As many here have noted, John McCain has traveled a similar path to Herbert Hoover.
Support reckless deregulation that fuels a massive speculative bubble and pyramids of risky debt? Check.
Support irresponsible tax cuts for the rich while ordinary Americans are struggling to make ends meet? Check.
Praise the economic record of your predecessor right up until the brink of collapse? Check.
After the collapse, continue to insist that the fundamentals of the economy are strong and sound? Check.
Against, that background, one might have expected McCain to shy away from Hoover references. But no. This morning on the Today Show, McCain had the audacity to criticize Hoover, using this supply-side, trickle-down, revisionist talking point about the cause of the Great Depression:
History shows us that if you raise people’s taxes in tough economic times that makes problems worse. That goes back to the Hoover Administration.
Uh, no.
The Great Depression was neither caused nor exacerbated by the 1932 Revenue Act.
The Great Depression began in October 1929.
For the math challenged among us (read, "supply-side/trickle-down economists"), that is two years and eight months prior to the enactment of the Revenue Act of 1932, and more than three years prior to taxes being collected under the new, higher rates for high-income earners.
During most of those three years, Hoover kept on Calvin Coolidge's Treasury Secretary -- corporate titan Andrew Mellon -- who had fought successfully throughout the 1920s to lower taxes on the wealthy and deregulate big business. After the crash in 1929, Mellon advocated doing nothing, and no changes were made in the income tax system as the country headed further into the depths of the Depression.
Two and a half years later, however, the budget deficit situation got so dire that Hoover had to consider a revenue measure. After a regressive sales tax was defeated, the Congress instead passed a bill whose signature components were (1) raising rates on top incomes from 25 percent to 63 percent; (2) doubling the estate tax; and (3) raising corporate taxes.
In invoking Hoover this morning, McCain ignores the actual causes of the Republican crash in 1929 -- and all the inaction that led us to the depths of the Republican Depression by the end of Hoover's term -- and instead attempts to place blame on the Revenue Act of 1932.
Never mind that the first day for filing new income tax returns under the Act was March 14, 1933 -- after Hoover left office, and after the worst of the Depression had passed.
Never mind that, following the move to a progressive tax system, America went on to build the largest middle class the world had ever known under Roosevelt, Truman and Eisenhower while maintaining -- and, indeed, increasing -- the rates on high-income earners (top marginal rates were over 90% under Ike.)
No, don't mind that history, insists McCain.
Facts are optional.
Supply-side, trickle-down, revisionist tax-history is mandatory.
The New Republican Party:
I believe the foundations of this economy are strong.
- George W. Bush
July 31, 2008
I still believe that the fundamentals of our economy are strong.
- John McCain
August 20, 2008
Same as the Old Republican Party:
The fundamental business of the country ... is on a sound and prosperous basis.
- Herbert Hoover
October, 1929
As I write in the introduction of my new book on the modern Republican Economy:
This trickle-down recipe has not been any more successful under Bush than it was under Coolidge. In fact, this time, the bill is coming due quicker than it did in the 1920s. As a result, instead of playing the role of Coolidge and leaving office just in time to avoid the economic fallout, Bush is now stuck playing the role of Hoover as well (with John McCain left to audition for the second half of Hoover’s term).
- Yeah, Right: "This Economy Is Strong" and Other Tall Tales