from this blog,
http://www.zcommunications.org/the-return-of-hooverian-economics-the-real-story-behind-the-state-budget-cuts-by-anthony-dimaggio
> For those who are unfamiliar, Hooverian economics refers to the do-nothing
> approach to dealing with economic crises. It assumes that government is
> always “part of the problem” when it comes to promoting the public good.
> This most recent strain of Hooverian economics is accompanied by a
> hypocritical promotion of massive corporate subsidies and bailouts, in which
> a majority of Republicans (along with the former Bush administration)
> endorse. As the theory goes, the best way to ensure economic recovery is to
> get the government “out of the way” of the private sector when it comes to
> “excessive” and “unneeded” regulations and interference. But how is this
> approach related to the modern day electoral politics of the Republican
> Party? <
I wouldn't say that Hooverian economics is "do nothing." Hoover did
something in the early 1930s, like trying to boost business morale
("recovery is just around the corner" or some such) and telling
businesses not to cut wages. More importantly (and actually having an
effect), Hoover and Congress raised taxes to try to balance the
government's budget. The deficit had risen largely due to the
recession -- and this policy made the recession worse.
The implicit idea that "do nothing government" is bad but "do
something government" is good forgets that the government does a lot
of bad things.
State and Local governments are mostly Hooverian (in my sense) because
their constitutions say they _have to_ balance their budgets by
raising taxes and/or cutting services (as they did during the 1930s,
even though it help perpetuate the depression). State & locals don't
do fiscal stimulus. Even for states like California (where
balanced-budget strictures are toothless), deficits are feared and
fought because they hurt credit ratings (and thus raise credit costs).
The kind of Hooverian economics the author describes has been around
for a long time. Reagan and Dubya were into it, while Clinton, George
H.W. Bush, and Obama have had relatively small disagreements with it.
It's "laissez faire" or neoliberalism, which usually translates as
"socialize business losses and subsidize business profits." It's
Calvin Coolidge Capitalism.
--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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