Economic Crisis: Lessons from 1932

Good reading. ROFL
Thanks for retrieving these nuggets.

The only thing we have to fear is fear itself and a government that tries to help!

This reminds me of how incredibly disingenuous Brad DeLong is for throwing around the standard boilerplate about Hoover. He knows better.

Its probably old hat to readers on this blog, but it bears repeating: Hoover was not a 'do-nothing' president. He did some stuff, FDR campaigned against him complaining about that stuff, and then FDR won and did double and triple that same stuff.

How about the follow up to your midterm Q?

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Bryan,

Yesterday Arnold asked, "Why does a recession show up as unemployment, rather than, say, lower wages at full employment?"

Today, you quote Hoover as saying, "For the first time in the history of depression, dividends, profits, and the cost of living, have been reduced before wages have suffered."

That suggests that labor markets used to adjust wages but by the time the 30's rolled around they didn't anymore.

Is that correct? If so, what changed?

With a referendum of AEA members, Milton Friedman and his supporters (that would include me) would lose by a lot. I mean, the masses are stupid, but economists aren't a shining beacon of useful policy prescriptions in these 'dark times'.

But, at least we can read Hoover, at laugh at the irony, considering how he is caricatured in history books and by journalists.

And you believe he was singularly successful in bringing this about through his efforts? Seriously? Now who is being foolish? He certainly made many errors, most of which were conventional wisdom of the time such as balancing the budget, but mostly he was ineffectual.

This is excellent! You had me believing that quote was in regard to the recent bailout. History really does repeat itself.