By Chan Kung*
In all of America’s history, there was a President who was known for his pragmatic approach towards thing.
He created the United States Department of Commerce and established many of today’s affiliated agencies and committees, from supervision and management of production reports and demographics to radio broadcasting and air travel. The former United States Secretary of Commerce turned President had enforced various practical measures. His accomplishments include but were not limited to emphasizing the elimination of waste within the government and enterprises, improving efficiency, decreased labor losses caused by trade disputes and seasonal fluctuations, reduced industrial losses due to workplace accidents, and even minimized crude oil spillage resulting from mining and transportation. Furthermore, he successfully promoted the idea of progressive design in the field of product standardization and ardently supported the idea of establishing offices overseas that provided consultation services and additional assistance to facilitate international trade. In short, he was a one-man army who accomplished all that by himself, leading many to joke that he was not only the “Secretary of Commerce”, but also holding a handful of other secretariat positions as well.
The president truly “talked the talk” and “walked the walk”. He came up with the “Own Your Own Home” campaign across the country to encourage house ownership. In fact, he worked with bankers, and the savings and loan industry to promote long-term home purchase loans, which greatly stimulated the construction of residential real estate. Certain financing enterprises for real estates and construction, including Fannie Mae and Freddie Mac Real Estate Finance, well known in the United States today, came from his efforts.
Apart from that, he was also passionate about the development of various industrial sectors in the United States, of which his influence remains clear today. During then, he stressed the need for organizational meetings in certain industrial sectors, with most notable one being the “National Conference on Street and Highway Safety” that covered the Federal Motor Vehicle Safety Standards, Urban Traffic Management and Control, and most importantly, ensured the standards of the U.S. automobile industry were in line with one another as so to set the foundation for the great development that the U.S. automobile industry came to be today. Put simply, he had a part in establishing the priority of vehicles on the streets which helped shape the American cities that we have come to know today, though it remains as a lesser-known fact amongst most modern-day Americans and urban planners worldwide.
His passion and love for the manufacturing industry knew no bounds and was awe-inspiring to many. Aside from the public transportation and automotive industries, he also had a hand in the early planning of government policies aimed at providing many other up-and-coming transportation and communications industries. Like the automobile industry, he played a vital role in the development of U.S.’ aviation industry. He chaired an important aviation industry conference and promoted the establishment of relevant rules and regulations for the aviation industry. Without his efforts, the Boeing Company would never have been the industrial and influential powerhouse that it is today.
The United States is huge, and natural disasters were not an unusual sight for the country. There was a year when a great flood happened at the Mississippi River, breaking through the levees, drowning millions of acres of fields, and leaving thousands homeless. In light of the huge disaster, the governors from six states situated along the river called for his help instead of the then-President’s to coordinate disaster response aids to the flood. Right away, he went to the affected area and mobilized the state government, local authorities, militia, military engineers, coast guards as well as the Red Cross to help the people. It was he, who pioneered the move of joint efforts for disaster relief that we see so often in the U.S. now.
As a matter of fact, at that time, he even formed a medical team to control the epidemic in the affected area. The team would eventually go on to eradicate post-disaster diseases such as malaria, pellagra and typhoid fever in many other areas. During these moments, his deeds appeared on the front page of many local tabloids. People were impressed by his acts of philanthropism, and he became well known for his refusal to discuss politics. He credited the huge success behind the disaster relief to the private committees who responded to him and provided immense support, instead of the timely interventions from the government and the assistance provided, going as far as saying, that he supposed he was able to get the entire army to do the job, but he could really just shout at the shout in the street.
He was not the President then, and never wanted to drag politics into the topic.
He was also very much a can-do person who would see through the promises he made. During his general election, he promised “The United States would eradicate poverty”, he continued, “We in America today are one step closer to triumphing over poverty than ever before in the history of any land. The poorhouses are vanishing amongst us. We have yet to reach the goal but given a chance to advance with the policies from the last eight years and with the help of God, we shall soon witness the day when poverty will be banished from this nation.”
