Obama is to Bush as FDR was to Hoover?

[retro]

I heard this interesting comparison the other day; saying that Obama is playing FDR to Bush's Hoover.

Hoover proved to be a rather inept President who did more harm than good, though he had the deck stacked against him with the stock market crashing a mere 8 months into his term. What people don't really realize is that the market had largely recovered from the 1929 crash by 1930, and unemployment had stabilized back down to 6% from it's peak of around 10%. But Hoover, like the end of the Bush administration, pushed for the 1930s version of the TARP bailout funds. To oversimplify, this damaged the economy further and sent us spiraling further into the Great Depression.

Along comes FDR, who runs on a platform blasting Hoover for out of control, reckless, and extravagant spending. Then after he is sworn into office, spends far more than Hoover could have ever dreamed of in government interventions in an attempt to try and stimulate the economy, only to have all of his efforts fall flat, as the unemployment rate pretty much stayed stagnant. All they had really done is incur a monumental amount of debt... it wasn't until the attack on Pearl Harbor and the subsequent joining of the military by men and women along with the restarting of the American Industrial machine that the economy really got back on track.

I find it interesting that government intervention is probably a big part of what turned the stock market crash into the great depression. Then FDR did the same thing that Hoover had been doing, only on a bigger scale, hoping for different results.

This of course is a very oversimplified look at everything, because I was mainly trying to contrast Hoover and FDR with Bush and Obama. I think there's a pretty legitimate comparison to them though.

 

[Alien Allen]

yup

that is a pretty good analogy

Hopefully the idiots who vote won't get conned again and the Obomination will be a Peanut Boy four and out.

 

[Minor Axis]

Hoover proved to be a rather inept President who did more harm than good, though he had the deck stacked against him with the stock market crashing a mere 8 months into his term.

The great depression was preceded by many years of pro-business administrations just like Bush preceded Obama. So you pro- business oriented types can see that history does repeat itself when the system gets too far out of balance.

Along comes FDR, who runs on a platform blasting Hoover for out of control, reckless, and extravagant spending.

Yes, history according to the conservatives. You might as well talk about how the 60's ran pretty smoothly under both Dem and Reps until Ronald Regan's tax cutting policies drove deficits through the roof for the first time since WWII. Of course that won't help make your point.

 

[retro]

The great depression was preceded by many years of pro-business administrations just like Bush preceded Obama. So you pro- business oriented types can see that history does repeat itself when the system gets too far out of balance.

That's only one view of the cause of the Stock Market crash. There are plenty of other valid theories out there, including how the Fed (which should be abolished, but that's another point entirely) restricted currency while Britain returned to a gold backed currency. The "pro-business" administrations that you alluded to cut taxes, but more importantly cut government spending which also led the country into prosperity.

Yes, history according to the conservatives. You might as well talk about how the 60's ran pretty smoothly under both Dem and Reps until Ronald Regan's tax cutting policies drove deficits through the roof for the first time since WWII. Of course that won't help make your point.

No, that's according to facts. FDR won the presidency in part by campaigning against Hoover's reckless spending.

 

[Minor Axis]

No, that's according to facts. FDR won the presidency in part by campaigning against Hoover's reckless spending.

And why was it reckless? You can't be thinking of spending but instead creating SS because the two decades following WWII were among our most successful economically. The major problem with SS was not its conception, but that every party in power since its conception undermined it by robbing it. Should we shit on the program or those who purposefully ruined it?

 

[retro]

And why was it reckless? You can't be thinking of spending but instead creating SS because the two decades following WWII were among our most successful economically. The major problem with SS was not its conception, but that every party in power since its conception undermined it by robbing it. Should we shit on the program or those who purposefully ruined it?

What in God's name are you talking about? Social Security was part of the New Deal. I'm talking about how FDR campaigned against Hoover's reckless spending. That's what you quoted, so I'm assuming that's what you were referring to.

FDR campaigned against Hoover's spending, and then went out and spent infinitely more than Hoover could've ever dreamed of. Geez, you accuse all of the rest of us of twisting and only reading what you want to read....

