Rexford Tugwell and others drew what they thought was the obvious conclusion the Soviet Union was on the right track – and Hayek fought back.
Why is Herbert Hoover so reviled?
How should history rate Herbert Hoover, the nation’s 31st President? By today’s standards, Hoover was an anomaly. He rose, in Horatio Alger fashion, from being orphaned at age nine to the pinnacle of self-made success in business and finance. Although he was a Quaker, Hoover’s martial adventures in China’s Boxer Rebellion in 1900—at one point leading a detachment of U.S. Marines against Chinese rebels—rival the fictional exploits of Indiana Jones. In an era before ghost writers, Hoover was an accomplished author; his 1922 book, American Individualism, cemented the fame he had earned as a global mining engineer and international humanitarian relief administrator.
As Secretary of Commerce from 1921 to 1927 under Presidents Harding and Coolidge, Hoover was viewed as a supremely competent technocrat and statesman. During his long tenure as a cabinet head, he helped rebuild wartorn Europe, shaped emerging industries (such as radio), oversaw domestic flood relief, and promoted a national business policy of higher wages, expanding markets, and more efficient production. By dint of his remarkable achievements, Hoover became one of the most popular and influential men in American public life.
When Coolidge unaccountably declined to run for reelection in 1928, Hoover won the White House in a landslide without ever previously having held elective office. Yet in 1932, after a single term in office, he was routed by FDR and, in the words of historian George H. Nash, left office “a virtual pariah, despised and rejected like no other American in his lifetime.”
Hoover’s fate was sealed by the onset of the Great Depression. Following the collapse of the London Stock Exchange in September 1929, the U.S. stock market “crashed” a month later. In the United States, economic conditions spiraled downward throughout Hoover’s presidency. Worldwide depression afflicted all Western industrialized countries for a decade. Americans were understandably shocked to experience deprivation and hardship after a decade of prosperity and cultural dynamism during the “Roaring Twenties.”
Is it fair to blame Hoover for this calamity, and will the harsh judgment of history ever relent?
For decades, liberal historians have made Hoover a scapegoat—the villain, really—in the saga of an unregulated free market economy that supposedly failed. According to the conventional narrative, only the New Deal—midwifed by FDR—“saved” the U.S. from ruination and despair. Hoover, supposedly a shill for Big Business, has come to personify the “failures” of unbridled capitalism. In contrast to his successor, many historians have rated Hoover one of our worst Presidents, and in the popular mind his name is often associated with Depression-era shantytowns—“Hoovervilles.”
Is it a fair rap? A new generation of historians is taking a second look at Hoover’s presidency—and in the process some are reaching a somewhat different verdict. Two recent books reassess the record, Charles Rappleye’s Herbert Hoover in the White House (2016) and Glen Jeansonne’s Herbert Hoover: A Life (2016). In addition, in 2016 the Hoover Institution Press reissued American Individualism with an introduction by George H. Nash, a sympathetic historian who has written several volumes of biography on Hoover.
A fair-minded view of Hoover dispels most of the stereotypes that haunt his conventional historical portrait. Ironically, despite his later writings highly critical of government intervention, and his perception as a rock-ribbed conservative (and founder of his namesake Hoover Institution), Hoover was a Progressive early in his political career. He supported Theodore Roosevelt as the “Bull Moose” Progressive Party candidate in 1912, and worked under Democratic President Woodrow Wilson as food administrator during World War I. Hoover did not formally identify himself as a Republican until 1920. Nor, as we shall see, did he govern as a doctrinaire proponent of laissez-faire while President.
It is difficult to blame Hoover for the Great Depression when the stock market crashed less than eight months after he took office, due to a global economic contraction. For what, then, is Hoover deemed to be culpable? Other than the bad luck of having the Depression start on his watch—proof that the fortuity of timing often plays a large role in history—he is sometimes blamed for not doing enough to “fix” the American economy. This is a dubious indictment, given that the Depression persisted—despite or because of FDR’s vigorous ministrations—until the late 1930s, long after Hoover left office. Even today, economists dispute what “caused” the Great Depression, and what was responsible for ending it.
