Herbert Hoover and the Crisis of the Old Order

 (Editor’s note:  This is the first segment in a three part series.)

Some say the best measure of a society’s worth is how it treats its weakest members.  Adversity is revealing...

It’s easier in a sporting event.  Not long after the final seconds tick off the clock, the winning team receives a ticker tape parade through the canyons of --- and keys to --- The City.  The loser, in turn, must accept a bitter pill, the consolation prize of measured reflection.  Where did it all go wrong?  How do we improve our chances of success next time?  In the sports with the good sense to provide a level playing field, a team can and does live to fight another day.  Never is there consideration of whether there will be food enough to eat on the night of defeat.

In a free, democratic society that puts all its eggs in the economic basket of capitalism based on the British model, somehow it’s just not as simple. But the ordinary citizen has come a long way. Trials, tribulations and progress in the pursuit of happiness – real victories - can be quantified with consensus objectivity.

Let’s put economic considerations aside for the moment. It may have cost the nation almost 650,000 lives, but we were finally able to correct the one gaping injustice of our social contract. The simple idea of extending constitutional protection to the black man came to pass. About half a century later, women were granted the full right of participation in the voting booth. In another half century, due process and equal protection of the laws gave these basic civil rights some teeth. Today, we are yet another half century removed.

In economic terms, the Republican administrations of 1920-1932 represented the climax of total cooperation between big business survival of the fittest and laissez-faire government in partnership. A period of unprecedented material prosperity, especially for private business interests, culminated during the 1928 presidential campaign. Then candidate Herbert Hoover had stated that “We in America today are nearer to the final triumph over poverty than ever before in the history of any land” and “given a chance to go forward with the policies of the last eight years, we shall soon with the help of God be in sight of the day when poverty will be banished from this nation.” Stock prices were reaching what had looked like a permanently high plateau.

Upon Mr. Hoover’s election it was being said that national leadership could not be in safer or more expert hands.  Respected economists noted that for the first time in the nation’s history “we have a President who, by technical training, engineering achievement, cabinet experience, and grasp of economic fundamentals, is qualified for business leadership.”  For his part, President Hoover in his March 1929 inaugural address stated that “I have no fears for the future of our country.  It is bright with hope.”

No one, perhaps, was better suited to anticipate catastrophe than President Hoover.  Following a successful entrepreneurial career with an engineering background in the private sector, he served for almost eight years as Secretary of Commerce before ascending to the presidency.  This provided him with a unique opportunity to observe the workings and influence the policies of the American business system.  But seeing all problems from the viewpoint of business, the federal government which he now headed “had mistaken the class interest (of business) for the national interest.  The result was both class and national disaster.”

In late October 1929, a matter of just a few months following President Hoover’s inauguration, the stock market crashed, ushering in the greatest economic downturn in US History.  The Great Depression lasted a full, painful 10 years.  How bad did it get?  One statistic is telling.  The unemployment rate rose from 3% in the first year to 9% to 16% to an astonishing 24% in the fourth and final year of the Hoover presidency.  That’s a lot of vanquished ordinary people.  When asked whether he felt the capacity for human suffering to be without limit, a banker reportedly replied, “I think so.”  Invoking moral justification, many conservatives regarded federal aid to idle workers as spelling the end of the republic.

Consistent with these sentiments, President Hoover reminded the ordinary citizen of what had become the basic philosophy of the Republican Party: The Great Depression was nothing more than a “temporary slump in a fundamentally strong economy” and that government intervention to combat its baneful effects was both “unnecessary and unwise.”  Stubbornly, he refused to act.  Vilified over the years for his failure to act, perhaps rightly so, President Hoover believed that relief should come from the private sector, not the government.

As a result, a capitalist system which denied work or relief to the unemployed millions was increasingly called into critical doubt.  But rugged individualism was dead nonetheless.  Both real estate and farm commodity prices had collapsed.  Banks effectively ceased to operate.  While the heart of industry was only beating faintly, the private sector offered nothing.  It had failed.  The 1932 election would provide a last chance for politics.

(Editor’s note:  The second and middle segment in this three part series introduces readers to President Franklin D. Roosevelt, the plight of the vanquished and the creation of a new order, which the ordinary citizen has come to know as F.D.R.'s “New Deal” with its accompanying social safety net.)

-Michael D'Angelo