 

[retro]

And why was it reckless? You can't be thinking of spending but instead creating SS because the two decades following WWII were among our most successful economically. The major problem with SS was not its conception, but that every party in power since its conception undermined it by robbing it. Should we shit on the program or those who purposefully ruined it?

Oh, and in response to your comments about us being the most successful for the two decades after WWII... you have to factor in the fact that while income taxes were high during that period of time, the total tax burden on the average citizen was actually far lower than it is today. When you consider things like property taxes, sales tax, energy taxes, state income taxes, and the whole host of other taxes we deal with on a regular basis.

 

[Minor Axis]

I'm sorry, I thought we were talking about the Great Depression leading up to WWII. No intention of twisting your words. I guess I'm confused. So you don't think FDR was reckless?

 

[retro]

I'm sorry, I thought we were talking about the Great Depression leading up to WWII. No intention of twisting your words. I guess I'm confused. So you don't think FDR was reckless?

Hoover was reckless according to FDR, and then FDR went and spent more money than Hoover could've ever dreamed of spending. It was reckless spending as far as I'm concerned, and it didn't do a thing to "stimulate" the economy either. Kinda like another President I know of, eh?

The way I look at it is that Hoover (Bush) fucked it up, and then FDR (Obama) fucked it even more.

 

[Minor Axis]

Hoover was reckless according to FDR, and then FDR went and spent more money than Hoover could've ever dreamed of spending. It was reckless spending as far as I'm concerned, and it didn't do a thing to "stimulate" the economy either. Kinda like another President I know of, eh?

The way I look at it is that Hoover (Bush) fucked it up, and then FDR (Obama) fucked it even more.

Well, bro, you took such exception when I was arguing against you that FDR was not reckless. Maybe I just jumped ahead one reply. FDR was not reckless. Those are words only a fiscally conservative would use. He did the right thing at the right time and the people agreed with him.

 

[Accountable]

And why was it reckless? You can't be thinking of spending but instead creating SS because the two decades following WWII were among our most successful economically. The major problem with SS was not its conception, but that every party in power since its conception undermined it by robbing it. Should we shit on the program or those who purposefully ruined it?

Conveniently forgot about Li' Jimmy Carter, huh? Understandable. I have psychological blocks about traumatic times in my history, too.

I want to comment on this OP but can't stick around right now. Yak'll later!

 

[Accountable]

I ran across this wonderful little book, The Politically Incorrect Guide to American History by Thomas E Woods, Jr. it addresses this thread. I'll throw in some quotes to answer Retro's comments.

I heard this interesting comparison the other day; saying that Obama is playing FDR to Bush's Hoover.

Hoover proved to be a rather inept President who did more harm than good, though he had the deck stacked against him with the stock market crashing a mere 8 months into his term. What people don't really realize is that the market had largely recovered from the 1929 crash by 1930, and unemployment had stabilized back down to 6% from it's peak of around 10%. But Hoover, like the end of the Bush administration, pushed for the 1930s version of the TARP bailout funds. To oversimplify, this damaged the economy further and sent us spiraling further into the Great Depression.

Quite right.

Hoover: A "do nothing" president? If only!

Most people believe that Hoover stood by and did nothing as the Depression ravaged the country, and that it was Franklin Roosevelt's vigorous intervention into the economy that finally brought recovery. Nothing could be further from the truth.

First, it's not true that Hoover sat idly by during the Depression. He did plenty -- more than any peacetime president had ever done. Rexford Tugwell, an important figure in FDR's New Deal programs, later acklnowledged, "We didn't admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started." In fact, Hoover's incessant meddling with the economy made the situation worse. He managed to turn the recession in 1929 into the Great Depression. While the economic picture was poor in 1929 and 1930, it was only in 1931, after a year of government intervention, that the situation seriously deteriorated.

