The article containing that quote, Great Myths of The Great Depression has been around since 1998, but it’s always good to put it in front of people repeatedly because they’re myths that don’t die easily.

For example, Old Leftists like Chris Trotter will always bring up the First Labor Government in NZ and FDR’s New Deal in the USA for how they dealt to the Great Depression. What they don’t mention is that Great Britain and Australia had centre-right governments – even with Labour Party involvement occasionally – that did not go for all the industrial nationalisation, new types of welfare support, and most importantly, Keynesian spending. And yet they emerged from the Slump at the same speed as we or the USA did in terms of GDP recovery, dropping unemployment (both Britain and Australia) and so forth

What’s also not mentioned is that in the USA, after all of FDR’s efforts, unemployment was still at 17% in 1937, Things didn’t really improve until war production got underway in 1940, as was the case elsewhere.

But aside from the myths about all the positives of FDR’s New Deal are forgotten details like this one:

During the campaign, Roosevelt blasted Hoover for spending and taxing too much, boosting the national debt, choking off trade, and putting millions of people on the dole. He accused the president of “reckless and extravagant” spending, of thinking “that we ought to center control of everything in Washington as rapidly as possible,” and of presiding over “the greatest spending administration in peacetime in all of history.” Roosevelt’s running mate, John Nance Garner, charged that Hoover was “leading the country down the path of socialism.”

Why on earth would FDR, of all people, go around saying that about the Republican Herbert Hoover when everybody knows that Hoover was a huge advocate of “hands-off,” laissez-faire, economic policy that allowed unfettered capitalism free reign before it crashed in 1929 and brought much else down with it. If you watch the opening theme to the famous American TV sitcom, All In The Family, you’ll see how this myth was reinforced every week before tens of millions of viewers decades after it ceased to be a political argument – while still being a powerful piece of ideological propaganda.

Well FDR said that because it was all bloody true. Hoover was a hands-on, control freak – just as his former boss, President Calvin Coolidge had feared when he said:

“That man has offered me unsolicited advice every day for six years, all of it bad.”

And once he became President in March, 1929 – Coolidge having declined to run again even though eligible – Hoover put that bad advice into action:

  • He allowed the Fed to shrink the money supply by 30%, starting in early 1929.
  • In the space of one year alone, from 1930 to 1931 he increased federal government’s share of GNP increased by about one-third. (see this link for the difference between GNP, an older economic measure, and GDP: measured by GDP the spending percentage increase would have been larger)
  • He got the Smoot-Hawley Tariff Act passed in June 1930, which was the most protectionist legislation in U.S. history which ignited a vicious international trade war.
  • His agricultural bureaucracy doled out hundreds of millions of dollars to wheat and cotton farmers even as the new tariffs wiped out their markets. His Reconstruction Finance Corporation ladled out billions more in business subsidies.
  • Revenue Act of 1932. It doubled the income tax for most Americans; the top bracket more than doubled, going from 24 percent to 63 percent. Sure he’d continued cutting taxes when he became President in March 1929, which is what the Left still talk about, but they don’t talk about Hoover’s massive tax increases later on.

The biggest joke was that, having railed against all this in the 1932 election, FDR promptly stuck with it and pushed it even further.. Politicians and politics eh?

Rexford Guy Tugwell, one of the architects of Franklin Roosevelt’s policies of the 1930s, explained, “We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.”