And then it just keeps rolling because there aren't the corrective measures that have been taken in recent in

our time that can put a stop to it, right? Right. I mean, this is the thing is if you watch a documentary on television about the Great Depression, you will see footage of the stock market crash or an image of the stock market, people milling around Wall Street, not knowing what to do. And then there will be sad clarinet music and all of a sudden it'll be the Dust Bowl. And the connection between those two things is not always clear, right? You really need to kind of pick this apart. And the way you have to show this is that the crash in the stock market begins to be reflected in a loss of consumer confidence very quickly. People see the stock market crash. They see the end of what they thought was this new economy, and they stop borrowing to buy stuff. So Americans for the first time in the 20s had been going into debt to buy things in a large way other than houses, right? So cars and home appliances. And this stops. You can see this new car registrations just plummet almost right away at the start of 1930. And that, of course, means that there's no longer any call to manufacture those things. That means that's where you get unemployment, right? That's where you, again, have a further drop in consumer demand and you begin to have a downward cycle.

The images of the Great Depression are so iconic. How much was that the true picture of what was happening? Or was that just happening to one sector

of this society? Well, again, it's a question of at which point we want to talk about this, right? Early in the slump, early 1930, you know, it might be a remoter problem for many Americans. But by the time you get later into 1930, 31, when unemployment gets up into the double digits, it's definitely becoming a problem where if you aren't unemployed, then certainly somebody you know or are related to is unemployed. By the time you get into 1932, where unemployment is getting close to 25 percent – and again, these are all retrospective figures. They are not quite as good as the ones we have nowadays. say it's close to 25%. Moreover, everyone who does have a job, but taking just those folks, about half of them are only part-time employed. So by then, it's really a systemic problem by the time you get into 1932. So it grows over time. And there's this kind of increasing, sickening awareness that it's going to affect everyone. It's amazing. I mean, I was raised

by depression era parents. I'm the youngest of five. So I got these guys, my parents, you know, World War II era. We ate things that they had eaten when we were young. They had a mentality that was forged in those impoverished years. They weren't themselves impoverished that badly, but they saw it all around them. So yes, it had a cultural impact as

well as an economic one. My grandmother always had sugar packets in her purse that she had liberated from diners and restaurants, because why would you spend money on those things, right? Well, at least you

didn't have to eat chipped beef, the worst dish of all time. No, no, I was spared that, I suppose. I mentioned before, his approach to crises is his reputation. You know, that's what he's built his career on, really, that and mining. So when there is this crisis, his approach will be to similar in the way that he talked about things before in World War I. Let's pull up our bootstraps. Let's work this out. An important element of this to discuss that doesn't get enough attention is that this kind of thing happened on a regular basis in America, you know, throughout the 19th century, for sure. These panics, bank panics of 1876, they go all the way back. So someone like a Hoover would see this as a repetition of a cycle, you know. So he sees America going through this the way it has in the past. What is different about this particular depression or this crisis than others? Yeah, well, the macroeconomics of business cycles were

new at this time, and Hoover was associated with the kinds of people who were studying this. So there was a general understanding that in capitalism, these things happened, that the economy would be in a boom, and then somehow people would overextend. There would be an excess of optimism, or as Cain said, of animal spirits, and then there would be a bust, and things would get worse until they bottomed out, and again, people started to reinvest. This happened, and the downturns would usually last 12 to 18 months, not terribly long. There had been severe depressions going back in people's living memory, such as the one in the 1890s, but that was more the exception than the rule. that this was not going to be a normal business downturn, right? So when you saw the stock market fail, when you saw the stock market begin to fall and people begin to sort of pull back on their borrowing, you might think, oh, this is going to be a normal business downturn. And the thing to do would be the kind of thing that Hoover had done in the Great War, which was to mobilize public opinion. Say, you know, we need everybody to get together and to do the right thing here and to not despair, and that there should be no failure of confidence, as Hoover repeatedly says, in the ability of the American people to weather this particular economic storm. You know, the Treasury Secretary in the Great War had nicely capitalized this kind of strategy, which again, Hoover pursued then is we're going to capitalize on the emotion of the people. And that's what Hoover's basically doing in the early days of the crash and the depression is say, we're going to rally around and come through this

relatively swiftly. Sure. He does gather business leaders together and warn them this could be a particularly bumpy recovery. He is aware of the hill they're about to climb. But one of the things he asks for is for them to keep wages up. He requests the business leaders to keep wages up as a stopgap measure, I suppose, right? Right.

He understands that the real threat here is deflation, right? The falling of prices. I mean, again, this is something where the understanding of macroeconomic activity at this time is in its infancy. But largely speaking, people understand that inflation can be inconvenient because rising prices can create a cycle where wages go up and prices keep rising. And this can be bad, especially for people who have lent money. But deflation is even worse because deflation can discourage even people who have money from buying things. Because if prices start to fall and then continue to fall, then if you have money, you have no incentive to buy anything that you don't need because you know it's going to be cheaper later. So you have an incentive to hold onto your money and just watch prices fall and buy that optional purchase sometime later. And so Hoover tries to fight deflation by telling these large employers to do their best to keep wages up so that workers will be able to continue to buy things at prices as they stand. So he's trying to aim at what will be the big problem of the depression. Now, it doesn't succeed because the kinds of things he's asking of a relatively small number of employers are not going to be able to have the kind of effect that are going to be needed

to move this entire economy. And the upshot of that is that they have to fire people, right? They got to keep their books in balance. Right. If they're going to keep their wages up and they don't

have the revenues that support the wages with that number of employees, the thing to do is to let some employees go, which again is going to contribute then to deflation because those folks are not going to buy as much as they would have. There

