Joshua Green writes in the Atlantic, after discussing the Austrian economists’ views in 1929 on what to do about the not‐yet‐great depression:
Herbert Hoover’s Treasury secretary, Andrew Mellon, offered similar counsel, famously urging Hoover to “liquidate” and “purge the rottenness out of the system.” But this failed to stop the catastrophe.
That’s true. And you know, here’s a general rule: Absolutely nothing that a treasury secretary says to a president will affect the real economy if the president ignores his advice and does something else.
Hoover didn’t cut federal spending, he doubled it. He established the Reconstruction Finance Corporation. He propped up wages and prices. Indeed, he launched the New Deal. And Green is right: In the face of these policies, Mellon’s memos to Hoover failed to stop the catastrophe.
The rest of the article, about Ron Paul as “The Tea Party’s Brain,” is pretty interesting.