Hoover can hardly be accused of idly standing by as President. He was an activist who attempted to jump start the free-falling economy in a number of ways (for which he is criticized by some conservative historians). For example, he supported massive government-funded construction projects, including building the Hoover Dam (which FDR spitefully renamed the Boulder Dam—subsequently reversed). He also supported interventionist programs, such as the Reconstruction Finance Corporation, which loaned government money to banks and private businesses. Hoover supported various pro-labor measures, including the Davis-Bacon Act, which required the payment of “prevailing wages” on public works projects. Moreover, the Norris-LaGuardia Act, which outlawed employer policies against union membership and forbade federal court injunctions in labor disputes, was passed while he was president. Both of these laws were important precursors to more intrusive New Deal statutes, such as the 1935 Wagner Act.
These massive federal programs were very expensive. Hoover’s initiatives created an unprecedented $2.7 billion budget deficit—an enormous sum at the time. Significant tax increases were necessary to finance Hoover’s costly programs. To Hoover’s considerable dismay, his efforts to control the economy were unsuccessful. In his previous endeavors, Hoover was able to solve complex problems through technical expertise and government resources. Engineering, planning, and private-public “cooperation”—the tools of progressive reformers—had worked. Now, however, “fixing” the Depression bedeviled him. The economy defied Hoover’s myriad attempts at government-led correction.
Despite his heavy-handed intervention, wages fell. In order to bolster falling prices, Hoover signed into law a heavy new tariff, Smoot-Hawley, which hobbled international trade. Tax increases inhibited economic activity. The public was unsettled by bank failures, foreclosures, and mass unemployment (which in 1932 stood at nearly 25 percent). Ironically, in the 1932 campaign, FDR attacked Hoover’s deficit spending and promised to balance the federal budget! Roosevelt’s running mate, John Nance Garner, accused Hoover of “leading the country down the path of socialism.”
Hoover’s reelection prospects in 1932 were likely doomed by the nation’s bleak economic conditions, but were not helped by his glum personality (in contrast to the sunny FDR), lack of charisma, poor campaigning skills, and support of the unpopular Prohibition (which ended in 1933). The coup de grace, however, was supplied by the “Bonus Army” imbroglio. In June 1932, thousands of unemployed veterans of the Great War descended on Washington, D.C. to demand immediate payment of a bonus they had been promised for their military service, but which was not due until 1945. When the protesters, who had camped out on government property, refused to leave, federal troops forcibly removed them, leading to a violent altercation in which hundreds of civilians were injured. Although the overzealous cavalry soldiers (led by General Douglas MacArthur, who departed from his orders) were to blame, the incident was politically disastrous to Hoover—another stroke of bad luck.
Amity Shlaes, biographer of Calvin Coolidge (who loathed Hoover, deriding him as “The Wonder Boy”), criticizes Hoover as a pre-Roosevelt regulator, whose flaw was an excessive, Progressive-style devotion to expertise, and whose policies were merely a dress rehearsal for the New Deal. She avers that “There is plenty of evidence that neither in the 1920s nor the 1930s did the U.S. economy require an octopus expert or even a Great Engineer. Yet Hoover’s urgent need to show off his knowledge by mounting rescue operations—whether of the food-aid or stock-market variety—overwhelmed his common sense.” Perhaps, but hindsight is always 20-20. The Depression was a dire situation, arguably warranting creative solutions. And since many historians credit FDR’s nostrums with eventually delivering America from the Depression, why should Hoover not get credit for doing the preliminary work? If Hoover’s economic policies were a failure, FDR should share the blame, because, as Shlaes states, the New Deal was just “a more intense, less constitutional version of Hoover policy, [which] also failed to yield recovery—for seven more years.”
Bottom line: If Hoover was wrong, so was FDR. And if FDR is a populist hero, Hoover cannot be excoriated as a failure. What is clear, however, is that following his defeat in 1932 Hoover saw the danger of the federal Leviathan, and spent the rest of his life warning Americans about it—undoubtedly earning the lasting enmity of liberal historians. For that alone, Hoover deserves redemption.