Quotulatiousness

May 29, 2025

QotD: FDR and Herbert Hoover in the Great Depression

November 1932. Hoover has just lost the election, but is a lame duck until March. The European debt crisis flashes up again. Hoover knows how to solve it. But:

    He had already met with congressional leaders and learned, as he had suspected, that they would not change their stance without Roosevelt’s support. Seized with the urgency of the moment, he continued to bombard his opponents with proposals for cooperation toward solutions, going so far as to suggest that Democratic nominees, not Republicans, be sent to Europe to engage in negotiations, all to no avail. Notwithstanding what editorialists called his “personal and moral responsibility” to engage with the outgoing administration, Roosevelt had instructed Democratic leaders in Congress not to let Hoover “tinker” with the debts. He had also let it be known that any solution to the problem would occur on his watch – “Roosevelt holds he and not Hoover will fix debt policy”, read the headlines. Thus ended what the New York Times called Hoover’s magnanimous proposal for “unity and constructive action”, not to mention his 12-year effort to convince America of its obligation and self-interest in fostering European political and financial stability …

    During the debt discussions and to some extent as a result of them, the economy turned south again. Several other factors contributed. Investors were exchanging US dollars for gold as doubt spread about Roosevelt’s intentions to remain on the gold standard. Gold stocks in the Federal Reserve thus declined, threatening the stability of the financial sector … what’s more, the effectiveness of [Hoover’s bank support plan], which had succeeded in stabilizing the banking system, was severely compromised by [Democrats’] insistence on publicizing its loans, as the administration had warned. For these reasons, Hoover would forever blame Roosevelt and the Democratic Congress for spoiling his hard-earned recovery, an argument that has only recently gained currency among economists.

And:

    Alarmed at these threats to recovery, Hoover pushed Democratic congressional leaders and the incoming administration for action. He wanted to cut federal spending, reorganize the executive branch to save money, reestablish the confidentiality of RFC loans, introduce bankruptcy legislation to protect foreclosures, grant new powers to the Federal Reserve, and pass new banking regulation, including measures to protect depositors … He was frustrated at every turn by Democratic leadership taking cues from the President-Elect … On February 5, Congress took the obstructionism a degree further by closing shop with 23 days left in its session.

In mid-February, there is another run on the banks, worse than all the other runs on the banks thus far. Hoover asks Congress to do something – Congress says they will only listen to President-Elect Roosevelt. Hoover writes a letter to Roosevelt begging him to give Congress permission to act, saying it is a national emergency and he has to act right now. Roosevelt refuses to respond to the letter for eleven days, by which time the banks have all failed.

Then, a month later, he stands up before the American people and says they have nothing to fear but fear itself – a line he stole from Hoover – and accepts their adulation as Destined Savior. He keeps this Destined Savior status throughout his administration. In 1939, Roosevelt still had everyone convinced that Hoover was totally discredited by his failure to solve the Great Depression in three years – whereas Roosevelt had failed to solve it for six but that was totally okay and he deserved credit for being a bold leader who tried really hard.

So how come Hoover bears so much of the blame in public consciousness? Whyte points to three factors.

First, Hoover just the bad luck of being in office when an international depression struck. Its beginning wasn’t his fault, its persistence wasn’t his fault, but it happened on his watch and he got blamed.

Second, in 1928 the Democratic National Committee took the unprecedented step of continuing to exist even after a presidential election. It dedicated itself to the sort of PR we now take for granted: critical responses to major speeches, coordinated messaging among Democratic politicians, working alongside friendly media to create a narrative. The Republicans had nothing like it; the RNC forgot to exist for the 1930 midterms, and Hoover was forced to personally coordinate Republican campaigns from his White House office. Although Hoover was good (some would say obsessed) at reacting to specific threats on his personal reputation, the idea of coordinating a media narrative felt too much like the kind of politics he felt was beneath him. So he didn’t try. When the Democrats launched a massive public blitz to get everyone to call homeless encampments “Hoovervilles”, he privately fumed but publicly held his tongue. FDR and the Democrats stayed relentlessly on message and the accusation stuck.

And third, Hoover was dead-set against welfare. However admirable his attempts to reverse the Depression, stabilize banking, etc, he drew the line at a national dole for the Depression’s victims. This was one of FDR’s chief accusations against him, and it was entirely correct. Hoover knew that going down that route would lead pretty much where it led Roosevelt – to a dectupling of the size of government and the abandonment of the Constitutional vision of a small federal government presiding over substantially autonomous states. Herbert Hoover, history’s greatest philanthropist and ender-of-famines, would go down in history as the guy who refused to feed starving people. And they hated him for it.

Scott Alexander, “Book Review: Hoover”, Slate Star Codex, 2020-03-17.

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