Trump Depression Compared to Hoover Depression

            Trump seems to be following Hoover's playbook.  April 3^rd, 2025 stock market crash is the new October 28^th, 1929 stock market collapse.  The September 1929 special session of congress had two major stock market shudders before the tariff bill reported out of committee on October 24, 1929.  Apparently, it took the stock market four days to digest the reality of the actual bill.  The economy had 2.9 % growth the first year of office for Hoover.  That recovered the economy to near long term US economic growth rates of about 3%.  That recovery continued until the bill was signed.  1929 was the signal for the Great Depression, as the stock market looks ahead to the stubborn politicians determined to pass and sign the terrible bill.  Hoover lived in his own bubble, ignoring 1000 economists who urged him not to sign the bill.  Thus, on June 11, Hoover signed into law the Smoot Hawley 20% Tariff Act.  The economy had a new reality to adjust to in a three- or four-year death spiral.  Then, the trade economy was 7% of the US economy.  Today we, in the US, have 27% in the trade economy, four times the risk of the Great Depression, when the economy dropped 30%.  Very sobering.  And trade only dropped from 7% to 2%.  That 5% drop (times an import/export factor multiplier of 8 to 10 from my econometric textbook) exceeds the actual drop in real terms while falling short of the 50% drop of the dollar denominated economy, 1929 to 1933.  Clearly events like the federal reserve tightening, the bank collapse, and Hoover's attempt to cut federal spending to balance the budget are just the bumpy ride on the down escalator to the trade-drop-determined bottom level of the economy.  Catalysts like the banks, money supply, and budget cuts are secondary to the prime cause, tariff taxes.

            Attacking and angering the rest of the world does not make America popular.  Together with killing US Aid we are forcing the world into the arms of China, even Japan and South Korea are talking to China.  Make America number two.  Double meaning that.  Trump wants to be like a third world kleptocrat, gutting public health research.

MAGA=Moscow Agent Grifting America

            When will Trump ever put pressure on Putin instead of Ukraine, to give peace a chance?  He should double aid to Ukraine, THAT would bring Putin to the table.  Putin plays him like a fiddle, like the good KGB agent trained in manipulation he once was.  Putin elected him the first time as 4,000 Russian Facebook accounts simultaneously published the same material as 20,000 Trump Facebook accounts regularly in 2016.

Reprinted from 6-14-14 press release #43:

Hoover's Great Depression #43 6-14-14 Dr. Robert Reuschlein

Link to send out to others:

http://bobreuschlein.wordpress.com/2014/06/14/hoovers-great-depression/

The roaring twenties were only five years long, 1922 to 1926, with an average rate of growth of 8.8% per year.  Henry Ford's Model T had met newfound Texas oil.  Before that from 1919 to 1921 the economy dropped 15% in the three-year post World War depression.  Because politics and economics travel together so well, no wonder Wilson had great difficulty trying to join the League of Nations he had thought up. Then there was a two year no growth economy from 1927 to 1928.  Hoover ran and won in 1928 on a platform of a new large tariff to protect Western timber and mining from imports and to revive the stagnant economy.  Congressman Hawley was from the timber state Oregon and Senator Smoot was from Idaho potatoes, and together with Senator Borah of Utah salt, they introduced Hoover's platform as the Smoot Hawley Tariff bill in a Special Session of Congress in September 1929.  The economy recovered in 1929 growing at a 6.6% rate, but Hoover was determined to implement his campaign platform and called for the special session. 

You see, the American Federal Government depended on tariffs for 85% of its revenue in the nineteenth century, so it seemed normal to tax that way.  But Hoover was playing with dynamite this time, because the American economy was now the undisputed number one in the world, twice the size of the British or German economies.  So, depending on tariffs to protect the Northern manufacturing industry from the British Empire was one thing as a small power, but totally something else as a major power.  As the number one economic power raising tariffs invited European retaliation.  The stock market shuddered twice in September 1929, and then collapsed four days after the bill was introduced October 24, 1929.  The stock market could foresee the coming trade war.  The economy was just fine continuing to grow for the first five months of 1930, and then collapsed only after the June 11 signing of the bill against the protest of 1000 economists.  The math of the trade drop times a multiplier of eight to ten for the import/export sector does fully explain the drop of 30.2% of the economy from 1929 to 1933.  So, Smoot Hawley and the dry up of world trade are the principal causes of the Great Depression, and all the other reasons are secondary effects springing from this primary cause.  The timing of the stock market, looking ten months ahead, and the actual decline not starting until the bill is signed into law, and the size of the declines in trade and economic growth, tend to prove that Smoot Hawley was the main cause.  Another proof is the reaction after World War II when the economy was in a three-year slump until the new postwar trade regime of the GATT went into effect on January 1, 1948 and the first post war growth year occurred in 1948 with over 4% growth in the reelection year boosting an unpopular Truman into reelection year success.

An editorial in the Eugene Register Guard in the early eighties reported a study of rural growth showed an eight percent drop each year in a community absent any new business to reverse the trend.  So, economies tend to drop eight percent a year when in freefall downward, like the early thirties.

Hoover appointed a Blue-Ribbon commission of businesspeople, the Hump Commission to recommend what to do.  He ignored their advice to resort to more government spending in 1931 and doubled down on balancing the budget instead.  As a result, the economy dropped 9.9% in 1930, 7.3% in 1931, and 14.8% in 1932, so the economy took a sharp double down in 1932 thanks to Hoover's balanced budget strategy, then finally stabilized in the transition year to Roosevelt, 1933 with a drop of only 1.9%.  The agricultural nature of the tariffs leads to France, the largest agricultural economy in Europe, suffering the most in the thirties, while Britain and Germany suffered much less.  Then the weak French economy fell quickly to the German attack in 1940.

When John Maynard Keynes came out with his theory in 1936, he was just following the common-sense advice of Hoover's Hump Commission.  But he was advising Roosevelt, so he does deserve some credit for the recovery when Roosevelt pumped money into economy through various jobs programs.

Here are the key statistics in the Depression analysis

https://www.academia.edu/4044531/Depression

Here are brief summaries of the US Presidents Economies 1910-2009 https://www.academia.edu/4044532/US_PRESIDENT

Please cite this work as follows:  Reuschlein, Robert. (2025, April 4), "Trump Hoover Depressions" Madison, WI, Real Economy Institute.  Retrieved from:  https://www.expertclick.com/NewsRelease/Trump-Hoover-Depressions,2025309921.aspx

Dr. Peace, Dr. Robert Reuschlein,

Real Economy Institute

Nobel Peace Prize Nominee 2016-2025

best contact  bobreuschlein@gmail.com

for more info www.realeconomy.com