Thursday, March 20, 2008

Political Heirs of Hoover

In a piece about how we should be more optimistic about the economy, Larry Kudlow gives out a nice little history lesson about the legacy of Herbert Hoover (and, by association, FDR, who merely extended Hoover's policies in the New Deal).

Home prices must adjust lower to end the housing downturn. And it’s precisely these lower prices that will allow young families to afford new homes. Prices may fall, but homes don’t go away. Markets, not government, are the best way to sort this out.

Bush gets all this. And yet he’s attacked for his free-market moorings. Liberal columnist Maureen Dowd says he’s “plum loco.” She and Sen. Charles Schumer call him the new Herbert Hoover.

But let’s take a closer look.

It was Hoover who signed the Smoot-Hawley trade-protectionism act and overturned the Coolidge-Mellon tax cuts. These disastrous measures — along with monetary contraction from a fledgling Federal Reserve — turned a recession into a depression. FDR didn’t help matters, either. His misbegotten tax hikes on successful earners and businesses, and his alphabet agencies to control the industrial and farming sectors, extended the depression and held unemployment near 20 percent.

Today, it’s the Hill-Bama Democrats who want to raise taxes on successful producers. And they want to turn protectionist by reopening NAFTA and stopping any new open-trade treaties. Schumer himself has spent years bashing China, threatening the nation with huge tariffs if its currency policies don’t conform to demands.

If anyone has resurrected the party of Hoover, it’s today’s Democrats. They’ve adopted pessimism as their national pastime, and want us to believe we’re already in a long and deep recession.

Until the days of the "progressive" Hoover, et al, presidents did nothing to interfere in market downturns. As a result of this do-nothingness, the free market worked out its own kinks. The minute these progressives tried to "fix" the free market, the country got hurled straight into the Great Depression.

Nowadays people expect, even demand, that the president and congress lurch into action when anything goes wrong--especially when it's the economy. While this seems logical and makes people feel better, it really just ends up hurting productive citizens and rewarding unproductive ones. This sort of thing is bad for everyone. We need to support more candidates who pledge to do nothing!

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