During an appearance on Fox News’ Hannity & Colmes last night, Sen. John McCain (R-AZ), as he is fond of doing, invoked Herbert Hoover to warn against Sen. Barack Obama’s (D-IL) economic plan. “There was a president named Herbert Hoover,” said McCain. “They raised taxes, they practiced protectionism and they went from a serious recession into a deep depression. Now, that’s a matter of history.” Watch it:
However, there is another matter of history that McCain should look at regarding Hoover’s actions. Responding to the recession, and “convinced that a balanced federal budget was essential to restoring business confidence, Hoover sought to cut government spending and raise taxes.”
In fact, before the 1932 election, Hoover was touting his successful push to reduce government spending:
The extension of governmental expenditures beyond the minimum limit necessary to conduct the proper functions of the Government enslaves men to work for the Government….[T]he ordinary expenses of the Government have been reduced upwards of $200 million during the present administration. They will be decidedly further reduced.
Hoover’s approach was clearly unsuccessful, and late in his administration, he tried to recover:
As conditions worsened, Hoover’s administration eventually provided emergency loans to banks and industry, expanded public works, and helped states offer relief. But it was too little, too late.
There is a growing consensus among economists, budget analysts, and lawmakers that the next administration should not subscribe to what Matthew Yglesias has called “Neo-Hooverism” — mass spending reductions as a response to the financial crisis. McCain, however, consistently promises to balance the budget and has advocated a complete spending freeze on everything besides several “vital issues.”
If McCain really wants to use Hoover as an example of what should not be done in response to a recession, he needs to include the entire story, and not cherry-pick the most convenient of Hoover’s actions.