Hoover established a Federal Farm Board (FFB) to improve the lot of American farmers. The FFB made loans to far cooperatives so that farmers could keep their crops, particularly wheat and cotton, off the market until their prices rose. Whenever this approach did manage to get prices up, however, farmers gleefully produced more the following yer, making the surplus problem even worse. Eventually the Farm Board authorized, through its Grain Stabilization Corporation, massive purchases of wheat from American farmers at prices well above the world price. Farmers thus sold their wheat to the Grain Stabilization Corporation instead of exporting it. Government farm bureaucrats were sure that by keeping American wheat off the world market, a world shortage of wheat would ensue and foreigners would soon be begging for American wheat. Instead, Canadian and Argentinean wheat producers grabbed America's share of the world market.

Woods goes on to describe tax increases, crop destruction, business bailouts, state government bailouts, etc. "'The businesses he hoped to save,' writes one historian, 'either went bankrupt in the end, after fearful agonies, or were burdened throughout the 1930s by a crushing load of debt.'"

Along comes FDR, who runs on a platform blasting Hoover for out of control, reckless, and extravagant spending. Then after he is sworn into office, spends far more than Hoover could have ever dreamed of in government interventions in an attempt to try and stimulate the economy, only to have all of his efforts fall flat, as the unemployment rate pretty much stayed stagnant. All they had really done is incur a monumental amount of debt... it wasn't until the attack on Pearl Harbor and the subsequent joining of the military by men and women along with the restarting of the American Industrial machine that the economy really got back on track.

One biographer said that there was no one more ignorant of economics than FDR. It showed. FDR knew nothing about how wealth was created. The legislation he called for was a patchwork of absurdities, sometimes at odds with each other, and sometimes even at odds with themselves.

I find it interesting that government intervention is probably a big part of what turned the stock market crash into the great depression. Then FDR did the same thing that Hoover had been doing, only on a bigger scale, hoping for different results.

This of course is a very oversimplified look at everything, because I was mainly trying to contrast Hoover and FDR with Bush and Obama. I think there's a pretty legitimate comparison to them though.

You may be right, especially BHO & FDR.

 

[Accountable]

... it wasn't until the attack on Pearl Harbor and the subsequent joining of the military by men and women along with the restarting of the American Industrial machine that the economy really got back on track.

Woods disagrees.

Did World War II lift America out of the Depression?

... It has become part of the conventional wisdom that World War II was a time of great economic prosperity in the United States, and even that the war rescued the country from the Depression. This is simply not true. If it were, then it might be a good idea to be at war all the time.

...

...[The] average work week in manufacturing increased by seven hours between 1940 and 1944, and by a full 50 percent in bituminous coal mining. And it was more difficult, and sometimes even impossible, to acquire the goods people needed. No one during the war could buy a new car, house, or major appliance, since the government had forbidden their production entirely. ... As economist George Reisman explains:

People believed they were prosperous in World War II because they were piling up large amounts of unspendable income -- in the form of paper money and government bonds. They confused this accumulation of paper assets with real wealth. Incredibly, most economic statisticians and historians make the same error when they measure the standard of living of World War II by the largely unspendable "national income" of the period.
​

Needless to say, this is not prosperity. What finally brought the Depression to an end was neither economic legislation nor World War II. Instead, it was the return to normal conditions following the war and the removal of the uncertainty that had haunted business during the FDR years. Prosperity would have returned much sooner had it not been for the destructive and foolinsh policies of Hoover and Roosevelt.

 

[retro]

Woods disagrees.

I see that point... though both could be correct if you think about it. Without WWII do you think that FDR would've stopped his government interventions and ill-fated attempts to restart the economy? That artificial wealth that people acquired gave the sense that the economy was back on track again, which allowed them to back off the programs initiated prior to the United States getting involved in the war.

I realize this is a rough analogy and might not make perfect sense. But imagine that you're driving down a hill with your car in neutral, then you get to the bottom of the hill and you continue at roughly the same rate of speed, so you put the car back into gear again and continue on. The artificial wealth allowed the appearance of the economy being on track again, so they backed off all of the programs they were pushing. While the coasting down the hill gave the other industries that had crashed, like banks, a chance to recover... utilizing that artificial prosperity. I'm not sure if that makes perfect sense... but perhaps someone understands the point I'm getting at.

 

[Accountable]

Well, bro, you took such exception when I was arguing against you that FDR was not reckless. Maybe I just jumped ahead one reply. FDR was not reckless. Those are words only a fiscally conservative would use. He did the right thing at the right time and the people agreed with him.

