Comments on: Barack Obama as Herbert Hoover

By: Edward Harrison

Edward Harrison — Wed, 27 Jan 2010 18:14:08 +0000

My recent post on what Obama can do to improve the economy gives you a taste of the possibilities.

By: HWad964

HWad964 — Wed, 27 Jan 2010 06:36:42 +0000

Typo first sentence. April 2009 (as your subtitle correctly indicates)

This remains an important analogy. I wish Prof Krugman understood your point.

By: Edward Harrison

Edward Harrison — Wed, 27 Jan 2010 04:17:37 +0000

I linked to the UMKC econ blog version of that article. He's on the money. I don't see any way out of this without a hiccup in GDP. But the goal is to redirect resources away from FIRE toward the real economy. My preferred way was through public sector investment but that's a non-starter now.

Marshall may have more ideas here.

By: LavrentiBeria

LavrentiBeria — Wed, 27 Jan 2010 04:02:44 +0000

Agree on the overinvestment in financial and real estate, but as to the demand side of the equation, what other than stimuli - and I mean de jure jobs creating stimuli - can he do. If he does nothing in this latter area, he indeed risks the plunge the 1937 economy took. Michael Hudson discusses these questions in detail today at Counterpunch:

http://www.counterpunch.org/hudson01262010.html

Your take on his analysis?

By: Edward Harrison

Edward Harrison — Wed, 27 Jan 2010 03:51:59 +0000

Dan: there are two Hoover comparisons here. The one has to do with government spending and taxation where the ideological battle is waged. While I try to see both sides of that issue, I see a need to move away from overinvestment in financial services and real estate and that is going to lower aggregate demand. The government can fill in some of the gap, but it is essential this overinvestment is eliminated.

The other comparison is the one I am making here which is non-ideological. Obama is much earlier in the economic cycle. I also think he is earlier in the secular cycle as well (akin to 1937 or 1974 versus 1982 for example). This means he needs to act differently rather than depending upon stimulus to pull him through.

By: dansecrest

dansecrest — Wed, 27 Jan 2010 03:39:17 +0000

This is a very good observation. With the recession still young and the economy still falling, Obama is running into a mainstream of opinion (including his own) that does not yet appreciate the seriousness of the economic situation. So there is a tendency to do things in small measures, while promising to reduce the deficit next year. Wall Street is bloodied but unbowed. The electorate is unhappy, but has no clear direction. The economy probably won't bottom for another couple of years, at which point Obama will be looking like a one-termer unless he comes to grips with the Hooverian seriousness of the situation…

By: What President Obama can do to improve the economy - Credit Writedowns

What President Obama can do to improve the economy - Credit Writedowns — Wed, 27 Jan 2010 00:25:58 +0000

[...] pm Digg it Bookmark it Stumble it Reddit26JanI re-posted my April 2009 post, “Barack Obama as Herbert Hoover” in response to the recent deficit reduction gimmick offered up by the Obama Administration and [...]

By: Obama: grading his first year’s economic performance « naked capitalism

Wed, 20 Jan 2010 16:26:59 +0000

[...] -Barack Obama as Herbert Hoover, Apr 2009 [...]

By: Grading Obama’s economic policy after one year - Credit Writedowns

Grading Obama’s economic policy after one year - Credit Writedowns — Wed, 20 Jan 2010 16:16:21 +0000

[...] depression was everywhere.This was 1931. Herbert Hoover was president, not Franklin Roosevelt.-Barack Obama as Herbert Hoover, Apr 2009Obama’s failure to understand where we are in the economic cycle and the relationship to [...]

By: flow5

flow5 — Wed, 15 Apr 2009 16:26:57 +0000

Pathetic. Hoover & Roosevelt both ran their campaigns promising a balanced budget.