Paul Krugman Is Getting Really Scared
More Glassman and Hassett Blogging (Atlantic Monthly Crashed-and-Burned Watch)

I Knew Franklin Delano Roosevelt, Franklin Delano Roosevelt Was a Friend of Mine, and You, Herbert Hoover, Are No Franklin Delano Roosevelt Blogging

UPDATE: Robert Murphy writes:

Free Advice: OK I Will Ignore DeLong, Starting... Now: I misspoke in the previous post when I said I was done nitpicking Brad DeLong's posts. For how could I know that he would then devote an entire post to me?! (What timing.) Regular readers here will see right away the true hilarity in DeLong's response.

Robert. It's not about you. It's about Hoover. So I'm going to edit things down to make that clear.

In a thumbnail, Herbert Hoover was a Keynesian avant le lettre with his heart but a liquidationist in his head. Hoover wished that he could do something to alleviate the Great Depression, but his head would not. The policies advocated by Mellon were the views that ruled the policies of the Hoover administration. Because Hoover kept Mellon as his Treasury Secretary and followed his led, Hoover did not:

  • nationalize any banks.
  • rescue any bank depositor businesses whose accounts are now frozen.
  • abandon the gold standard to expand the money supply.
  • do anything else to expand the money supply.
  • abandon the balanced-budget principle as a constraint on relief spending.

Now Hoover did not believe that he had a moral duty to make the little people who were going bankrupt in the Depression suffer. Unlike Ludwig von Mises or Grover Norquist, Hoover did not believe that he had a moral duty to drown government in the bathtub. Hoover was eager to use government's powers to cushion--note not cure--the Great Depression. But as long as he kept Andrew Mellon on as Treasury Secretary, Hoover could do none of the things--nationalizing banks, rescuing depositors whose accounts were frozen, abandoning the gold standard to expand the money supply, other forms of "quantitative easing," deficit-financed relief expenditures, or indeed deficit-financed expenditures of any kind--that might have actually helped enough to matter.