Opponents of laissez-faire capitalism have concocted a myth about Herbert Hoover that is essential to their narrative about the Depression, namely that he was a firm believer in minimal government. As Don Boudreaux shows in this letter (as so often the case, correcting errors by Paul Krugman), that just isn’t so.
Editor, The New York Times
620 Eighth Avenue
New York, NY 10018
To the Editor:
Paul Krugman writes that "In early 2009, John Boehner, now the speaker of the
House, was widely and rightly mocked for declaring that since families were
suffering, the government should tighten its own belt. That’s Herbert Hoover
economics, and it’s as wrong now as it was in the 1930s" ("The Forgotten
Millions," March 2011). Whether this economics is wrong or right, Mr. Krugman
is wrong to repeat the myth that Herbert Hoover reduced - or even reined in the
growth of - government spending.
From 1924 to 1928 Uncle Sam's real per-capita spending fell by 4.3 percent. But
this spending rose significantly during Hoover's term in the White House. From
1928 to 1929 real per-capita spending rose by 4.7 percent; from 1929-30 by 8.0
percent; from 1930-31 by 17.2 percent; and from 1931-32 by 15.8 percent. (This
spending rose by another 28.4 percent from 1932-33.) The overall increase in
real per-capita spending from 1928 to 1932 was a whopping 53.5 percent. Real
per-capita spending excluding outlays for defense and interest on government
debt increased during Hoover's years in office even more dramatically,
skyrocketing by 130 percent.*
Belt-tightening indeed! - of a sort. By bloating Uncle Sam's girth, Herbert
Hoover's policies caused Uncle Sam's belly to press more tightly against his
belt. Before long, that belt's buckle broke.
Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
