Herbert Hoover knew how to protect employment and wages

[cthulu2016]

In 1930 Hoover called heads of major corporations to the White House and asked them to voluntarily promise not lay people off or cut wages, even if that meant reducing their profits.

They all promised they would do just that, and everyone got their picture in the paper.

And that is why the depression never happened.

Actually, they kept their promise until it became absolutely inconvenient. The really big wage cuts started in 1931.


Voluntary corporate responsibility really was the heart of Hoover's plan. Call all your fat-cat buddies over for drinks and say, "Hey guys, let's not have a depression, okay?"



In fairness, he did also favor commencing some big public works projects, but there were not nearly enough shovel-ready projects to make a dent. Even in 1930 dollars $50 or $100 million probably wasn't going to do much to stem the Great Depression. The Interior Department's Reclamation Bureau had the largest works budget, and it was only $150 million, so even doubling that wouldn't be so much. And there were nowhere near an additional $150 million in projects. Boulder Dam was bid at a hair under $50 million.

Speaking of BOULDER DAM (not Hoover fricking dam, no matter what the do-nothing congress of 1947 had to say about it), jaws around the nation hit the floor when the Interior dept announced the Boulder dam project was being renamed Hoover dam. First, you don't do that with a sitting president. Second, you don't name things for yourself. Third, Hoover had opposed the dam because government production of electricity was, to his mind, socialism.

He green-lighted the dam because it was by far the largest public works project on the table, having been passed by congress.

(And some credit is due for green-lighting a labor intensive project over his own ideological objections.)

[JohnnyRingo]

1. True that...

From his Wikki entry:

Hoover had long been a proponent of the concept that public-private cooperation was the way to achieve high long-term growth. Hoover feared that too much intervention or coercion by the government would destroy individuality and self-reliance, which he considered to be important American values. Both his ideals and the economy were put to the test with the onset of the Great Depression.

Although Hoover is regularly criticized for his laissez-faire approach to the Depression, in his memoirs, Hoover claims that he rejected Treasury Secretary Andrew Mellon's suggested "leave-it-alone" approach, and called many business leaders to Washington to urge them not to lay off workers or cut wages.

After re-reading Hoover's Wikki, I realized much of the text could be transfered directly to Romney's page with little editing. If it weren't for Ronald Reagan, Republicans would probably still be holding Hoover up as a staunch symbol of party ideals.

[Wounded Bear]

2. That is essentially the conservative strategy in all things....

Regulation? Let them regulate themselves.

Pollution? Companies will do the right thing.

Wages? Let the "market" decide.

In fact, most pressures on any free market-especially capitalist markets-will drive employers to lower wages, more pollution because it's cheaper to do it that way, and no regulation because liberals "hate them for their freedoms."

History shows that unregulated free markets will descend into monopoly and destroy resources, often at the cost of the society they operate in.

[Igel]

3. He also engaged in "growth" budgets.

He ran a deficit the last couple of years. FDR's first budget was less "growth" and more "austerity" by comparison, and seldom did FDR's budgets run a greater deficit in terms of GDP.

People like to confuse all the data with all the data they want to see. All people. (Which makes me wonder what I'm overlooking, to be honest. Step 1 in elementary critical thinking.)

[cthulu2016]

4. Both things are true

For the first two years he did little.

For the second two years he did more.

The 1920 featured three sharp but short recessions and he, along with a lot of other people, assumed the one starting in 1929 would also be sharp but quickly self-correcting.

By mid-1931 became obvious to all that something different was happening. US Steel, I think it was, was the first to break the pledge, announcing 10% pay reductions.

There is indeed a lot of mythology on both sides of the Hoover-FDR changeover.

Hoover was, however, a bad person in the way arch-conservatives tend to be bad people.

It is funny that even a serious conservative (I'd say Coolidge-lite) looked at the economy and said, "We need government stimulus. Quick, start some big labor intensive public works projects."

Hoover was to the left of the current Republican Party in that respect.