Krugman gets Hoover (essentially) right

I think there is some sloppiness out there on Hoover and there's some revisionism on Hoover. The sloppiness is on the part of people who say he cut or did not increase spending. I believe Krugman has done this before. If not him, certainly many have. It's easily verified that this is not true, but it's an impression we've had for a long time.

The revisionism comes in with the critics of Krugman and people like him that try to act like a lack of cuts makes Hoover an activist. This is extremely misleading. Hoover didn't cut, but there's a good reason that he's perceived as being austere (even aside from the tax increase austerity - I'm talking about if we just stick to the spending and deficit numbers). A recent example is this criticism of Krugman by David Henderson (although he's careful to note that Krugman never actually says anything that's wrong, which makes Krugman "clever"... I guess the idea is that Krugman is trying to be dishonest but knows how far to push it??? I don't know).

I put this together a while ago - it puts Hoover's spending in the context of Harding, Coolidge, and Roosevelt:

 

There is an uptick in spending under Hoover, but it's barely perceptible unless you do what the revisionists do and zoom in on that portion. When you zoom out, two things jump out at me:

1. - In the context of the fiscal injection that is credited with (in combination with monetary policy) getting us out of the Depression, the Hoover increase is a rounding error, and

2. Harding's budget - which is allegedly a paragon of austerity virtue - is higher than Hoover's budget. So someone please explain to me why proponents of austerity lionize Harding in 1921 but act like Hoover is some kind of Keynesian in the early 1930s.

When I posted on this before, this was my position and it's still my position:

"The early 1930s was a period of fiscal austerity. Tax rates were raised precisely when they should have been maintained or probably lowered. It's quite true that Hoover did not slash spending - he increased it. Indeed, he increased it through programs like the Reconstruction Finance Corporation that laudably generated important institutional infrastructure, which would serve the country well during the New Deal and the second world war. But the Hoover administration and the early Roosevelt administration spent at a level that was consistent with the post-WWI spending of the Wilson administration, the Harding administration, and the Coolidge administration. That was fine for the 1920-1921 depression and the 1920s, but it was not an appropriate fiscal policy response to the early 1930s. It was far too austere. While the Hoover administration and the early Roosevelt administration both increased spending levels, there was no practical difference from a macroeconomic stabilization perspective between their spending policy and that of the Coolidge administration. Both men did a lot of bad things and both men also did some good things, but the real regime change in fiscal policy did not come until the late 1930s and early 1940s."

David is principally concerned with the "impression Krugman leaves the reader". Of course any given account will vary, but in my view any account that is more or less like what I said above is giving the right impression, and I think Krugman does just fine (although as I said in the beginning - sometimes the account gets a little sloppy. He's not a historian - not big deal in my opinion. The important thing is the impression Krugman leaves that reader).