Current writes in one of the previous posts on Hoover: "It seem to me that to Keynesians a government must perform a large stimulus of some sort to be Keynesian by them. A simple increase spending isn't regarded as enough."
To a certain extent, sure. Do Austrians consider Bill Clinton to be a fellow traveler because he stopped running deficits?
People are focusing on rates with Hoover, and the rate of growth was large - but from a small base. Levels matter too. My position is fairly straightforward, and I'm amazed at how much acrimony it inspires. Did he raise spending? Of course he did. The data is right in front of our faces. How might we characterize the administration's fiscal policy? Austere. Hoover's biggest spending year had a lower spending level than the 1921 federal budget. I have been told ad nauseum that 1921 was a year of fiscal austerity. If that's austerity, then so is 1932. Period.
Here's the thing - the federal government was a fiscally austere institution until WWII. That was just the nature of government at that time. People did "Keynesian" things with monetary policy before WWII. Wars and megalomaniacal leaders provided sporadic opportunities to do "Keynesian" things with fiscal policy. But for the most part, in a normal, democratic, peace-time context it was just austere by nature. And for that time, that was probably just fine. I think we can afford to do a little more now.
And I don't hold it against Hoover. Like the early Roosevelt, he was groping towards a new world order. Good for him! But if his budget looks more or less like Coolidge's budget, and Harding's budget, and peace-time Wilson's budget and the budgets before them, let's just call it what it is - it's fiscal austerity. Levels and rates both matter.
Dan Carlin’s “Hardcore History”
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