are many chapters to the Great Depression, obviously, but these days we think of it as one, you know, terrible era that just happened all at once. Of course, it just gets unfolds slowly, but surely. One of the next aspects of it is the banks failing. I mean, of course, they're going to because there's no money coming into them, right? Right. We have to kind of

unwind our understanding of the federal government as it is today. And remember that this is a time when its capacity is much, much smaller. Specifically, there is no federal deposit insurance, which of course there is today. And the Federal Reserve Board doesn't have the same powers kind of step into rescue banks as it does today. The understanding is that if a bank doesn't have money coming in because the people to whom it has lent money are failing to pay it, this is because the bank made bad decisions and the bank is going to simply have to suffer those decisions. And as a knock-on effect of that, that means that the people who have deposited money in the bank are also going to have to suffer as well as anybody to whom the bank owes payments. And the idea is that this kind of thing will eventually work itself out, that there will be banks that will close. There will be people who will lose money. They made bad decisions. That's just part of the price of capitalist vigor

is the general idea. And so Hoover is at this pivotal moment when a brand new view of America is necessary. And he's a bit old school for this, isn't he? He's a bit

old school. He has tremendous confidence in the ability of private enterprise and of the spirit of the people to kind of come through with, you know, encouragement. He's always been a great believer in this power of public relations. You might, if you were feeling a little bit uncharitable, saying he's seeing himself as a cheerleader for the economy more than anything else, rather than actually somebody who does things to it, which is more of a later view. But that's not

to diss the guy. I'm trying to explain that this is a really tough time. Yeah, this is a tough turn in America that requires a gigantic mind to really wrap itself around. And he's just on this side of that change. I mean, of course, we're foreshadowing everything that happens under FDR, which is just a few years later. But at this particular moment, there was reason to believe that this thing would work itself out.

There was certainly reason to believe that this would work itself out in, let's say, October of 1929 and even November and December of 1929. There probably comes a point when the balance shifts and one should realize, especially if one is sitting in the White House, that this is a different kind of economic downturn than the United States has seen before. Where you put that point, I don't know exactly. I think that's a judgment call.

Yeah, that's good. But certainly many people begin to change their minds before Herbert Hoover does. Right. Well, he would have been getting the reports, and it's just getting worse and worse and worse over a period of time. One of the things that you hinted at before was the agricultural collapse, which was due to falling prices and overproduction. That's going to play out in a grapes of wrath sort of way. But it's a gigantic story that has

a lot to do with the shift in demographics, right? Right. Again, a lot of Americans have only just moved away from farms and into cities. And one of the effects of the Great Depression is that for the last time in American history, Americans will move back from the cities to the farms to try to lean on their meager ability to get food out of the land. But as you say, this comes to be very clearly a time when the farm sector is broken. I mean, they had put a lot more acres under the plow to try to meet the needs of the Great War. So they had more crop growing capacity going on than could feed the number of folks who were involved in it by the time you get sometime into the middle 1920s, especially once the European farming sectors recover sometime around again, 1926. And at that point, commodity prices start to fall, and it becomes harder and harder to make a living as a farmer in the United States, which means that a lot of those farmers who have borrowed money to finance equipment or to finance the purchase of the farm stop making those payments and that puts pressure on the banking system. Again, this is again 20 to 25% of the American economy that is faltering at this point as a result of the farm crisis.

Yeah. Add to this the choice to use tariffs. In 1930, he signs the Smoot-Hawley tariff, which is designed to stimulate, as all tariffs are, to stimulate US economic growth. It totally backfires. It just makes things worse. And I'm just trying to sort of create a little checklist here of the various things, which now we look back on and say, gee, Herbert, please, you know, at some point you should have turned the corner here real fast. But it is a time in America when this is difficult. And he has had a lot in his life to confirm that the choices he's making and the messaging he's giving is correct. This man has been very successful in his life at this sort of thing. So it's a lot to ask to imagine that this guy could suddenly wake up one day and say, whew, this is tough. I got to go to Keynesian stuff here. And, you know, that sort of change his entire strategy is

impossible. Well, I think you have to remember that there are a couple of tools that the Republican Party in particular had long supported for managing economic crises. One of them is tariffs, right? This is like the Republican Party signature issue. The idea is that you put a tax on imports and you do that so that the American manufacturer can charge more for their product and then they can invest in research and development and improve their ability to manufacture whatever it is they're making. And this is to the advantage of the people who own factories, right? That's who benefits from this. Maybe they'll pay their workers higher wages and a sort of trickle-down effect, but it's immediately to the advantage of people who own factories. And farmers don't participate in this because the United States makes so much in terms of farm goods, right, that cutting off imports isn't going to matter. The problem is domestic production right here. And so the farmers are crying out for some kind of similar benefits to what the industrialists are getting from the tariff. And that's where the initiative for Smoot-Hawley comes from, is you could start to try to adjust the tariff structure. But once you sort of open that box, then everyone starts to put their hands in and say, well, we want this and we want that. end up with a tariff that benefits not the kinds of people you were trying to benefit in the first place. Yeah. And that's what happens with Smoot Hawley. I think that there does come a time when more intervention seems to be asked of the White House. And that's a time when Hoover reaches for a tool that was also sort of, at least since 1920 or 21 anyway, also a standard Republican tool, which was to try to restrict immigration. The view being that that creates competition for jobs. And so if you restrict immigration, well, then you will have less competition for American jobs. So he does do those things, but there are not a lot of other tools that he's willing to use. He's specifically very reluctant to try to support the banks, and he's even more reluctant to try to directly employ Americans, although they do begin to do those things towards the end of his term.