Herbert Hoover's New Deal

The standard American mythological explanation for the roaring 20's and the Great Depression is something along the lines of capitalism got rolling along at a crazy pace, shot way past what was sustainable, then the economy crashed. Sometimes people mention the Smoot-Hawley tarriff, Milton Friedman's Chicago boys say the Fed stupidly contracted the money supply, instead of expanding it as it should have, but other than that, nobody really seems to know for certain what it was that caused the crash. Most people think FDR's New Deal and WWII somehow combined to bring the US out of the Depression, but most people don't seem to know for sure how this worked. All of this is flatly wrong, but probably the single biggest myth is this one: that Herbert Hoover let the Depression get immeasurably worse by insisting on laissez-faire non-interventionism in the situation, so things just spiraled ever worse and worse. I know this is what I was taught in school. Nothing could be further from the truth. Anybody who studies Hoover's record before the presidency will know that he was the biggest busybody interventionist bureaucrat in the world. He became famous for organizing food supply chains for government efforts in WWI, and was so popular for his "Hooverizing" efforts that he ended up being Secretary of Commerce for Republican Presidents Harding and Coolidge (after having worked for Democratic President Wilson) and was eventually elected President himself. Even Wikipedia, not know for being a bastion of conservative thought, reports:

As the United States Secretary of Commerce in the 1920s under Presidents Warren Harding and Calvin Coolidge, he promoted government intervention under the rubric "economic modernization".

Are we to then believe he sat by and did nothing during the onset of the Great Depression? It strains credulity. Here is an excerpt from a speech given by Hoover himself, which I found in America's Great Depression by Murray Rothbard, which I am still in the process of tackling as part of Voxonomics.

we might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put it into action. . . . No government in Washington has hitherto considered that it held so broad a responsibility for leadership in such times. . . . For the first time in the history of depression, dividends, profits, and the cost of living, have been reduced before wages have suffered. . . . They were maintained until the cost of living had decreased and the profits had practically vanished. They are now the highest real wages in the world. Creating new jobs and giving to the whole system a new breath of life; nothing has ever been devised in our history which has done more for . . . “the common run of men and women.” Some of the reactionary economists urged that we should allow the liquidation to take its course until we had found bottom. . . . We determined that we would not follow the advice of the bitterend liquidationists and see the whole body of debtors of the United States brought to bankruptcy and the savings of our people brought to destruction.

Herbert Hoover was not a proponent of laissez-faire. He was an interventionist through-and-through. He started the New Deal far before Roosevelt. The policies of FDR should be seen as a continuation of the policies of Hoover, not a departure from them. And is it any wonder they didn't work? "For the first time in the history of depression, dividends, profits, and the cost of living, have been reduced before wages have suffered. . . . They were maintained until the cost of living had decreased and the profits had practically vanished." Maybe its just me, but I would think most companies would try to operate at a profit. Maybe the reason they didn't hire more people and expand their activities and productive capacity was because THEY WEREN'T ALLOWED TO MAKE ANY MONEY! All we have to fear is not fear itself. What we have to fear is the grasping hand of our fellow citizen and his ally, the tirelessly meddlesome, power hungry bureaucrat. There is only one word which could possibly describe the whitewashing of our history books in such a manner, and replacing it with something so bizarrely counterintuitive that people would actually believe it. Wait for it.... CONSPIRACY!