Herbert Hoover's bad rap
Peter Boettke has an excellent commentary over at Coordination Problem, 鈥淚s This How the Myth of the Laissez Faire Herbert Hoover Was Invented?鈥�. He concludes, 鈥淗erbert Hoover was as much of a laissez faire president as Barack Obama has been or the leaders in Europe have been. From a free market perspective, the steps taken since 2007 have turned a market correction into an economy wide crisis and then a global crisis. Those steps were anything but 鈥榙o nothing,鈥� and they were taken first by a Republican President and then pursued further by a Democratic President. We have never given 鈥榥othing鈥� a chance. But mythologies need to be created in order to tell neat historical tales. Laissez faire Hoover is replaced by activist FDR and the nation is saved.鈥�
Pierre Lemieux in provides a detailed and enlightening discussion of how the issues Peter raises in his post played out in the recent crisis. Policy failure, not market failure generated the malinvestments and crisis. The rush to do something slowed recovery.
From my review essay (pdf available on request), in The Independent Review 鈥淎 Crisis of Authority: Pierre Lemieux鈥檚 Somebody in Charge: A Solution to Recessions?, the SUMMARY鈥�
鈥淭he roots of the recent financial crisis, according to economist Pierre Lemieux, lay not in greed and self-interest running amuck in unhampered markets, but in the policy and regulatory structure that created and enabled excessive leverage and risk taking. If Lemieux鈥檚 latest book were widely read, more people would believe that financial regulators and central banks are not needed to avoid financial crises and economic recessions.
And the conclusion:
鈥淟emieux鈥檚 conclusion that 鈥淭he causes and legacy of the economic crisis of 2007-2009 reveal a deeper underlying crisis, which is a crisis of authority鈥� (p. 162). If this book was widely read and widely used in classrooms, it could be very useful in awaking more of the public that we do not need somebody in charge. What we need is 鈥榃icksteed鈥檚 car of collectivism鈥� to 鈥榖e stored on a sidetrack鈥� (p. 163).鈥�
