Comparing GWBush with Herbert Hoover.
What will be more important is who is in the White House and how they will lead us through the pending depths of Depression Two. In this regard, it is instructive to review the biography of George W. Bush to compare it with Herbert Clark Hoover.
The first significant thing to note is that both men were/are about 55 at the time they took office. They are on the young side. Hoover, who was born in 1874, was elected in 1928 - 55 years. Bush, born in 1946, was elected in 2000, 54 years.
Both men come from essentially political backgrounds. Hoover served as Secretary of Commerce under two presidents, while George W. grew up under the shadow of the White House and served as Texas Governor.
As the White House biography says, "Hoover became the Republican Presidential nominee in 1928. He said then: "We in America today are nearer to the final triumph over poverty than ever before in the history of any land." His election seemed to ensure prosperity. Yet within months the stock market crashed, and the Nation spiraled downward into depression.
Doesn't this sound a lot like what's going on with the mood of the markets today?
Elsewhere, we read of Hoover: "After the crash Hoover announced that while he would keep the Federal budget balanced, he would cut taxes and expand public works spending."
What can we expect from Bush? According to the official Bush web site: "He has proposed plans for... reducing taxes on all taxpayers, especially those on the outskirts of poverty; strengthening the military with better pay, better planning, and better equipment; saving and strengthening Social Security and Medicare by providing seniors with more options; and ushering in the responsibility era in America.
I submit to you that public works spending of the 1930's is analogous to spending in the medical and retirement arenas today.
During his administration, Hoover expressed the feeling that Congress was subverting his proposals for political reasons. With things badly split as George W. takes office, is it possible that Bush will face the same problem? Hoover was painted as a coarse and callous president, and given the way things look a year or two from now, that would likely be the paint a liberal press would wish to apply to Bush.
By 1932, the country was in the depths of the Depression and Hoover was badly defeated. Is it possible that Bush will be badly defeated in 2004 with the country at the depths of the "not-yet-fully-evident" depression developing around us?
It's not all bad. Hoover made major contributions to the government by helping in post-war reorganization in 1947. This means Bush might have a roll in rebuilding the post-war economy around 2019. Bush should also live until age 90, which means 2036.
Both men are Ivy Leaguer's. Bush completed his BA (Yale) at age 22, although he later went on to grad school (Harvard). Hoover graduated from college at age 21 (Stanford).
Both men were involved in extracting "wealth from the earth". Hoover was a mining engineer and although he's an MBA, George W. background is primarily in the oil and energy business. According to the George W. Bush web site: "He started out as a land man, researching who owned mineral rights to property, then began trading mineral and royalty interests and investing in drilling prospects, and ultimately started his own oil and gas company. circa 1978.
In 1888, Hoover was a land man, too; he worked in the land settlement office of his uncle, Dr. Henry John Minthorn.
Both men had entrepreneurial drive. Hoover organized an engineering firm in the mining field at age 34. George W. Bush began his own oil & gas business in 1978, at age 32.
Hoover was the father of two boys (Herbert Clark Hoover and Allan Henry Hoover) while Bush is the father of two girls (Barbara and Jenna). There's a certain statistical Yin and Yang about this.
Both men did what must be viewed as similar great "public works" that brought them great fame. For Hoover, it was his American Relief work in 1918-1919 to bring Americans home from Europe. Hoover was 44 at the time. What was George W. doing at age 44? Like Hoover, he was doing something immensely popular with the public. He assembled the group of people that bought the Texas rangers in 1989. Bush was 43.
In 1931 Hoover's deepening economic crisis became more severe as repercussions from Europe continued to shake the financial world. Will Bush face a similar problem from Asia's continuing decline a few years into his Presidency? The re-emergence of Asia has been good for stock hypers, but not much else.
So, what should we see from Bush Two as Depression Two unfolds? Perhaps this snippet about how Hoover handled it, from Grolier's online encyclopedia will be helpful:
"Hoover believed that aid to the hungry and the deserving unemployed should come from local governments in the states and counties, not from the federal government. Yet he recommended and Congress appropriated funds for huge public works. On Hoover's recommendation, Congress established the Reconstruction Finance Corporation, approved Jan. 22, 1932, with an initial working capital of $500 million. " <http://gi.grolier.com/presidents/ea/bios/31phoov.html>
I can only observe that Bush 's record suggests his approach - and possibly results - will be similar. What I see coming will likely be an "Energy Independence Corporation" to push the country forward toward renewable resources, given Bush's excellent handle on the real-life facts of energy depletion.
The world "economic trough" war, forecast by long wave student and adherents, is likely to be waged by a second term Democratic president, who we will elect to a first term after defeating Bush in 2004.
Although some of his mining lectures were later to become part of a book, Hoover didn't write his first big political work until he wrote "The Challenge of Liberty". This means we should see George W.'s book out shortly after he looses to the strong Democrat in 2004.
No, this is not an exact match up. However, as Mark Twain observed, history does rhyme.
The annual forecast for 2001 is a slight up into either the January or February option close, and then a resumption of the long grinding bear market. Down 20 percent, 25%, or even more, is in the cards if the forecast is right.
As I wrote for the Thursday update last week:
1930: If you asked people in 1930 if they thought the country was in a Depression, the more honest would have said "No sir, but we have had a little trouble with Radio (trust) lately. I think the market will recover.".
2000: If you ask people in today's market, the more honest will say, "No, dude, but geez, the tech stocks have had a little trouble lately. Still, I think the market will recover."
Notice any similarities?
--------------------------------------------------------------------------------
I sent a copy of this report to one reader, with whom I correspond now and again. His comments I think are of interest to the case that Bush will replay Hoover. Read on, and make your own judgement, remembering this site offers no financial advice!
I can see that you have done your research.
Curiously enough, a good friend of mine is heavily invested in tech stocks with her pension |
