George W. Bush is very much like Herbert Hoover, but not in the way most people understand that statement.
Herbert Hoover was, contrary to the myths, a very economically activist president. When the Great Recession started, he worked tirelessly to try to bail out the failing banks. He started many of the programs that eventually became part of FDR's "New Deal". In doing so he made the Great Recession worse, and since his programs were those of the New Deal, he started the Great Depression. As a result he lost his party the office of the Presidency for decades. The other party (in the person of FDR) gained power and formally instituted the New Deal.
Some of the blame Bush is getting is for allegedly being too free market, allowing the market to proceed unchecked. Allegedly his disbelief in government caused him to deregulate the banking industry, even though there is no truth to that belief.
It should be noted that the Republican Party does not believe in deregulation. The Republican Party believes in regulation, just to the benefit of a different group than the Democratic Party does. Both of them have faith in the government; they just have different faiths from each other. Libertarians are the ones without faith in the government. The Democrats seem confused on the issue of this faith, mistaking heresy for disbelief, but the truth is that compared to the Democrats the Republicans are heretics of big government instead of atheists of big government. Even then few regulations were removed or changed.
The free market got the blame in 1929 for the inflation of the Federal Reserve and the failure of the market interventions of Hoover. The free market is getting the blame in 2008 for the inflation of the Federal Reserve and the failure of the market interventions of Bush.
Bush is in the process of losing his party control of the Presidency, and will be handing the office over to Barack Obama, who will bring us a New Deal to try to solve the economic woes of the United States, completing the cycle and bringing a new Great Depression out of Bush’s Great Recession.
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Man, history sure repeats itself over and over again, doesn't it? But no one ever seems to learn the real lessons.
Herbert Hoover is usually described in the government propaganda camps (aka public schools) as a free market capitalist. ARK is right; Hoover was anything but a capitalist.
The same applies to Bush, who is (laughably) called a free market conservative.
Both these criminals oversaw a system in which the Federal Reserve pumped huge amounts of fiat money into the credit markets, resulting in a huge stock market bubble and bad allocation of resources.
The best thing that could happen now would be to let the whole thing collapse, allow prices to plummet, and start rebuilding by taking advantage of low prices. Attempts to maintain the illusion of prosperity by propping up overvalued stocks and overvalued real estate will only prolong the agony.
Also, it would be an ideal time to switch over to honest money that can't be inflated; that is, gold and silver coins. If we do this, as well as outlaw fractional reserve banking (aka counterfeiting), we need never experience bubbles and crashes again.
Step one would be to release all the gold in Fort Knox (stolen from the American people by Roosevelt in the 1930's) in the form of gold coins.
Excellent column!
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