Freeman

BOOK REVIEW

Herbert Hoover

MARCH 24, 2010 by JIM POWELL

Filed Under : Biographies

William E. Leuchtenburg is among the last surviving literary lions who played a major role shaping the reputation of Franklin Delano Roosevelt. His book Franklin D. Roosevelt and the New Deal (1963) stood out amidst the postwar deluge of worshipful works about FDR, including those by James MacGregor Burns, Arthur M. Schlesinger, Jr., Frank Freidel, and Kenneth S. Davis. Leuchtenburg, professor of history emeritus at the University of North Carolina, is an engaging author who knows how to tell a good story.

This new biography of Herbert Hoover is a prelude to the morality tale that Leuchtenburg has already presented—namely, the heroic New Deal narrative. According to Leuchtenburg, the 1920s were a failure, and the worst failure was Herbert Hoover. He was a “heartless” man, a “dogmatic reactionary,” “a right winger of deepest dye” who preached “minimalist” government. Hoover wouldn’t spend enough money on relief because of his unwarranted “faith in voluntarism.”

Yet Leuchtenburg provides evidence aplenty that Hoover wasn’t quite the laissez-faire champion he has been made out to be. While criticizing Hoover for wanting to balance the federal budget, Leuchtenburg acknowledges that Hoover “was running a historic deficit—nearly a billion dollars.” Leuchtenburg mentions how Hoover’s Grain Stabilization Corporation tried to help farmers by purchasing agricultural commodities at above-market prices, only to find that farmers responded by producing more. Overwhelmed with unwanted surpluses, the Corporation dumped these commodities on the market, driving farm prices even lower than they had been before. Furthermore, Hoover’s Reconstruction Finance Corporation bailed out banks, railroads, insurance companies, and building and loan associations, but still the depression deepened. In 1932 Hoover signed the Norris-LaGuardia Act, giving labor unions immunity from antitrust laws, private lawsuits for damages, and injunctions from federal courts, which enabled union bosses to push aggressively for monopoly bargaining power and forced dues.

I would agree with Leuchtenburg that two of Hoover’s biggest blunders were signing the Smoot-Hawley tariff in 1930 and tax hikes in 1932. The problem is that it’s impossible to square all of this federal activism with the notion that Hoover believed in “minimalist” government.

Nor does Leuchtenburg comment on the striking similarity between the policies of his demon Hoover and his hero FDR. Hoover and FDR both raised taxes. Both spent money on public works that didn’t provide many jobs for unskilled people. Hoover signed the trade-stifling tariff. FDR effectively embraced it; he never spent any of his formidable political capital trying to repeal it, which he might have been able to do soon after he was sworn in, when a desperate nation was at his feet waiting for leadership and inspiration. Powerful protectionist interest groups would have opposed FDR, but he had an appealing personality and formidable communications skills, and was a political genius. I think he could have exploited the deep resentment against Hoover to eliminate his monstrous tariffs and taxes, providing a much-needed stimulus for the economy. Apparently, he was content with Hoover’s anti-trade policy.

FDR, like Hoover, spent much effort trying to prop up wages and prices. This prevented markets from fully adjusting to the severe contraction. Maintaining above-market prices discouraged consumers from buying, and above-market wages discouraged employers from hiring. Also, like Hoover, FDR expanded the power of labor bosses (especially with the 1935 National Labor Relations Act). Unemployment dragged on under Hoover, and it dragged on even longer under FDR—until 1940, when the government began mobilizing for World War II and conscripting young men.

These striking similarities create more than a few problems for the heroic New Deal narrative. If Hoover was bad and FDR was good, then why did FDR adopt Hoover’s major policies? If Hoover’s policies were a reason that high unemployment dragged on for three years of his presidency, then why weren’t FDR’s policies a reason that high unemployment dragged on for seven years of his presidency? If Hoover is viewed as having failed to get America out of the Great Depression, why shouldn’t FDR similarly be viewed as having failed to get America out of it? The main difference between Hoover and FDR might be that FDR went on to win World War II, and probably many people ignore or forgive his depression-era bungling because of that.

The key to Hoover’s and FDR’s failures during the Great Depression was their “progressive” ideas. Both men grew up on those ideas and took them to heart when they served in Woodrow Wilson’s wartime administration. The depressing thing about this book is that instead of debunking the myth that Hoover and FDR were philosophical opponents, it attempts to keep it alive.

ASSOCIATED ISSUE

April 2010

ABOUT

JIM POWELL

Jim Powell, senior fellow at the Cato Institute, is an expert in the history of liberty. He has lectured in England, Germany, Japan, Argentina and Brazil as well as at Harvard, Stanford and other universities across the United States. He has written for the New York Times, Wall Street Journal, Esquire, Audacity/American Heritage and other publications, and is author of six books. 

 

comments powered by Disqus

EMAIL UPDATES

* indicates required

CURRENT ISSUE

December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
Download Free PDF

PAST ISSUES

SUBSCRIBE

RENEW YOUR SUBSCRIPTION

Essential Works from FEE

Economics in One Lesson (full text)

By HENRY HAZLITT

The full text of Hazlitt's famed primer on economic principles: read this first!


By FREDERIC BASTIAT

Frederic Bastiat's timeless defense of liberty for all. Once read and understood, nothing ever looks the same.


By F. A. HAYEK

There can be little doubt that man owes some of his greatest suc­cesses in the past to the fact that he has not been able to control so­cial life.


By JEFFREY A. TUCKER

Leonard Read took the lessons of entrepreneurship with him when he started his ideological venture.


By LEONARD E. READ

No one knows how to make a pencil: Leonard Read's classic (Audio, HTML, and PDF)