Sunday, February 28, 2010

Herbert Hoover - Any Lessons for Today?

I've had a bit of a cold for the past few days and have not gotten a whole lot accomplished. On Thursday night I watched a PBS documentary about Herbert Hoover.

I'm not sure what got me thinking about Hoover, but I think it has something to do with the continuing recession and my wondering whether President Obama is addressing/confronting it rightly or wrongly.

Hoover was a mining engineer and a very successful businessman who became famous when he ran the Belgian Relief Fund during World War I. He's one of only two presidents who did not have either (or both) of the following backgrounds: (1) previous elected office or (2) military experience. In the video clips, he looks like a really nice, sincere, earnest guy. I can't figure out if that's just because most people look that way in old film clips, or if Hoover was actually nicer than most presidents.

Based on his experience in the private sector -- and his work with the privately-funded (for the most part? entirely?) Relief Fund -- he was loathe to support direct government relief once the Depression hit. That said, he did support a somewhat expanded role for the federal government (for instance, greater regulation of certain industries during his term as Commerce Secretary); but, he was not keen on taking actions, post-'29, that might be seen as creating an American "dole":
"Hoover opposed a larger role for the federal government, especially direct employment or relief payments to those without jobs. Such federal intervention, he alleged, would discourage private giving, undermine voluntarism, and destroy self-reliance by creating a class of dependent citizens." (this is from Michael Parrish's Anxious Decades (1992), p. 252)
Interestingly, one of the government interventions that Hoover did support was a bank bailout!

It strikes me as quite similar to the bank bailouts of 2008-09, and the public frustration with Obama's putting too much emphasis on saving the banks seems something of an echo of a similar complaint about Hoover:

"The administration's first significant departure from voluntary cooperation was the Reconstruction Finance Corporation, which was approved by Congress in January 1932 with authorization to lend up to $2 billion of the taxpayers' money to rescue commercial banks, savings banks, trust companies, credit unions and insurance companies ... In the face of complaints that the administration's first dose of direct federal aid targeted financial institutions and corporations instead of people out of work, Hoover declared that the RFC was 'not created for the aid of big industries or big banks' but as 'an insurance measure more than anything else.'

... But by the summer of 1932, Hoover had great difficulty explaining why the federal government should directly assist faltering corporations but not destitute workers and their families." (Parrish, p. 254)

Wow, this sounds very familiar.

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