His relations with the press and reporters were complicated and poorly handled. At his first day in the office, he held a press conference promising a “new phase of press relations”. He declined the use of a spokesman, instead requesting reporters to quote him directly and provide him handouts summarizing the statement he would make at the conference ahead of time. During his first four months in the office, he regularly held press conferences more than any other presidents preceding or succeeding him. However, he changed his press policies following the 1929 stock market crash, and frequently screened reporters and greatly reduced his availability from thereon.
His take on tax policy was always tax reductions. He advocated tax cuts for the low-income population and closed tax loopholes for the wealthiest Americans, much like what the U.S. is doing today. He proposed to advocate federal loans for urban slum clearance and gave a monthly subsidy of US$ 50 to elderly people over the age of 65, noting that no legislation was passed. He had hoped to promote the construction of infrastructure and housing aggressively and expand individual housing purchases amongst many other issues.
When it came to foreign policy, he emphasized the concept of “America First”. His government even penned a statement known as the Clark Memorandum 1930, where it amended U.S.’ past interventions significantly. He emphasized that the country should not poke their heads into everything and ordered the withdrawal of U.S. military from Haiti and Nicaragua, proposed a military embargo against Latin America and finally, suggested that the naval armament’s power be reduced by one-third.
Prior to serving in the office, he had a good relationship with American Entrepreneurs. He looked forward to and supported the concept of long-term efficient growth through public-private cooperation. He was always supportive of fellow entrepreneurs and fear that excessive government intervention would strip enterprises of their uniqueness and independence. To him, these were the two core elements to the American value.
Generally speaking, he was considered a “foe” to American immigrants. He approved the Mexican Repatriation program aimed at reducing employment competition caused by the Mexican American communities and reduced the burden of municipal assistance. The plan was implemented until 1937, during which 500,000 Mexicans and Mexican Americans were forcefully deported back to Mexico.
He was involved in tariff wars and initiated the trade war that ensued. He signed an act that raised U.S. tariffs over thousands of imported goods at that time and encouraged Americans to purchase domestic goods. Furthermore, he increased government revenue, and protected local farmers’ interests by increasing the price of imported goods. However, the economic crisis was bubbling at that time. When the trade war began, the economic crisis had already spread across the world, which led other countries to impose tariffs on U.S. goods in retaliation. Consequently, the international trades fell sharply and exacerbated the depressions that were often ignored.
Going by the history in U.S.’s economic policy, it is possible to enter a Great Depression just from tax reduction alone. Following the tax reduction, there will be a series of events that will take place. Since tax reduction can cause tensions at all levels of U.S. finances, the federal and state governments will have increasing deficits and will be forced to lay off government employees, making the government one of the root causes in rising unemployment. Of course, since tax reduction isn’t feasible in the U.S., it is often necessary to increase taxes after tax reductions to raise various other tax rates. During that period, the increase in taxes post-tax reduction in the U.S. had raised the maximum income tax rate to 63%, which was close to the level before year 1928; the real estate tax was doubled; and the corporate tax rose by about 15%.
Does all the above ring a bell? If so, well he’s none other than the 31st president of the United States Herbert Clark Hoover, not President Donald Trump.
Like Donald Trump, Herbert Hoover is an “old friend” of the Chinese and speaks fluent Chinese. He is also an entrepreneur and one of the original founders of Kailuan Group, a major Chinese coal mining company. And, he is also one of the founders of Rio Tinto Australia. He is way more capable than Trump. Just when he became President, the U.S. economy collapsed and he unfortunately only served a term. During his time in the office, the U.S. stock market plummeted in 1929, resulting in his defeat during the re-election in 1932. He only received 39.7% of votes, while his successor Franklin D. Roosevelt had 57.4%.
Final analysis conclusion:
Judging from the historical event above, the current U.S. President Donald Trump will probably suffer the same fate; Covid-19 and the Great Depression will be his undoing.
*Founder of Anbound Think Tank in 1993, Chan Kung is now ANBOUND Chief Researcher. Chan Kung is one of China’s renowned experts in information analysis. Most of Chan Kung‘s outstanding academic research activities are in economic information analysis, particularly in the area of public policy.