He threw every conceivable government program that they could think of at the wall to see what would stick. Some worked. Most didn't. When the SCOTUS gave him trouble he tried to load it with his own judges. That didn't work so he had to wait for them to die off or retire so that he could do it anyway. Then they wiped their asses with our beloved Constitution & we suffer with the results to this day.

Consider the case of Wickard v. Filburn (1942). The Court ruled that a farmer growing wheat for his own use on his own property fell under the heading of "interstate commerce" and was subject to federal regulation under the Constitution's interstate commerce clause. Homegrown wheat, in the Court's words, "supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Homegrown wheat in this sense competes with wheat in commerce." So someone who supplies himself with wheat, since he is not purchasing wheat on the market, therefore affects interstate commerce. Under this standard, anything would qualify as interstate commerce -- and therefore be subject to federal regulatoin.

The court became an instrument for justifying federal action and for reducing the states to a condition of subordination. In Currin v. Wallace (1939) the Court suggested that the federal government could extend its power over virtually any area that might contribute to the "general welfare."

 

[Accountable]

I see that point... though both could be correct if you think about it. Without WWII do you think that FDR would've stopped his government interventions and ill-fated attempts to restart the economy? That artificial wealth that people acquired gave the sense that the economy was back on track again, which allowed them to back off the programs initiated prior to the United States getting involved in the war.

I realize this is a rough analogy and might not make perfect sense. But imagine that you're driving down a hill with your car in neutral, then you get to the bottom of the hill and you continue at roughly the same rate of speed, so you put the car back into gear again and continue on. The artificial wealth allowed the appearance of the economy being on track again, so they backed off all of the programs they were pushing. While the coasting down the hill gave the other industries that had crashed, like banks, a chance to recover... utilizing that artificial prosperity. I'm not sure if that makes perfect sense... but perhaps someone understands the point I'm getting at.

It's a good analogy, but remember FDR died in office. There's no telling what damage he might have wreaked. But it does make you think about the parallels with Obama. No war is going to fake any prosperity for us, so how long are we going to let him & Congress fuck us over? Right up until Inauguration Day 2017?

 

[Minor Axis]

I heard this interesting comparison the other day; saying that Obama is playing FDR to Bush's Hoover.

Hoover proved to be a rather inept President who did more harm than good, though he had the deck stacked against him with the stock market crashing a mere 8 months into his term. What people don't really realize is that the market had largely recovered from the 1929 crash by 1930, and unemployment had stabilized back down to 6% from it's peak of around 10%. But Hoover, like the end of the Bush administration, pushed for the 1930s version of the TARP bailout funds. To oversimplify, this damaged the economy further and sent us spiraling further into the Great Depression.

Along comes FDR, who runs on a platform blasting Hoover for out of control, reckless, and extravagant spending. Then after he is sworn into office, spends far more than Hoover could have ever dreamed of in government interventions in an attempt to try and stimulate the economy, only to have all of his efforts fall flat, as the unemployment rate pretty much stayed stagnant. All they had really done is incur a monumental amount of debt... it wasn't until the attack on Pearl Harbor and the subsequent joining of the military by men and women along with the restarting of the American Industrial machine that the economy really got back on track.

I find it interesting that government intervention is probably a big part of what turned the stock market crash into the great depression. Then FDR did the same thing that Hoover had been doing, only on a bigger scale, hoping for different results.

This of course is a very oversimplified look at everything, because I was mainly trying to contrast Hoover and FDR with Bush and Obama. I think there's a pretty legitimate comparison to them though.

You might find the following article interesting: The Book of Jobs- Vanity Fair an article that discusses the parallels between the Great Depression and the Depression of 2008.

The article mentions parallels between the both depressions and concludes that underlying economic weakness is what is behind both events and that monetary policy alone is not enough to fix the situation.

In 1931: it was the transition from a primarily agriculture economy to an manufacturing economy with huge gains in agriculture efficiency causing in essence a bubble followed by plummeting prices due to agriculture overproduction. In 2008 it is the transition from a manufacturing to a service economy. Yes I would argue that this transition has been foisted on us by large multinational corporations seeking low wages over seas, however the article does not go there. Instead it focuses on the solution.

