Not everybody is well informed about economics, or history, or economic history. That's life. We build narratives, though.
I was intrigued by this comment by Bob Murphy about what we could call the "Hoover narrative": "the average NYT reader would certainly think that the Hoover years were
characterized by sharp cuts in government spending, in response to the
1929 crash."
I disagree with Bob. At least coming from my own sample of one before even studying economics, I never thought or learned about "sharp cuts in government spending".
In fact, there's a funny little adjective our national narrative has attached to the Hoover administration - he is known as "the do-nothing president". Not "the spending slasher president", but "the do-nothing president".
And - for the reasons I laid out in the last post - I think that narrative is 100% fair. Hoover at the time probably didn't think that's what he was. And I think the guy meant well. And I'm not sure what we, in 2012, could really have expected. Government was just different back then. But I think this is the stigma that has attached to Hoover - that he just kinda sat there, not that he was some kind of spending slasher.
Tuesday, February 21, 2012
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I think this kind of re-defines what people mean by "do nothing."
ReplyDeleteI agree. One can argue whether the man was really effective in propping up wages or whether raising taxes was a good idea, but it certainly was doing something!
DeleteMost people get the impression Hoover was slasher from high school history textbooks. It is prevalent.
ReplyDeleteI'm not sure this is true, as I said. Most people - I think - think of him as a "do nothing president" that's certainly what I was taught.
DeleteAnyway, I'm sure lots of people think lots of different things of him. But "do-nothing" is the monicker that really stuck.
Which really is more damning for Krugman, of course, who took do-nothing up a notch.
Sorry Dan, Anonymous was me. I forgot to type in my name.
DeleteUnfortunately I don't have a high school history textbook, but throughout middle school and high school we were taught that Herbert hoover did nothing and cut spending and then came Franklin Roosevelt. FDR was the good guy, HH was the bad guy. All of this fit right in with the anticapitalist mantra that the Industrial Revolution caused terrible problems, Standard Oil was a vicious monopoly that engaged in predatory pricing, the Progressive Era corrected capitalism's ills, the Great Depression was caused by a wild stock market boom due to unbridled speculation etc etc. Ask most people to define how Herbert Hoover was a do nothing president, and they'll probably say "He cut spending". Most people won't say "He raised taxes". Hell, most people don't even know Herbert Hoover raised taxes.
Wow - you had a horrendously leftist primary school experience. I can't say it was similar to mine at all.
DeleteYou don't think... maybe... this is your libertarian retrospective on your memories of your school days?
Perhaps I'll collect references to the "do nothing presidency" of Hoover. You can collect references to Hoover's spending cuts if you want.
History texts are edited by historians, after all.
DeleteThey might not have Friedman and Schwartz or Bernanke's spin in the Depression section, but I doubt they'd let "Hoover cut spending" slip by. I could be wrong.
Since I only am a junior in college, and originally wanted to major in history (I took AP US and Euro in my senior year), I'd say my memory serves me pretty well. Granted, my libertarian spin singles out (and probably exaggerates) these things.
DeleteBut, I'm positive that for 99% of kids who take high school history, they learn, among other things:
Industrial Revolution caused many problems that capitalism could not solve (child labor, poor working conditions, long hours, strikes, poor pay, etc).
The Progressive era was needed to curb monopolies, and all the progressive legislation was there to correct market deficiencies (Antitrust, predatory pricing, FDA, etc).
Roaring Twenties caused unbridled stock market speculation, Hoover was laissez faire, FDR saved the day and implemented many important reforms to correct further market deficiencies (Glass Steagall, SEC, Wagner, etc).
Had the same experience as Patch. I distinctly remember going through the "best and worst" presidents according to "historical experts". Of course, FDR was on there (according to many, the best ever) and Hoover was one of the last - a laisseze fair failure. Most of the lists I saw, especially with regard to presidents of the last 150 years, seemed largely to rest on how much power was exercised by the president (not what I think makes for a good president). In any case, just take a look at the Wiki surverys and you get a pretty good idea of what kids are taught about the various presidents.
