In a story regarding federal budget cuts, the Washington Post reports:
‘One of the last presidents to balance the budget was Herbert Hoover,’ [Rep. Peter] King added darkly, referring to the penny‐pinching Republican blamed for deepening the Great Depression.
What a loaded and inaccurate statement!
I just finished the fine new biography Coolidge by Amity Shlaes. Hoover plays a major part in the book as a long‐time cabinet member of President Coolidge and his successor in the White House. Coolidge was about as frugal a president as we’ve had, and he dreaded that he would be followed by big‐spender Hoover, who he knew would probably unravel his years of hard work at budget restraint.
Coolidge fought against many new spending plans pushed in Congress, including flood control projects, farm subsidies, and higher veteran’s benefits. But Hoover worked behind the scenes during the Coolidge years to boost flood control spending. And when he became president, Hoover sadly gave into the farm lobbies and launched the first major subsidy schemes.
In 1929 Hoover signed the Agricultural Marketing Act, which created the Federal Farm Board to subsidize agricultural cooperatives. I’ve noted that the scheme turned into a $500 million boondoggle, harming consumers and disrupting markets.
As president, Coolidge worked long and hard to cut the federal budget to $3 billion and hold it at about that level from 1923 to 1929. But when he was president, Hoover jacked up the budget from $3.1 billion in 1929 to $4.7 billion in 1932.
Shlaes concludes that Hoover “spent like a Democrat. But that spending hadn’t been enough to ensure even Hoover’s own reelection.” And contrary to the implication of the Washington Post, neither did Hoover’s big spending alleviate the Great Depression.