“And we know how that worked out.
Additional economic assistance is the only thing that can keep the U.S. economy from falling into a second Great Depression, and with interest rates near zero, the government has all the fiscal capacity it needs to borrow the trillions necessary to relieve the pain. But Congress, or rather congressional Republicans, won’t budge. After backing the $2 trillion CARES Act in March, they believe they’ve done enough for now.
“You’ve seen the talk from both sides about acting,” Mitch McConnell, the Senate majority leader, said last month, “but my goal from the beginning of this, given the extraordinary numbers that we’re racking up to the national debt, is that we need to be as cautious as we can be.” Senator Lindsey Graham of South Carolina echoed this sentiment. “The real stimulus that’s going to change the trajectory that we’re on is going to be the economy, not government checks,” he said. Senator John Kennedy of Louisiana, also a Republican, was less diplomatic about his opposition to another round of assistance that would increase state and local government funding. “Well people in hell want ice water too,” he told reporters.
And President Trump appears unmoved by the prospect of economic devastation, except insofar as it affects his chances for re-election. The White House haltedtalks with Congress over any further stimulus.
All of this — the passivity, the indifference, the refusal to embrace the tools at hand for ideological reasons — is reminiscent of Herbert Hoover, who also presided over a catastrophic economic downturn, the mismanagement of which plunged the United States into a crisis that tore at the seams of American society.
Popular memory of the Great Depression is that Hoover did little to avert catastrophe or prevent suffering, a view captured at the time by Senator Robert Wagner of New York, who claimed the president had “clung to the timeworn Republican policy: to do nothing and when the pressure becomes irresistible to do as little as possible.”
But that’s not quite right. “Sitting and waiting,” the historian Robert S. McElvaine noted in “The Great Depression: America, 1929-1941,” “were alien to Herbert Hoover’s temperament. His great confidence in humankind’s abilities — and his own — led him to believe that action could mitigate the effects of an economic downturn.” And so, within weeks of the October 1929 stock market crash, the president was meeting with leaders of business and industry in an effort to protect wages and boost consumption, so that Americans would spend the nation back into growth.
At the same time, Hoover was a staunch conservative, who opposed government intervention on principle. The historian Joan Hoff Wilson reports that after reluctantly backing a modest public works and relief program (“$2 billion for public works and $300 million for direct loans to the states ‘to be used in furnishing relief and work relief to needy and distressed people in relieving the hardships resulting from unemployment.’”), Hoover told a friend that all such emergency legislation had to be repealed to prevent the country from being “plunged into socialism and collectivism with its destruction of human liberty which pursuance of those measures are bringing.”
The American people, Hoover insisted, didn’t need aid. They needed confidence. The day after the stock market crash, he told reporters that “The fundamental business of the country, that is the production and distribution of commodities, is on a sound and prosperous basis.” The next month, he declared that “Any lack of confidence in the economic future or basic strength of business in the United States is foolish. Our national capacity for hard work and intelligent cooperation is ample guarantee of the future.”
The next year, as joblessness began to rise into double digits, Hoover would insist that “The income of a large part of our people is not reduced by the depression” but “is affected by unnecessary fears and pessimism.” And on the anniversary of the stock market crash, the historian Eric Rauchway points out, Hoover would reject calls to take action against unemployment. “No special session is necessary to deal with employment,” he said. “The sense of voluntary organization and community spirit in the American people have not vanished.”
By 1931, Hoover was telling reporters that “We cannot legislate ourselves out of a world economic depression” and rebuking Congress for its attempts to pass relief. “We cannot thus squander ourselves into prosperity,” he said.
It is true that at the time virtually no one in government was prepared to do what was needed to end the Depression. Even Hoover’s successor, Franklin Roosevelt, would hesitate to embrace the sustained government spending needed to revive the economy. The intellectual architecture for that kind of action just didn’t exist (John Maynard Keynes had not yet made his impact on American policymaking). Still Hoover was not without tools; he could have taken steps to cushion the blow of the crash and relieve suffering for millions of Americans. But he refused, captive to a rigid, unyielding view of the world around him.
What was true then is true now. The Republican Party seems ready to let the country descend into depression rather than do what’s needed, from aid to families to help for states, to sustain the economy as the country struggles against a deadly disease. The plan, such that it exists, is to “reopen” the economy — justified with Hoover-esque rhetoric about the “American way of life” — and immunize employers against legal action should their employees fall ill.
It would be nearly four years after the stock market crash in 1929 before the federal government, under Roosevelt’s administration, began to do anything to meaningfully alleviate the pain of the Great Depression. By then, nearly a quarter of working Americans were unemployed and tens of millions of people struggled to find food and shelter.
Not only are we not that far gone, but we have a chance to remove our modern-day Hoovers before they can lead the country to further disaster. With luck, we’ll make good on that opportunity in November.“