DeleteAgree with the above, especially about President's and crises. I'm not saying I was taught Marxist garbage, but in American history I think the main premise was to explain how American government has evolved from the limited intention of the FF to a much bigger role due to a changing society. Government needed to be bigger to correct for the pitfalls of the unbridled market as well as to meet the challenges abroad (foreign policy)
DeleteWhich is interesting, anonymous, because there is definitely a lot of well established historical literature that tells you Hoover was not some kind of wide eyed budget cutter (I've even read a book on the subject that had a pretty overt liberal bias that noted this). Even in the late 30's you had a former FDR adviser noting that Roosevelt was the one who ran as a budget cutter in the 1932 election and that large portions of the first new deal were continuations of Hooverite programs.
ReplyDeletePersonally I remember very little from High School history classes, but I definitely had the impression that Hoover was a budget cutter at one point.
Off Topic: Goodbye Daniel, it was fun debating and discussing stuff with you. Unfortunately I am leaving the internet for the foreseeable future. I may pop in here and there, but I think my commenting days are over.
ReplyDeletePeace. Joe
Daniel Kuehn, hang on a second. I agree with you that the average American in the year 2007 would have thought Herbert Hoover sat back and did nothing while the country slipped into Depression.
ReplyDeleteBut that's not what I said. I said "the average NYT reader," and in context I meant, today, after reading Krugman's latest op ed. Krugman specifically said that the notion that slashing spending would help during a depression "sounds like something Hoover would say" (not looking up exact quote). So did you email Krugman to say, "Actually Dr. Krugman, that doesn't sound like something he'd say, or at least, I imagine most of your readers will be puzzled by your assertion"?
And this is a pattern with Krugman, Daniel. Look at this op ed: 50 Herbert Hoovers. This isn't about "do nothing":
But even as Washington tries to rescue the economy, the nation will be reeling from the actions of 50 Herbert Hoovers — state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic future.
OK? Do you see what Horwitz et al. are complaining about? For more than 3 years now, Krugman has repeatedly led his readers to believe that Hoover slashed spending while in office.
I'll make a deal Daniel: I'll admit that I try really really hard to spot a mistake/contradiction in Krugman's posts, and that I don't point such ire at my buddies. But please do you not really see that you bend over backwards to justify what he says? You say you agree Hoover didn't slash spending, but aren't sure Horwitz is right to call that latest op ed BS. Since Krugman strongly led his readers to believe Hoover was a budget slasher, those two beliefs are incompatible.
I haven't emailed him, no.
DeleteI'm really not sure how else you need me to say that Krugman is wrong on the "slashing spending" point. You want me to also admit that this amounts to "propaganda" and justifies all the nastiness that's heaped on Krugman. I can't go that far, Bob. He's misrepresenting one point, but making another good one - that the Hoover-early Roosevelt period was one of austerity.
Steve Horwitz, likewise, is making one good point and misrepresenting another point. Steve is right to point out that Hoover didn't cut spending. But he's misrepresenting things when he fights this idea that Hoover's administration was one of austerity.
None of this is incompatible. I can think that Krugman made a good argument even if all his claims weren't particularly good.
re: "Do you see what Horwitz et al. are complaining about?"
Yes. Do you see what Krugman and I and others are complaining about?
re: "But please do you not really see that you bend over backwards to justify what he says?"
I really, really, really, really, really wish people would stop saying things like this. I will admit I probably don't jump on his mistakes as much as I jump on others' mistakes. You said you'd admit this as well. That's fine. I think this is natural. But I don't "justify what he says" if he says something wrong. If I am justifying something Krugman says it's because I think he's right.
He's wrong about slashing spending - I've been entirely unambiguous on this point.
He's right about Hoover being and austere administration - Steve is wrong on this.
He's wrong about drawing a simple correlation and trying to act like it proves Keynesianism.
He's right in the next post to do a scatter plot with a plausibly exogenous variation in government spending (i.e. - military spending).
He's wrong when he slips into consumptionist arguments, as he often does.
He's right when he makes investment-demand based arguments, as he often does too.
I may underemphasize points I'm critical of him on, but I give no cover to him when I think he's wrong.
