The Myth of Laissez-Faire Herbert Hoover

The classic high school textbook has it all wrong: Herbert Hoover was NOT a non-interventionist who made the economy worse by doing nothing.

Well, it's not completely wrong. He did make the economy worse, but not because he was any kind of libertarian.

It’s beyond me how liberals have been able to rewrite this story. The thought that Herbert Hoover was conservative at all is entirely a myth.

In fact, he was a member of the Progressive Party in 1912 and supported Theodore Roosevelt for President. Hoover was head of the U.S. Food Administration under Democratic President Woodrow Wilson, who was also a Progressive.

After returning home from Russia in 1920, where he had helped provide food to millions of starving Bolsheviks, many Democratic Party leaders supported Hoover for President. Franklin Roosevelt said at the time of Hoover, “There could be no finer one.” President Wilson desired Hoover to succeed him.

Despite the offers, Herbert Hoover ran for president unsuccessfully as a Republican. He was not a serious contender. Warren Harding ending up winning. Hoover became Secretary of Commerce. He “set out to reconstruct America”, in his own words.

As Secretary of Commerce, Hoover urged President Harding to create a Conference on Unemployment. Most of his plans could not be realized until he himself became president, but he was able to reduce workday hours and secure passage of the Railway Labor act.

Hoover again sought the presidency in 1928. Appealing to social conservatives (he was pro-Prohibition, a racist, and his opponent was Catholic), he defeated Alfred Smith with a stunning Electoral College victory off 444-87.

During his inauguration speech, Hoover said,

“Given the chance to go forward with the policies of the last eight years, we shall soon with the help of God, be in sight of the day when poverty will be banished from this nation.”

Just months before the Stock Market Crash of 1929, President Hoover more famously said, “We in America are nearer to the final triumph over poverty than ever before in the history of any land.”

Does any of this sound laissez-faire, conservative, libertarian, or constitutionalist?

In his autobiography, The Memoirs of Herbert Hoover: The Great Depression, 1929-1941, Hoover writes of the economic crisis:

“No President before had ever believed there was a governmental responsibility in such cases. No matter what the urging on previous occasions, Presidents steadfastly had maintained that the Federal government was apart from such eruptions; they had always been left to blow themselves out. Presidents Van Buren, Grant, Cleveland, and Theodore Roosevelt had remained aloof…
“Because of this lack of governmental experience, therefore, we had to pioneer a new field. As a matter of fact there was little economic knowledge to guide us.”

Rejecting what he called Treasury Secretary Andrew Mellon’s “leave-it-alone-policy”, today’s historical analysis contends that his pro-labor policies of wage controls and job sharing "accounted for two-thirds of the drop in the nation’s gross domestic product over the two years that followed, causing what might otherwise have been a bad recession to slip into the Great Depression.”

Hoover had many “solutions” for the economy.

International trade was crippled with the Smoot-Hawley Tariff Act in 1930. Tariffs were increased on thousands of imported goods. More than a thousand economists petitioned the president to veto the bill.

In 1931, Hoover signed the Davis-Beacon Act. Local governments were required to pay union wages on public works projects. At a time when wages had to be lowered in order to prevent more unemployment, Hoover kept wages artificially high. By the end of the year, unemployment was already 16%.

Courts are prevented from issuing injunctions against union strikes by the Norris-LaGuardia Act in 1932.

As the Depression became global and American unemployment reached 25%, Hoover attempted to balance the budget through the Revenue Act of 1932. Taxes were raised on all income brackets, but the top income bracket saw increases from 24% to 63%. The tax on net income of corporations was also raised from 12 to 13.5%, while other corporate taxes went up 15%. The estate tax was doubled. Bank checks were taxed.

Despite his unpopularity, Hoover was nominated to run for a second term in 1932. During his acceptance speech for the Republican nomination he said,

We might have done nothing. That would have been utter ruin. Instead, we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put it into action.

Now does this sound conservative?

During the 1932 campaign, FDR blasted his Republican opponent for “reckless and extravagant” spending, saying Hoover wanted to “center control of everything in Washington as rapidly as possible.” John Nance Gardner, the nominee for vice president, actually attacked Republicans for “leading the country down the path of socialism.”

Later, an adviser of FDR said of Hoover, “practically the whole New Deal was extrapolated from programs Hoover started.”

The above caption from the above cartoon describes the election this way:

Franklin Delano Roosevelt to Herbert Hoover: Just leave them Herb. I’ll do it all after March 4.

(March 4th was Inauguration Day until

How on earth have liberals been able to transform Herbert Hoover into a laissez-faire conservative?



*The Railway Labor Act was described by Murray Rothbard as “America’s first permanent incursion of the Federal government into labor-management operations.”

**Andrew Mellon's policies are what later gave rise to “Reaganomics. Mellon is still considered by many to be the greatest Secretary of the Treasury in American history. Mellon paid off the some of the World War I debt by lowering taxes, which stimulated the economy, producing more revenue.


Images used in the post above were found at 'insert link'. These images are not my own. I am using these copyrighted images under the fair use of copyrighted works by providing comment and critique.