Friday, July 10, 2009

Revisiting Hoover

I've written before about how the common image of Herbert Hoover as a practitioner of laissez-faire economics is based far more on myth than reality, having raised income, estate and corporate taxes, introducing a "check tax", signed the Smoot-Hawley tariff bill and called for a congressional investigation of the New York Stock Exchange during his tenure in the Oval Office.

This morning I discovered one more piece of information that takes another brick out of the laissez-faire edifice. Apparently early on in his administration Hoover passed the Agricultural Marketing Act that established the Federal Farm Board with a revolving fund of $500 million ($6.2 billion in 2008 dollars). As wikipedia says:
The original act was sponsored by Hoover in an attempt to stop the downward spiral of crop prices by seeking to buy, sell and store agricultural surpluses or by generously lending money to farm organizations. The Act was not beneficial; as the inflation ran deeper than the value of the money, it started sinking and the losses of the farmers were getting bigger and bigger.
No wonder that FDR blasted Hoover for "extravagant and reckless spending" and a desire to "center control of everything in Washington as rapidly as possible."

Update: Much more here.

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