…or Herbert Hoover?

As President Obama struggles, again, to gain control of the economic conversation and relaunch his administration’s economic policy (how many times has this administration announced its determination to focus on job creation?) the similarities between these two idealistic and patriotic men begin to emerge. In both cases we have a President who thought that his mission was to remake the world, but who gradually discovered that the tools in his toolkit were no match for the problems he faced. With great intelligence and serious goodwill, both men set about to address the most important issues facing the country and the world — only to find that their chosen remedies failed one by one.

I am not convinced that the President’s political goose is cooked — yet. For one thing, luck can never be discounted. Recessions don’t last forever, anymore than booms do, and American capitalism is strong enough to stage a recovery in the face of poor policy. But luck aside, the President can still avoid the great mistake that finally wrecked Hoover: the failure to learn.

President Hoover brought some convictions with him to office about how the economy worked, how government worked, and what his role as President should be. As the Depression deepened, he did the best he could within those limits, but nothing seems to have made him reconsider the mix of progressive ideas that he brought with him to the White House. As months of failure and disappointment grew into years, he doesn’t seem to have questioned those core ideas or to think about ways in which the economic emergency might require steps that in normal times would not be taken. He not only failed to end the Depression; he failed to give people a sense that he understood what was happening. Over-optimistic forecasts issued in part to build confidence came back to haunt him. To the public he seemed fuddled and doctrinaire, endlessly recycling stale platitudes in the face of radically new economic problems.

One of the myths of the rewritten history by the left is that Hoover was a conservative, with laissez-faire economic policies (and thus by implication a hero of modern Republicans, particularly Reagan Republicans), but he was an economically ignorant progressive of his time, albeit a good engineer and a good man. The comparison seems quite apt to me (except I’m sure that Hoover was nowhere near as arrogant, narcissistic and self absorbed as the president).

Is extreme bank regulation a key to the lousy economy? The fact that there’s a ton of uncertainty about Frank-Dodd doesn’t help, either. And of course, Sarbanes-Oxley has been a disaster for start ups.