Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
THEY DON'T RING THE BELL AT THE CRPTO MARKET TOP! - 20th Dec 24
CEREBUS IPO NVIDIA KILLER? - 18th Dec 24
Nvidia Stock 5X to 30X - 18th Dec 24
LRCX Stock Split - 18th Dec 24
Stock Market Expected Trend Forecast - 18th Dec 24
Silver’s Evolving Market: Bright Prospects and Lingering Challenges - 18th Dec 24
Extreme Levels of Work-for-Gold Ratio - 18th Dec 24
Tesla $460, Bitcoin $107k, S&P 6080 - The Pump Continues! - 16th Dec 24
Stock Market Risk to the Upside! S&P 7000 Forecast 2025 - 15th Dec 24
Stock Market 2025 Mid Decade Year - 15th Dec 24
Sheffield Christmas Market 2024 Is a Building Site - 15th Dec 24
Got Copper or Gold Miners? Watch Out - 15th Dec 24
Republican vs Democrat Presidents and the Stock Market - 13th Dec 24
Stock Market Up 8 Out of First 9 months - 13th Dec 24
What Does a Strong Sept Mean for the Stock Market? - 13th Dec 24
Is Trump the Most Pro-Stock Market President Ever? - 13th Dec 24
Interest Rates, Unemployment and the SPX - 13th Dec 24
Fed Balance Sheet Continues To Decline - 13th Dec 24
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Barack Obama and his Fellow Democrats Adopt Hoovernomics

Politics / US Politics Jul 28, 2008 - 05:58 PM GMT

By: Gerard_Jackson

Politics It's true! The Democrats are now promoting Hoovernomics as presented by the economically illiterate Obama as the only way to create growth.. The brilliant Obama and his fellow imbeciles in Congress have declared that increased government spending and a massive tax rise is just what America needs. This is really funny because that's what the hapless Hoover also reckoned.


In a vain effort to counter the depression the Hoover administration raised spending with the result that by 1931 the government had gone from surplus in 1929 to $2 billion deficit, a huge some in those days. Despite this 'counter-recession' spending unemployment rapidly grew. Undeterred Hoover gave the country the December 1932 Revenue Act. This was one of the largest peacetime tax hikes in the country's history, ensuring that the range and height of taxes rapidly expanded. The following year unemployment jumped to about 25 per cent. So what makes Obama think this policy would work for him?

The truth is, Obama — like the rest of the Democrats in Congress — is as ignorant of history as he is of economics. Showing just how smart he is — even without a teleprompter — he would impose tariffs, just as Hoover did. Perhaps he would be so kind as to explain to his fellow Americans — not that I see Obama and most of the Congressional Democrats as real Americans — why this would work now while the same policy implemented by Hoover in 1930 (the Smoot-Hawley tariff) greatly aggravated the depression?

Very few Americans know that all of Hoover's ramshackle economic policies were taken on board with a vengeance by Roosevelt, thus giving the US the longest and deepest depression in its history.

The Democrats piously complain about the conditions of the poor and "falling wages". Unlike the Dems' phony compassion Hoover was genuinely concerned about wage rates to the extent that he refused to allow them to fall. He detested "orthodox" thinking on wages, believing instead that living standards were a product of high real wages. He made his rejection of the "old economics" clear in a speech on 12 May 1926:

There a marked change.. . not so many years ago — the employer considered it was in his interest to use the opportunities of unemployment and immigration to lower wages irrespective of other considerations. The lowest wages and longest hours were then conceived as the means to obtain lowest production costs and largest profits. . . . But we are a long way on the road to conceptions. The very essence of production is high wages and low prices, because it depends upon a widening range of consumption, only to be obtained from the purchasing-power of high real wages and increased standard of living. . . (Herbert Hoover, The Memoirs of Herbert Hoover , New York: Macmillan, 1952, p. 108).

Hoover's economic fallacies turned what would have been a sharp turn-down* followed by the usual rapid recovery in to the biggest economic tragedy in American history and one that the country is still paying for. If it were otherwise that charlatan Obama would be seen as the joke he really is

It is a sad irony and a deep reflection on American education that the man who laid the foundations for Roosevelt's New Deal is still labelled by academics and journalists as an advocate of failed free-market policies. Readers should bear this in mind next time they encounter a so-called economic arguments by vicious economic illiterates like the mendacious Richard Cohen, the insufferable Thomas Franks and the self-righteous E.J. Dionne.

*The 1919-20 boom followed by the sharpest and fastest depression in US history. Wholesale prices peaked in May 1920 and then plummeted by 56 per cent, levelling out in June 1921.

By Gerard Jackson
BrookesNews.Com

Gerard Jackson is Brookes' economics editor.

Copyright © 2008 Gerard Jackson

Gerard Jackson Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in