In 1931, the Great Depression was not corrected until the country geared up for war, in other words government spending, a Keynesian stimulus solved the problem, not monetary policy or propping up banks. It also makes note that spending money on infrastructure would have been better use of the spending, but a war sufficed. The conclusion of the article that is what is required today.

The Agriculture Adjustment Act, F.D.R.’s farm program, which was designed to raise prices by cutting back on production, may have eased the situation somewhat, at the margins. But it was not until government spending soared in preparation for global war that America started to emerge from the Depression. It is important to grasp this simple truth: it was government spending—a Keynesian stimulus, not any correction of monetary policy or any revival of the banking system—that brought about recovery. The long-run prospects for the economy would, of course, have been even better if more of the money had been spent on investments in education, technology, and infrastructure rather than munitions, but even so, the strong public spending more than offset the weaknesses in private spending.

What we need to do instead is embark on a massive investment program—as we did, virtually by accident, 80 years ago—that will increase our productivity for years to come, and will also increase employment now. This public investment, and the resultant restoration in G.D.P., increases the returns to private investment. Public investments could be directed at improving the quality of life and real productivity—unlike the private-sector investments in financial innovations, which turned out to be more akin to financial weapons of mass destruction.

The private sector by itself won’t, and can’t, undertake structural transformation of the magnitude needed—even if the Fed were to keep interest rates at zero for years to come. The only way it will happen is through a government stimulus designed not to preserve the old economy but to focus instead on creating a new one. We have to transition out of manufacturing and into services that people want—into productive activities that increase living standards, not those that increase risk and inequality. To that end, there are many high-return investments we can make. Education is a crucial one—a highly educated population is a fundamental driver of economic growth. Support is needed for basic research. Government investment in earlier decades—for instance, to develop the Internet and biotechnology—helped fuel economic growth. Without investment in basic research, what will fuel the next spurt of innovation? Meanwhile, the states could certainly use federal help in closing budget shortfalls. Long-term economic growth at our current rates of resource consumption is impossible, so funding research, skilled technicians, and initiatives for cleaner and more efficient energy production will not only help us out of the recession but also build a robust economy for decades. Finally, our decaying infrastructure, from roads and railroads to levees and power plants, is a prime target for profitable investment.

 

[Accountable]

The gov't was spending like crazy before the war. Why didn't it work then?

I haven't read it recently, so I can't point you to the books I got the information from, but some historians and economists point out that our involvement in WWII did a couple of things people don't acknowledge because it wasn't a gov't program.

• It forced people to save. Soldiers were kinda busy fighting and so didn't spend their paychecks. At home, rationing meant that even if you did have money to spend, there wasn't always something to spend it on, so cash piled up. The result at the end of the war was that people had a pile of disposable income and a reason to celebrate. It would be really hard to design a gov't program to bring about such an effect.
• The war reduced our workforce by 400,000 people. That would be like losing over 1 million working adult Americans today. That would really improve our employment numbers.

In 1920 we had a depression, but nobody ever talks about it. Here's the Wiki writeup:

The 1921 recession began a mere 10 months after the post-World War I recession, as the economy continued working through the shift to a peacetime economy. The recession was short, but extremely painful. The year 1920 was the single most deflationary year in American history; production, however, did not fall as much as might be expected from the deflation. GNP may have declined between 2.5 and 7 percent, even as wholesale prices declined by 36.8%. The economy had a strong recovery following the recession.

No Keynsian spending program. The depression only lasted 18 months followed by a strong recovery.

 

[retro]

Holy gravedig batman. I saw the title of the thread on the front page and thought, "hey, I posted a thread about that like a year and a half ago". So I went to look for it and realized that it was the same thread. :24:

 

[Minor Axis]

The gov't was spending like crazy before the war. Why didn't it work then?

I believe the money spent in previous wars was spread out around the economy, not focused on make your buddy contractors rich. Look at WWII, tons of people working in factories. Not today.