Embarrassing Quotes from History: Herbert Hoover

If ever a politician promised the moon but could only deliver a malaria and crocodile infested swamp, it was Herbert Hoover. Here’s what he said about American prosperity:

“We in America are nearer to the final triumph over poverty than ever before.”

Though you can’t really blame him. No one saw or predicted what was happening in the 1920s even though the signs (in hindsight) were everywhere. Farming suffered great losses in the 20s after the boom of the war years. By 1929, manufacturing of steel had plummeted, the automobile market was shrinking, people were over-tapped with crushing consumer debt, and the stock market was artificially inflated.

These were the heady days of the stock market, long before the SEC cracked down on illegal practices. Crooked pools were used to drive up stock prices and then quickly sell, making a fortune while leaving others with pennies. Buying on margin allowed the average Joe to purchase stock with as little as 10% down, foolishly thinking (both the stockbroker and the investor) that future revenue would be more than enough to pay off the remaining 90%. Companies ended up with a public value far greater than their private output could match.

And so when the stock market crashed in October 1929, no one knew what hit them, or knew what to do next.

Hoover was content to let the free market sort things out, and while the economy slowly started to come around, it was too slow to have tangible impact on the lives of many ordinary Americans who lost their savings and their jobs. The 1930 Smoot-Hawley Tariff, meant to protect American farmers, inadvertently closed off foreign markets to US goods, thus slowing down the economy to a crawl.

Thousands of banks became insolvent. Companies went under. People, who in the 20s purchased whatever product they wanted on credit, had to worry about their next meals. Hoover’s actions were cumbersome and slow, leaving many without hope and opening the door for Franklin Delano Roosevelt to be elected president in 1932.

The New Deal was coming. Hope was around the corner. Unfortunately, neither Hope nor the New Deal ended the depression, but it gave tangible help where the country needed it the most.

At another time in history, Hoover might have been a great president, but he ultimately said too much and did too little.

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