Dana Blankenhorn

Who is Herbert Hoover Now?

Think of this as Volume 16, Number 30 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

---

Recessions are turned into depressions by the actions, or inactions, of people.

Why did the Crash of 1929 result in a recession so severe that the President who dithered over it wound up calling it just “a little depression” – hence the term Great Depression?

None other than Herbert Hoover.

Hoover was not a bad man, nor a stupid man. He may have been one of our brightest Presidents. And until 1929 he was widely celebrated for his work against starvation in Europe after World War I, and the destruction of Louisiana in 1927.

But in the face of collapsing asset values he dithered. He represented creditors, who expected debtors to pay their debts. The fact that the debtors were bankrupt mattered nothing. Liquidate them.

Hoover made several half-hearted efforts to ameliorate the situation. It was the Hoover Administration that created the Reconstruction Finance Corp. But he would go so far and no further, and he would go nowhere fast. First, do no harm he said.

First, do something said his opponent. Franklin Roosevelt. America believed that. FDR was not an ideologue. He was a progressive like Hoover. But he was willing to experiment, to try things, and to discard what didn't work, then try again. Mainly, he was willing to use inflation, to cut the value of the creditors' debts, to allow them to be paid in higher-priced goods. And it worked. U.S. economic growth during the first Roosevelt Administration averaged almost 10%.

So who is Herbert Hoover now?

Your Gun Culture

At the time the U.S. Constitution was written, “guns” meant muskets, and militias were what made armies.

Muskets were inaccurate, even at close range. The states saw active militias as the only protection the central government would have against insurrection. This had just been proven, in Shays' Rebellion, an armed revolt against the government in Massachusetts. The Amendment wasn't written to enable such rebellions, but to put them down. As the Whiskey Rebellion of 1791 would be put down, by militias under President Washington.

That's the real Second Amendment. It's not this “everyone gets as many guns as they want” nonsense the so-called National Rifle Association spouts. No matter how many judges or politicians may agree with them, that is just not the historical fact. It's a fiction, a lie, and those who write it are liars.

Football

The NCAA was created in 1906 because football was killing people. It was organized under the aegis of President Theodore Roosevelt because “plays” like the “flying wedge” were routinely resulting in the death of college students. He didn't want the game to become more important than human life.

The penalties imposed today on Penn State are in keeping with that mission, and while Pennsylvania is a northern state they will resonate most in the south. The last decade has seen an incredible football money chase, accelerating every year, and to say that any football program in the Southeastern Conference is subservient to its academic masters is a gross lie.

I hear it on sports talk stations all the time. What does President (Insert Name Here) know? How dare he criticize Coach (thus and so). Or when an honest coach with a losing record is fired, what's the message there? Just win, baby. And the boosters nod in sympathy.

Even in the wake of this press conference, ESPN “College Gamday” analyst Chris Fowler insisted that college athletics isn't “going backward,” that the money put into it will only go up. “It's going to be an uphill fight,” he added, but he seemed skeptical the fight will really be made. 

Coach Lou Holtz, by contrast, had it right. “College football is way too big. Coach's salaries are out of line.” But Holtz was never “just” a football coach. (Of course we thought that was true of Paterno.)

The people who wrap their lives around college football, who pore over lists of recruits like Kremlinologists, and who throw their hard-earned dollars into “seat licenses” and other gimmicks for ever-larger football palaces, they're the real enablers here. We created Joe Paterno. He never went into football expecting, or wanting to be, that guy. That he was seduced into becoming that guy tells you everything you need to know about the level of corruption, and temptation, in the sport.

It can get to anyone.

Golden Age for Writers

Think of this as Volume 16, Number 29 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

---

I'm doing pretty well these days. I write each day for TheStreet.com, do a few pieces for Seeking Alpha, and I'm usually done by noon.

But I'm not alone. These are golden days for writers.

The reason is that, while newspaper editors keep whinging they don't know how to make money and that people refuse to pay for news, lots of companies have cracked the code.

1. Identify a business, industry, or lifestyle to focus on. Politics can be a lifestyle.

2. Offer ample opportunities for interaction. Scale it. Keep people talking back-and-forth to one another. You're building a community. Focus on that.

3. Show that your community represents your target market – that you have a big share of buyers in your target – and sell against it.

4. Wash, rinse, repeat.

Days of Apps

Think of this as Volume 16, Number 28 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

---

In 2012 the software industry is like an iceberg. Most of it is under the water.

Not underwater, mind you. Under the water.

That's because the world of “applications” is over. It's all about the apps now, brutha. And no one in the app business has yet gone public. The smart VC guys and private equity people are putting tons of money into the space, so there's no need to go public, no need to give the public investor a taste.

It's like the social boom. You'll know the bust has started when one of these outfits starts looking for suckers on NASDAQ.

Doesn't mean there's no there, there. There is. I found that out Monday when I went to a “MeetUp” for Techcrunch.com at the Sweetwater Brewery, a few miles from my home.

The place was packed. Cars were parked around the corner and down the next street. (They could do it because this is a warehouse district where everyone else goes home around 5 PM.) There were well over 3,000 people there. Mostly male, mostly young, mostly white. But not exclusively. I was also pleased to find two people who rode bikes there. A guy my own age who admitted he'd taken the train to a nearby transit stop, and a younger guy who'd ridden 8 miles in rush-hour traffic. 

Repealing the 20th Century

Think of this as Volume 16, Number 27 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

---

Of all the past crises in American history, today's has most in common with that of 1896 and the years following it.

In other words, we're playing the 1900 game.

As was true at the dawn of the progressive era, today's political argument is over a new economic order. The difference is that the rising tide of that era – mass production, scaled energy – is the falling tide of our time.

Of course that's not the way the other side sees it.

Oil's view is that the entire 20^th century consisted of  an insane set of mistakes, and their goal is to move us back to the “glory days” of the 1880s, a time when things like regulation, the social safety net, and government of the people rather than the oil-a-garchs had yet to be born.

Back when this guy was the face of American business.  (To see him again, click for more.)