Hooverism in the Modern Era
Bush is getting closer and closer to the Hoover Trifecta:
1. Presiding over a net loss of jobs? Check.
2. Stock market crash? Check.
3. Global trade war leading to a Great Depression? (Instigated, or at least exacerbated by Hoover’s signing of the Smoot-Hawley Tariff Act of 1930) Based on Kash’s last two posts, on the way.
Here’s Robert Samuelson describing the Great Depression:
It is hard for those who did not live through it to grasp the full force of the worldwide depression. Between 1930 and 1939 U.S. unemployment averaged 18.2 percent. The economy’s output of goods and services (gross national product) declined 30 percent between 1929 and 1933 and recovered to the 1929 level only in 1939. Prices of almost everything (farm products, raw materials, industrial goods, stocks) fell dramatically. Farm prices, for instance, dropped 51 percent from 1929 to 1933. World trade shriveled: between 1929 and 1933 it shrank 65 percent in dollar value and 25 percent in unit volume. Most nations suffered. In 1932 Britain’s unemployment was 17.6 percent. Germany’s depression hastened the rise of Hitler and, thereby, contributed to World War II.
Now, do I really expect Bush’s anti-trade policies, or even a full-blown trade war, to spark a second Great Depression? No. We have many counter-cyclical measures now that did not exist last time. But it’s still a step — and a big one at that — in the wrong direction.