Peter Senge, author and scientist, wrote that our “reality is made up of circles but we see straight lines.” Economics and politics often intertwine, enabling bureaucrats to employ interventionist mechanisms to accomplish varied endgames, whether in the 1930s or 2020s. America’s economic and political history is in a loop, comprising booms and busts, recessions and depressions, interventions and transformations. No matter what bubble drives growth or what party helms the federal government, history possesses a knack for repeating itself – for better or worse.
It has been nearly a century since a devastating financial crisis sent the U.S. economy into a depression. Ninety years later, the country endured another financial calamity, bringing the world’s largest economy to the brink of destitution and despair. Two different eras, same failed interventionist tactics. But the more things change, the more they stay the same. From a Republican administration to a Democratic government, the country recently went through a presidential transition, potentially leading to a transformation of the United States, much like in the 1930s.
Hoover and FDR
Contrary to historians’ acceptable opinions, Herbert Hoover did not stand idly by and let the economy slip into the doldrums of indigence. The “forward-looking” politician launched a crusade against the laissez-faire attitude that the GOP had maintained for years, introducing a plethora of public policy measures that would make progressives blush. In addition to jawboning high wages, he signed many pieces of legislation to prop up wages and extend monopoly protection to unions artificially. Hoover blocked immigration, signed the Smoot-Hawley tariff, and proposed harmony between state and industry.
By 1931, the president outlined his more drastic proposals, referred to as "Hoover's second program" and “The Hoover New Deal” years later. He recommended lending tax dollars to banks, giving direct loans to state governments, establishing a Public Works Administration to launch and expand federal public-works projects and growing and enforcing antitrust laws to abolish "destructive competition."
This laid the groundwork for Franklin Delano Roosevelt, as many of his ideas were stripped from the Hoover camp. The Works Progress Administration (WPA) was a program to create government jobs for out-of-work Americans. The Social Security Act came into law. Farmers were paid to abandon their wheat, dairy products, tobacco, and corn to end the agricultural surpluses and raise prices. He approved the Tennessee Valley Authority Act, permitting the federal government to construct dams along the Tennessee River to generate cheap hydroelectric power and prevent flooding.
He also unsuccessfully tried to pack the Supreme Court. If you failed to toe the line, you faced the wrath of FDR.
How does this contrast with the Trump-Biden transition?
Trump and Biden
Soon after COVID-19 made its way to the United States, Donald Trump acted. The president restricted entry from China and Europe, sent assistance to the states, and launched a task force. After the country shut down, the federal government approved trillions in new spending, bringing the budget deficit to $3.1 trillion. In addition, the White House tapped the Defense Production Act (DPA) dozens of times, established Operation Warp Speed, and proffered additional funding for coronavirus-related activities. For whatever reason, the media claimed Trump did not do anything.
The transition from Trump to Joe Biden is comparable to the early 1930s. Hoover initiated ultra-aggressive stimulus and relief, and FDR went into overdrive by implementing mechanisms that would forever alter the makeup of the country. In an attempt to showcase his woke credentials and appeal to the radical wing of the Democratic Party, President Biden is using the pandemic as an excuse to impose the progressive vision: $15 minimum wage, student loan debt forgiveness, amnesty for 11 million illegal immigrants, and trillions in new outlays. What does this have to do with a highly infectious respiratory illness?
Could the Biden team pack the Supreme Court? This question has been evaded for months.
Once again, the United States is in a position where it may not look recognizable from the pre-crisis times. Another government-manufactured mess, another case of the ratchet effect.
Different Time, Same Philosophy
President Hoover claimed during the 1932 presidential contest that the election was about two different forms of government. But it was the one-term Republican president who set the stage for his successor, FDR, to change the fabric of the United States with the New Deal. Roosevelt’s advisers admitted that they mirrored the previous administration's efforts as the supposed do-nothing Hoover attempted his own New Deal before leaving the Oval Office.
Once the coronavirus pandemic paralyzed the country in early 2020, the federal government unleashed astronomical spending bills while the central bank ramped up the printing press. Trump had already abandoned any semblance of fiscal conservatism before the public health crisis, but deficit-financed outlays were exacerbated once COVID-19 crippled the nation. This planted the seeds to allow Biden and the Democrats to put forward relief packages and policies that would turn the United States into the left’s big-government creed, filled with student loan forgiveness, unreliable green energy, and ruling by decree.
The 1930s or the 2020s – the only difference is the campaigns had better slogans: “Keep Cool with Coolidge,” “Who But Hoover,” and “A Chicken in Every Pot.”
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Read more from Andrew Moran.
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