In an essay likening Barack Obama to Herbert Hoover (favorably!), John B. Judis lets it rip:
In his theory of history, Arnold Toynbee introduced an idea he called the “idolization of ephemeral institutions.” Countries that face economic or military decline have tended to look for solutions to those ideas and institutions that they associated with their past glory. The British in the 1920s looked to the gold standard as the solution to their economic slump. The Germans and Italians hearkened back to their authoritarian past. In the U.S., the specter of decline has revived arcane notions of economic and political individualism and pre-Keynesian economic theories. As Obama’s half-measures of spending and stimulation have failed to stem the rise in unemployment, many Americans have concluded that the fault lies with government intervention itself.
Wow. Leave aside Judis's bedrock certainty that America is in decline: When did individual liberty and free enterprise become "arcane"? I must have missed it.
Of course, faith in traditional institutions is a bedrock principle of conservatism, especially the "Burkean conservatism" that is in vogue nowadays. True, sometimes such faith is misplaced -- American conservatives aren't defending the institution of royal absolutism, for example. Rather, they seek to defend and promote the theories behind the Declaration of Independence, the Constitution, and the American commercial republic. All of which have a pretty good track record, it seems to me.
What's remarkable about Judis's essay is how it concedes that Hoover was not the antigovernment super-capitalist the Democratic party has spent decades making him out to be. "Hoover was also not a conservative Republican like Calvin Coolidge," Judis writes, "but a progressive who believed that capital and labor could work together with the encouragement of a beneficent government."
Indeed, as Judis notes, many of Hoover's policies anticipated the New Deal, from his labor bill, to the tax-hiking Revenue Act of 1932, to his spending on public works, to the Smoot-Hawley Tariff. Making matters much, much worse, of course, was the Fed's shrinking of the monetary base during Hoover's administration.
The Bernanke Fed has been determined not to make a similar mistake; this helps Obama in the near term. But the president is also wedded to interventionist economic policies that contribute to a climate of uncertainty and stifle growth. Deficit spending may be necessary during a downturn, but it is not sufficient for a robust economic recovery. If Obama wants to avoid Hoover's fate, he could temper his domestic ambitions in 2010, promote free trade, and promise to delay any tax hikes until the next boom--unless John Judis seizes the means of production first.