The tax hikes and government aid to business did not really come until 1932, much closer to the bottom than the top. It is well worth nothing that the 90% top income tax bracket remained in place from 1932 until 1964, so it certainly did not prevent recovery from the Depression, nor did it cause the Depression. There are also scholarly reassessments of how much Smoot-Hawley actually contributed to the Depression.
It came towards the end of his presidency, but I'm not just referring to the top rate (although I personally have no doubts that does in inhibit productivity). Aside from raising the top rate from 25% to 63% he also reduced personal exemptions, increased corporate taxation, AND added a check tax. There is considerable evidence that the money contractions of the early 30s were exacerbated by the latter policy alone.Not only does this fail to address the issue of my post, but every tax you speak of further reinforces my point. The more Hoover raised taxes in 1932 under the Revenue Act of 1932 (under which all of your taxes, and more, fall under) passed that June, the more evidence there is that tax hikes did not prevent the recovery in the stock market which began that July or the recovery in the economy which began the following March. FDR again raised taxes in 1934, 1935 and 1936. Compared to June 1932, taxes in 1936 were astronomically high and would remain so for decades. During this time the Dow rallied over 300%.
The the study you linked on the money supply is rather beside the point. After being on the downtrend for years, the money supply was on a clear uptrend from 1932 to 1934, as was the national economy. So even if some marginal connection between the check tax and a reduced multiplier can be found, it was not remotely central to the causes of the Depression, and it did not prevent a strong recovery.
Reagan hiked taxes throughout the mid-1980s, a time of great expansion. Of the Clinton tax hike of 1993, Dick Armey said "Clearly, this is a job-killer in the short-run. The impact on job creation is going to be devastating." Newt Gingrich opined that "The tax increase will... lead to a recession... and will actually increase the deficit."
And we are entering a depression right now with no tax hike in sight (nor indeed any major tax hikes of any kind, except on cigarettes, since 1993)- and Obama has committed to cutting taxes, just as was Hoover's instinct in 1929. If there is a comparison, it is in that. The idea that tax hikes are always bad economic policy just flies in the face of the accumulated facts.
A.k.a. he engaged in voluntarism.
Hoover's voluntarism and his few infrastructure projects were swamped. To his credit, the size of the federal government was so small at that time and he didn't have enough time to expand it properly. The New Deal had more of an effect, but it was preceded by a dollar devaluation and shuttering the banks, remember.
Which did not come until mid-1932, again.
Edit: Also, nearly all of the loans made by the RFC were repaid, although this is probably partially a result of the program's timing. But it is worth nothing that the RFC's most active years were 1933 and 1934, just as things were turning around.
Debating conservatives on the Great Depression is exasperating. They feel so strongly about a historical matter in which the empirical evidence, as far as any historical economic story goes, is about as one-sided as it can possibly be against them. But they have so many sources and theories to try and explain it the other way. It's almost amusing. You never hear liberals trying to argue that Volcker's policies prolonged inflation. We know when we're beat.
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