon, the first to cut taxes in the 1920s, suddenly made a 180° turn to raise taxes on a large scale. Congress and the President obeyed, and the result was the disastrous Tax Act of 1932. In The history of the United States, it is unprecedented to raise taxes to such an extent in peacetime. Income tax rates have increased dramatically, with the surcharge on the highest earners slipping from 25 percent to 63 percent. This meant that in the middle of the Great Depression, private investment was made unattractive at a time when private investment was desperately needed.

The lavish Hoover

Hoover also extensively increased spending on utility projects. More money was spent on these projects in four years than in the previous 30 years. The Smoot-Hawley Tariff Act led to a reduction in international trade, and he reduced the size of the shipbuilding industry by reducing the volume of shipping operations as before. Hoover's "Bank for Reconstruction" (RFC) provides emergency low-interest loans to sluggish industries, primarily railroads and banks. By the second half of 1932, the Bank of Reconstruction and Development was not only supporting troublesome businesses, but also lending money to the states for unemployment benefits and funding public programs.

The president's attempts to cheer up failed businesses have had problematic results. "The businesses he hoped to save," one historian wrote, "either went bankrupt after terrible suffering or were in debt throughout the 1930s." ”

In one area, Hoover's initiative differed from Roosevelt's: Hoover hesitated to provide direct federal relief, relying instead on voluntary organizations and eventually lending to states. In terms of providing assistance, he believed that voluntary organizations and state governments were as appropriate agencies as local governments.

Looking back on his tenure, Hoover congratulated himself on his bold move. "We may have done nothing," the president said in 1932, "and things would have failed." In the face of this situation, we prefer to propose to private enterprise, to Congress, the most ambitious economic defense and counterattack plan ever developed by the Republic. ”

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