Economic Crisis: Lessons from 1932
By Bryan Caplan
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.
If you thought this year’s convention speeches were bad, that’s Herbert Hoover accepting the Republican nomination in 1932. A Republican tries Socialism 1.0, paving the way for a Democrat’s 2.0. Sound familiar?
But here’s my favorite so-bad-it’s-good passage from Hooverville:
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.
With 25% unemployment, Hoover goes before his whole party and loudly brags that real wages are unprecedentedly high, without the slightest thought that employment and the price of labor might somehow be connected. Let’s join Paul Rubin in hoping that he’s wrong about the next chapter in U.S. economic history.