So this competition for new jobs and businesses and middle-class security, that’s the race I know we can win. But you don’t win it by saying every American is on their own. We’re not going to win it if we just hand out more tax cuts to people who don’t need them, let companies play by their own rules without any restriction, and we just hope somehow that the success of the wealthiest few translates in the prosperity for everybody else.
We have tried that, by the way. We tried it for 10 years. It’s part of what got into the mess that we’re in. It doesn’t work. It didn’t work for Herbert Hoover, when it was called trickle-down economics during the Depression. It didn’t work between 2000 and 2008, and it won’t work today.
Hans Bader of Open Market.org reads the president the riot act, in a post titled, “Obama Peddles Myths About the Great Depression: No, Hoover Didn’t Cut Taxes or Spending:”
Obama is dead wrong. Data from the White House’s own website shows that Hoover increased, rather than cut, spending in the Great Depression, and ran up deficits that were huge by historical standards.
That is illustrated in Table 1.1 on page 21 of a document on the White House’s website, a document entitled, “Historical Tables: Budget of the United States Government, Fiscal Year 2009.” It shows that Hoover increased the federal budget from $3.1 billion in 1929, the year he took office (and the Great Depression began), to $4.7 billion in 1932, his last full year in office, and $4.6 billion in 1933, the year he left office. The budget deficit went from a surplus in 1928 to a deficit of $2.7 billion in 1932. Table 1.2 on page 24 of that document shows that government spending and deficits rose considerably as a percentage of the economy under Hoover. (See Table 1.2, “Summary of Receipts, Outlays, and Surpluses or Deficits (–) As Percentages of GDP: 1930-2013)” and Table 1.1, “Summary of Receipts, Outlays, and Surpluses or Deficits (–): 1789–2013)”). By 1932, the government was spending more than $2 for every dollar that it took in.
Newspapers such as the Richmond Times-Dispatch and Washington Times also have noted that Hoover actually increased spending during the Depression. Financial writer Megan McArdle of The Atlantic noted that Hoover more than doubled federal government spending as a percentage of GDP, increasing spending even as the economy shrank and deflation occurred. I have made the same point in The Washington Post, New York Times, and many other newspapers (see here, here, here, and here), citing “data from the federal Office of Management and Budget.” But Obama seemingly does not read newspapers, or even his own budget requests (which contained these figures).
And as Ed Morrissey adds, “In fact, Hoover’s spending policies look a lot like Obama’s. Maybe that’s why we’re seeing a big resurgence of
Hoovervilles Obamavilles these days.”