EXCERPTS: (beginning with the Conclusion at the end, emphasis mine)
One of the persistent myths of American history is that Herbert Hoover was a laissez-faire ideologue who did nothing to help the economy recover from Depression. On the contrary, Hoover was in many ways a "progressive" who believed the federal government could intervene to dampen the cruel vicissitudes of the wildcat free market.
If only Hoover had followed the hands-off policies of his predecessors, we would not today associate him with the worst episode in US economic history.
First of all, let's go back to Krugman's discussion of Treasury Secretary Andrew Mellon and his infamous advice about liquidation. To his credit, Krugman acknowledges that this quote comes from Hoover's own memoirs, written well after the fact. But to his discredit, Krugman fails to notify us that on the very next page of Hoover's memoirs, after he explains the liquidationist advice he got from his treasury secretary, Hoover wrote,
If you read Hoover's memoirs in context, you see that his whole point in bringing up the Mellon doctrine was to tell his readers that he rejected the advice
Originally Posted by Hoover
. Hoover was trying to show people (and of course I'm paraphrasing here), "Hey, I did everything I could to get us out of that awful downturn! You should have seen the crazy laissez-faire stuff my treasury secretary was recommending."
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