Ben Buchwalter


McCain Palling Around with Hoover
October 22, 2008, 6:37 pm
Filed under: 2008 Election, Economy, Republicans | Tags: , ,

As we can already see in Obama and McCain’s policies, the Democrats and Republicans offer radically different policies to deal with the economic recession. Very simply put, the Democrats are likely to promote government programs (paid for by taxes on the wealthy), while many conservatives want to limit government spending (claiming not to tax anyone, period). Matthew Yglesias calls this Neo-Hooverism, a term which refers to the fact that when the Great Depression hit, Herbert Hoover’s response was to limit government spending. The situation got much worse and Hoover is widely considered one of history’s worst presidents because of it. We were eventually pulled out of the Great Depression (stronger than we were before it) by FDR’s massive government spending programs of The New Deal and the industrial engine of World War II. 

That’s why I find it so odd that conservatives tend to align with Hooverite anti-spending policies. Though Obama and McCain would not spend or save as drastically as FDR or Hoover, they are advocating extremely different solutions to the economic crisis. Obama wants to spread the wealth through taxes and government programs; McCain doesn’t want to tax anyone and force a spending freeze.

In his admonition of Neo-Hooverism, Yglesias says the following:

 

“When you’re facing a recession, especially a recession wherein monetary policy has little ability to stimulate aggregate demand because the banking system is all seized up (remind you of anything?), you need public policy to stimulate aggregate demand. The recession is caused by overall demand for liquidity getting too high. In those circumstances, it becomes rational for any given individual and any given business to also prefer saving to spending. But that only makes things worse. What’s needed is for the government to break the cycle with deficit spending.” 

This is proven by the economic records of Democratic and Republican presidents. I posted before that the S&P Stock Market Index has on average done much better under Democratic leadership than Republican leadership. Think Progress also writes today that the “tax and spend” Bill Clinton created nearly five times as many jobs as the fiscally conservative Bush. I think that fact speaks for itself.

So Obama promises to follow the strong economic examples of FDR and Clinton by advocating government programs to raise us out of this economic crisis. Why on earth is McCain promising to follow Hoover and Bush’s policies? His policies are irresponsibly myopic, hoping to get votes by lowering taxes, while ignoring the long-term economic consequences.

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