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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 [2],” 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 [3], 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.”
Sincerely,
Donald J. Boudreaux