In today's New York Times, we get this from Paul Krugman:
Specifically, in early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did.
Actually Kruggie, that doesn't sound like Hoover, that sounds like a big pile of bullshit.
I have documented the reality of the Hoover Administration's pro-spending and pro-deficit policies rather thoroughly in this Cato paper. The relevant highlights:
The 1929 budget was $3.1 billion, and Hoover’s first budget in 1930 had $3.3 billion in spending, followed by $3.6 billion, $4.7 billion, and $4.6 billion over the following three years. In nominal terms, he increased spending 48 percent over the last budget of the previous administration. However, this period was one of significant deflation, so if we adjust for the approximately 10 percent per year fall in prices over that period, the real size of government spending in 1933 was almost double that of 1929. The budget deficits of 1931 and 1932 represented 52.5 percent and 43.3 percent of total federal expenditures. No year between 1933 and 1941 under Roosevelt had a deficit that large.8 It is hard to reconcile those data with the claim that Hoover was a defender of “austerity” and “budget cutting” in the name of laissez faire.
Most of these policies continued, and many expanded, throughout 1931, with the economy worsening each month. By the end of the year, Hoover decided more drastic action was necessary and, on December 8th, he addressed Congress and offered a set of proposals that historian David Kennedy refers to as “Hoover’s second program” and that has also been called “The Hoover New Deal.” The list of items he proposed included:
- The Reconstruction Finance Corporation to lend tax dollars to banks, firms, and other institutions in need.
- A Home Loan Bank to provide government help to the construction sector.
- Congressional legalization of Hoover’s executive order that had blocked immigration.
- Direct loans to state governments for spending on relief for the unemployed.
- More aid to Federal Land Banks.
- Creating a Public Works Administration that would both better coordinate Federal public works and expand them.
- More vigorous enforcement of antitrust laws to end “destructive competition” in a variety of industries, as well as support for work-sharing programs that would supposedly reduce unemployment.
On top of those spending proposals, most of which were approved in one form or another, Hoover proposed, and Congress approved, the largest peacetime tax increase in American history. The Revenue Act of 1932 increased personal income taxes dramatically, but also brought back a variety of excise taxes that had been used during World War I. The higher income taxes involved an increase of the standard rate from a range of 1.5–5 percent to the 4–8 percent range. On top of that increase, the act placed a large surtax on higher-income earners, leading to a total tax rate of anywhere from 25 to 63 percent. The act also raised the corporate income tax along with several taxes on other forms of income and wealth.
And keep in mind Hoover's description of what his administration had done:
"We might have done nothing. That would have been utter ruin. Instead, we met the situation with proposals to private business and the Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. These programs, unparalleled in the history of depressions of any country and in any time, to care for distress, to provide employment, to aid agriculture, to maintain the financial stability of the country, to safeguard the savings of the people, to protect their homes, are not in the past tense—they are in action. . . . No government in Washington has hitherto considered that it held so broad a responsibility for leadership in such time."
Finally, consider what FDR's own advisors had to say:
Rexford G. Tugwell, one of the academics at the center of FDR’s “brains trust” said: “When it was all over, I once made a list of New Deal ventures begun during Hoover’s years as Secretary of
Commerce and then as president. . . . The New Deal owed much to what he had begun.”
Another member of the brains trust, Raymond Moley, wrote of that period:
"When we all burst into Washington. . . we found every essential idea [of the New Deal] enacted in the 100- day Congress in the Hoover administration itself. The essentials of the NRA, the PWA, the emergency relief setup were all there. Even the AAA was known to the Department of Agriculture. Only the TVA and the Securities Act was drawn from other sources. The RFC, probably the greatest recovery agency, was of course a Hoover measure, passed long before the inauguration."
Late in both of their lives, Tugwell wrote to Moley and said of Hoover, “we were too hard on a man who really invented most of the devices we used.” Roosevelt’s inner circle would have every reason to disassociate themselves with the policies of their predecessor, yet two of them recognized quite clearly Hoover’s role as the father of the New Deal.
All of this information is very easy to find for anyone who wants to look it up, even if they, like Kruggie, take pride in refusing to read anything by people they disagree with. At some point, this is no longer about laziness but about an intentional attempt to obfuscate and deceive, and to use propaganda to score ideological points. Kruggie has become a master of the genre.