Opinion: You Were Taught Wrong about Herbert Hoover
Most students that attended high school or university eventually end up taking a U.S. history course. With Paul Krugman publishing textbooks, Democrat professors outnumbering Republicans roughly 10 to 1 according to The Washington Times, and the National Association of Scholars reporting more than 35% of universities having no registered Republican professors at all, it can be pretty easy to have a politically skewed view on economics and history.
Limited government and the success of open markets have often been dismissed or left out of lessons in modern education. Many students were taught in school while learning about the Great Depression that newly-elected President Herbert Hoover was a staunch free-market capitalist that depended on charity and refrained from utilizing government intervention. This could not be further from the truth. Hoover single-handedly expanded government more than ever before and directly laid the foundations for Franklin Delano Roosevelt’s New Deal programs.
Hoover was inaugurated in March 1929, a little more than half a year before the famous October stock market crash. Hoover was a Republican president, expected to promote fiscal conservatism and free markets. While he has a few quotes about charity and limited government, the president’s actions in response to the 1929 stock plummet reveal a completely different story.
Hoover, in practice, was a government interventionist doing the exact opposite of Austrian economics by raising taxes, imposing trade tariffs and increasing financial regulations. The 31st president is credited with doing very little for the economy, and being the reason why a simple recession mutated into a depression. In reality, Hoover did a lot during his presidency, it’s just inconvenient to acknowledge because it aligns with modern Democrats’ economic views.
Public health service should be as fully organized and as universally incorporated into our governmental system as is public education.Herbert Hoover
Given that the results display worsening conditions, a large part of the biased U.S education system has attempted to shift the narrative away from Hoover’s engaging failed policies and towards the idea of inaction by a registered Republican president. It’s time to delve into the numerous specific economic policies implemented by Hoover in his presidency to expose the truth.
Herbert Hoover increased both regulation and taxes, something Democrats have endorsed time and time again in the last decades. Hoover hiked the top tax bracket from 25 percent to 63 percent of marginal income, taxing the rich on income more than ever before. Even if many didn’t actually pay at this tax rate, these new laws complicated business and simply diminished productivity by adding a focus on taxes.
There are only three ways to meet the unpaid bills of a nation. The first is taxation. The second is repudiation. The third is inflation.Herbert Hoover
Furthermore, under Hoover’s presidency, the estate tax was doubled, corporate taxes were raised by 10 percent, and a 2 cent “check tax” was imposed on all bank checks. These new and increased taxes restricted monetary flow during the recession while increasing the financial burden on citizens affected by these taxes. People with less saved or disposable income were hurt more than ever before under these new policies.
Outside of these constricting taxes, Hoover involved the government in business by passing the Federal Home Loan Bank Act, approving the Glass-Steagall regulation, forming the Reconstruction Finance Corporation and artificially promoting price levels to not change. Most of this action was implemented following the stock market crash, and it is clear Hoover’s administration was very hands-on in the domestic economy.
Perhaps the most impactful policy that came about under Hoover’s presidency is the Smoot-Hawley Tariff Act of 1930. This combination of sweeping tariffs added taxes on over 20,000 goods and involved government in trade at unprecedented levels. Hoover signed off on these tariffs despite hundreds of economists advising against them.
Both US imports and exports decreased by over 60 percent following these tariffs; it remains as one of the largest and most significant tariffs passed in U.S. history. These tariffs remained throughout the duration of Hoover’s term. Protectionism is the antithesis of free market trade ideology, and the government enacted protectionist policies under Hoover.
As far as bureaucracy goes, Herbert Hoover approximately doubled federal spending in his four years as President from about $3.1 million to about $6 million. Hoover also increased the public sector from 579,559 federal employees to 603,587 employees, which cost the taxpayers around $1 billion more from combined salaries. Hoover issued 968 executive orders, more than the last three modern US presidents combined.
While the crash only took place six months ago, I am convinced we have now passed the worst, and with continued unity of effort we shall rapidly recover.Herbert Hoover
Outside of economics, Hoover notably failed to handle the “Bonus Army” and deported over 400,000 people with the Mexican Repatriation Act. Herbert Hoover should go down as one of the worst presidents of all time as he expanded government power, restricted individual liberties, hurt ease of business, and left lasting detrimental economic ideas that still affect millions of lives.
Now, the growing general consensus amongst economists is that Hoover’s policies helped create the Great Depression as we know it today. Regardless of opinions on the Great Depression’s exacerbation, it’s time for schools and educators to properly reflect history and truth about the 31st President’s actions: Hoover was a strong interventionist in the economy and imposed hundreds of significant pieces of legislation that restricted economic freedom and would be supported by the vast majority of American Democrats, Socialists and Green Party members today.