Say Anything Blog

Democrats like to talk a lot about former Republican President Herbert Hoover, the man whose economic policies are often blamed for sending this country into the Great Depression.  During the 2004 election the Democrats used a talking point against Bush that went something like “Bush has lost the most jobs since Herbert Hoover.” Even today people like Chuck Schumer accuse Republicans of having a “hands off” economic approach like Herbert Hoover.

But as much as the Democrats like to bash Republicans with Hoover’s legacy, the truth is that if Hoover were alive and active in politics today he’d probably be a Democrat in the mold of Barack Obama and Hillary Clinton.

To hear [Democrats] tell it, Hoover’s great policy blunder was to do nothing, all the while insisting that everything was fine. But the problem with Hoover’s economic policy isn’t that it was passive but that it was actively destructive.

In 1930, he signed the Smoot-Hawley Tariff Act, setting off a wave of protectionist retaliation that undid the globalization of the preceding decades and did far more harm to the world economy than the stock-market crash ever did. Two years later, amid a bad recession, he undid the Calvin Coolidge-Andrew Mellon tax cuts, raising the top marginal income-tax rate to 63% from 25%. The recession became a Depression.

Now, since we’re talking Hoover, which Presidential candidate has a similar agenda of protectionism and tax increases? Hmmm.

Oh, that’s right. Just the other day, one of the candidates for President was saying she’d withdraw from Nafta if the Mexicans didn’t do what she demanded, and she wants “a pause” in free trade. She also wants to repeal the Bush tax cuts, more than doubling the rate on dividends back to 39.6% from 15%.

Her Democratic opponent agrees with her, except that he’d raise taxes even more, including by eliminating the $102,000 cap on income subject to the 6.2% payroll tax (12.4% when you include employers), and raising the capital gains tax to at least 25%, and maybe even 28%, from 15%. Add up all of Barack Obama’s tax increases and his proposals would get entirely too close to Hoover’s top marginal rate of 63%.

Maybe we should be afraid of Hoover’s ghost.

Indeed we should be.

Cliche says that we are doomed to repeat the history we haven’t learned from.  It would seem as though Democrats haven’t learned much.