Some myths never die. I sent this letter yesterday to the New York Times; it addresses only one of the many flaws in David Leonhardt’s article:
Suggesting that President Herbert Hoover followed laissez-faire policies, David Leonhart writes that “we can’t rerun the past year with a Hooverite economic strategy” to see what its outcome would have been (“Theory and Morality in the New Economy,” August 19).
No need to do so, for the past year was run “with a Hooverite economic strategy.” From Pres. Hoover’s 52 percent increase in government spending to his running the third-largest budget deficit then in U.S. history – and from his creation of the Reconstruction Finance Corporation to his signing of the Federal Home Loan Bank Act – Hoover’s hyperactive intervention nearly 80 years ago was not very different from Bush’s and Obama’s hyperactive interventions today. Hoover himself, campaigning for re-election in October 1932, bragged of rejecting the advice of “reactionary economists [who] urged that we should allow the liquidation to take its course until it had found its own bottom.”
Donald J. Boudreaux