It’s not 1933, it’s 1930

A major storyline of the 2008 election was that it was the Great Depression all over again: George W. Bush was the hapless Herbert Hoover and Barack Obama was the FDR figure, coming in on a wave of popular resentment to clean things up. The stock market crash made the parallels pretty direct. One could continue the analogy, with Bill Clinton playing the Calvin Coolidge role, mindlessly stoking the paper economy and complicit in the rise of the stock market as a national sport. Public fascination with various richies seemed very 1920s-ish, and we had lots of candidates for the “Andrew Mellon” of the 2000s. Obama’s decisive victory echoed Roosevelt’s in 1932.

But history doesn’t really repeat itself–or if it does, it’s not always quite the repetition that was expected. With his latest plan of a spending freeze (on the 17% of the federal budget that is not committed to the military, veterans, homeland security and international affairs, Social Security, or Medicare), Obama is being labeled by many liberals as the second coming of Herbert Hoover–another well-meaning technocrat who can’t put together a political coalition to do anything to stop the slide. Conservatives, too, may have switched from thinking of Obama as a scary realigning Roosevelt to viewing him as a Hoover from their own perspective–as a well-meaning fellow who took a stock market crash and made it worse through a series of ill-timed government interventions.

I can see the future debates already: was Obama a Hoover who dithered while the economy burned, too little and too late (the Krugman version) or a Hoover who hindered the ability of the economy to recover on his own by pushing every button he could find on the national console (the Chicago-school version)?

In either storyline, it’s 1930, not 1932: rather than being three years into a depression, we’re still just getting started and we’re still in the Hoover-era position of seeing things fall apart but not quite being ready to take the next step.

Anyway, I’m not claiming to offer any serious political or economic analysis here, just pointing out that the 1932 election was a full three years after the 1929 stock market crash, so Obama’s stepping into the story at a different point than when Roosevelt stepped in to his.

Or maybe we’re still on track for Obama to “do a Reagan,’ ride out the recession in the off-year election and sit tight as the economy returns in years 3 and 4.

3 thoughts on “It’s not 1933, it’s 1930

  1. Perhaps I am missing something here, but why would anyone assume a repetition of any kind? Yes, dumb and dumber then, and dumb (and possibly) dumber now, but so what? We have just witnessed the biggest repudiation of mainstream economics since the 1930s, and people wan't to pretend otherwise? There is nothing to milk from that history, as it, itself, had an entirely different history,which itself was worthless for prognostication. Yes, equally stupid, but stupid is not a great predictor: a constant maybe, but one with no predictive value beyond that we will always be.

    As Prof. Massimo Pigliucci recently opined, our problems are not economic, but structural: . And, as a small aside, I say that as a Canadian, where I see the same rot.

  2. I agree that history doesn't repeat itself. But people do think in terms of storylines, and my point is that the "1933" storyline was out there, and it was misleading in a key way.

  3. In some sense history can't help but repeat itself – as in they saying

    Those ignorant of history may repeat it.

    Those knowledgeable of history can't help but repeat it.

    At least this was the view of Michael Mair when re-diagnosing known mis-diagnoses of eye defects – "being aware of the mis-diagnosis I had a very hard time not seeing the implied defect"

    Always helpful to have ignorant people involved in important research and policy work.

    But not sure who I am agreeing or disagreeing with here


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