Krugman's offhand reference to "Herbert Hoovers" does the former President no justice, but then I can easily point to an insistence on calling the deficit a "Ponzi Scheme," which is hardly any better for choosing to distort a factual issue rather than credulously play off a common conception about a person (although I know it would amuse many people to think that Charles Ponzi is done injustice by mentioning him in the same breath as the national debt; it just ain't so).
ReplyDeleteThe one governor he singles out for "jeers," former Governor Schwarzenegger, "did nothing." He didn't even kick the collective butts of the California Nurses Association, as he said he would.
I hear my professors say things I know to be factually inaccurate all the time, and sometimes glaringly so - but knocking out one factual point is not enough to wipe a premise from an argument. For the sake of keeping the discussion on track I sometimes must hold back on the historical tangents, even if it is usually distasteful to allow inaccuracies. Krugman clearly equates the plight of state governments with inaction at the national level, arguing that state fund cuts are a necessary consequence of a national-level failure. We can complain about the headline, but the larger picture remains.
Sure, Krugman's style here is a bit misleading and offensive, but he doesn't need to construct a false history to propagate his viewpoint. I almost wonder if Krugman has stumbled into some brilliant tactic by threading irrelevant untruths through some of his op-eds so that the loyal opposition wastes its energy blogging about matters of no substance; this episode (on top of many previous ones) would seem to indicate it's working. For the sake of economics, plesae don't be trolled; continue the fruitful side of your work.
Just last week Daniel was being thanked for criticizing Krugman for offering a shotgun plot as a "striking" correlation; how quickly Daniel reverts to the default guilt by association for pointing out poor reasoning from Krugman's naysayers. Week after week, it amuses me to watch this vacillation between swinging the stick and holding out a carrot. How badly do you guys want Daniel? How annoying is it to have a Keynesian who "keeps us honest?" :)
(Captcha: "many mongers")
Edwin Herdman: Funny comment, but Daniel keeps putting up stand-alone blog posts that cite me, by name, and talk about how unreasonable I'm being, and how those guys over at Coordination Problem are a bunch of meanies. So I'm trying to (a) clarify my position for anybody who delves into the comments and (b) explain to Daniel why people honestly have no freaking idea what his position is half the time.
ReplyDeletePrecisely *because* Daniel occasionally calls out Krugman et al., is why I even bother with this outreach. I don't post on DeLong's site, "Hey, if you stopped calling Mises a fascist, maybe more Austrians would be nice to you," because I know DeLong isn't interested in civility.
And look Edwin, you are using my earlier praise of Daniel against me. Again, *because* I often point out to Daniel that (in my mind) he is unreasonably standing up for Krugman on a certain point, in that other post I wanted to go out of my way to thank Daniel for his criticism. But now you've flipped that around to psychoanalyze me.
Sweet. I love the internet.
Well, not "meanies", but if three people separately attributed a position to you that you never said, I think "surreal" would be a fair way for you to sum up the conversation, Bob.
Deletere: "explain to Daniel why people honestly have no freaking idea what his position is half the time"
The point, Bob, is that if you used the simple decision rule "what he writes is his position and we cannot speculate on what he does not write about", your, Don, and Steve's comments wouldn't have been nearly mislead. You act like I'm being coy here. I'm not. That decision rule is pretty straightforward. If I don't say it, don't presume I think it. I'm really not sure why it's getting more complicated than that.
"He's misrepresenting one point, but making another good one - that the Hoover-early Roosevelt period was one of austerity."
ReplyDeleteHow was the Hoover period one of austerity? From "Lord Keynes" (good Lord!):
Fiscal 1929 | $3.127 billion (last year prior to Hoover)
Fiscal 1933 | $4.598 billion (last year of Hoover)
Total percentage increase from last year prior to Hoover to last year of Hoover = 47%.
Deflation (as measured by the CPI) in this period was at least 20%, so the inflation-adjusted increase in spending was at least 75%.
The total deficit run during the four years of Hoover was $5.1 billion. That was 32% of the total spending in the four years of Hoover.
If Barack Obama is not re-elected, and the spending in his final year is--adjusted for inflation--more than 75% higher than the last year of Bush, and the total deficits in his four years are 32% of the total spending in his four years, would you say his term was one of "austerity"?