Salient to Investors:

Mark Gertler at NYU said Obama’s activism reflects a much larger federal-government role 80 years after Hoover, as well as the development of macroeconomics, giving officials more tools now to combat a slump. Gertler said Obama’s policies in this crisis are the mirror image of what happened during the Depression.

Hugh Rockoff at Rutgers said economic research since the 1920s by Keynes shows that government deficits can be good medicine for depressions, and Friedman highlighted the importance of central-bank liquidity.

Robert McElvaine at Millsaps College said Obama deserves credit for making use of the better economics and a larger federal role – Obama has much more macroeconomic knowledge and tools, but Hoover declined to use what was available at the time.

Historians disagree on the extent of Hoover’s responsibility for the Depression, given the understanding of economics in his time.

Glen Jeansonne at University of Wisconsin-Milwaukee said Hoover became the chief scapegoat despite very greatly expanding public works and increased federal spending – Hoover’s trade barriers and higher taxes were counterproductive, not understood at the time.

Edward Prescott at Arizona State University maintains that Hoover’s policies, shutting off immigration, and pressuring industry to maintain nominal wages as prices dropped, created the Great Depression.

Michael Bordo at Rutgers said one important distinction between Hoover and Obama is that the Fed took aggressive actions in late 2008-2009, which  should get more credit than Obama for ending the slump. Bordo said Obama didn’t deal with the source of the crisis, which was the collapse of housing and its effects on the financial system.

Mark Zandi at Moody’s Analytics said we would have had a depression but for intervention – TARP and stress tests of the largest US banks helped end the recession and jump-start the economy.

David Hamilton at University of Kentucky said Obama deserves high praise for containing what might easily have become a global economic meltdown.

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