As a general rule, the farther back in time one travels, the more difficult historical analogies become. The American economy was a very different beast in 1787 when the founding fathers drafted the U.S. Constitution. There were only three banks in the entire country and Spanish silver dollars could still be used to pay taxes. The poor state of overland transportation made it much more convenient, cheaper, and timely to ship goods from Philadelphia to London than to Pittsburgh.

By the 1820s and ’30s, America was quickly becoming a more industrialized economy, though modern observers may still regard the complex details of the political and economic convulsions of this period as akin to visiting a foreign country. This was the era of “the Bank War,” President Andrew Jackson’s famous political conflict with Nicholas Biddle, the president of the Second Bank of the United States.

The Second Bank was the Federal Reserve of its time. Like today’s Fed, which adjusts interest rates in order to provide price and employment stability, the Second Bank served as the nation’s central bank and performed important regulatory functions. It serviced the nation’s public debt, managed the Treasury Department’s fiscal priorities, propagated a nationwide uniform currency, and curbed excessive lending among the country’s numerous state banks. Through its network of branch offices and overseas agents, the Second Bank facilitated domestic and international trade.

But the financial tools available to Biddle and the Second Bank were limited compared to what’s currently at Fed Chair Jerome Powell’s disposal. Biddle could make minor adjustments in the nation’s overall money supply by selling government bonds, for example, but this measure paled in comparison to the complex and far-reaching operations conducted by today’s Fed. To inject money into our sputtering economy and lower interest rates today, the Fed purchases trillions of dollars of U.S. Treasury bonds and other assets. It acts on a scale unimaginable to anyone living in the 1830s.

This and other remarkable differences between the political economy of the U.S. in the 1830s and today render tenuous any direct comparisons between the two eras. Today’s GDP of $20 trillion is several hundred times greater than the $1 billion economy of 1830, which is equivalent to about $50 billion in today’s money. The Treasury Department, which collected around 90 percent of its revenue from tariffs, often ran budget surpluses (a rarity over the past century). Information didn’t flow with the ease it does today. It took at least two weeks to deliver a newspaper from Washington, D.C., to St. Louis. For a variety of reasons, there were no reliable unemployment statistics at the national level. Seventy-eight percent of the workforce was agricultural at the time, compared to less than 5 percent today. Slavery was fundamental not only to the South’s political, social, and economic structure, but also to the nation’s.

Today’s policymakers are thankfully not drawing inspiration from the antebellum era—a time in which risky financial institutions sometimes constructed houses of cards that collapsed into devastating economic panics, and did little to alleviate the crises’ worst effects. But some leaders are trying to take cues from the U.S. response to the Great Depression. In the late 1920s, a perfect storm of events came together to create the worst economic crisis the nation has ever faced: a roughly 10-year period of widespread bankruptcy, rural poverty, mass evictions and migrations, urban bread lines, falling wages, crippling deflation, idle factories, and workers’ strikes.

No single factor caused the Depression, and no single policy ended it. The stock market crash of October 1929 wiped out the life savings of millions of Americans, making them more reluctant to spend money. But even before the crash, numerous red flags signaled a struggling economy. Falling commodity prices made it difficult for farmers to pay back loans. Major economies in Europe struggled to meet the debt payments and reparations left over from World War I. High tariff rates strangled world trade. Economic inequality and a weakened middle class stunted consumer demand.

All of these worrisome developments were amplified and transmitted to the rest of the world through the international gold standard, a factor that historians and economists often point to in order to explain the severity and duration of the Depression. This was a system where most of the major world currencies were exchangeable in gold on demand, at a fixed rate. Neoclassical economists of the time believed that such a system would be automatic and self-regulating, requiring no intervention or regulation by central bankers.

But the gold standard did not work as intended. One of its many flaws was that countries did not always abide by the same rules, a phenomenon resembling the imbalances that plagued the Eurozone in the last decade. In 1931, the Fed made what was, in retrospect, a terrible blunder by raising interest rates. The nation’s central bank was attempting to rein in the excessive speculation in stocks that had contributed to the crash of 1929 and at the same time acquire enough gold to uphold a strong dollar. Conventional economic thinking held that this was the right move. But with the country already mired in a deepening recession, raising interest rates proved costly: Nearly one-third of the country’s banks failed, foreign investment declined, and unemployment levels approached a staggering 25 percent. Central bankers in virtually every major economy around the world made similar mistakes. Only when countries abandoned the gold standard did recovery begin.

The actions that ended the Great Depression provide clues to the sorts of things central banks and regulators can do to help—but they hardly offer us easily translatable solutions for the current crisis. We have no gold standard to abandon today. New Deal agencies inaugurated the modern welfare state, imposed stricter financial regulations, and recognized workers’ rights to collective bargaining, but some of them also perpetuated the racism of Jim Crow. Work relief programs like the Works Progress Administration (WPA) employed millions of workers, but it was really government spending on the military during World War II, furthered by the growth of the Cold War military-industrial complex, that ushered in an unprecedented era of American prosperity. So, would increasing America’s already-enormous military budget be helpful today?

The larger point here is not to eschew historical analogies or ignore the instances in which they can deliver fairly straightforward verdicts on policy questions. Rather, it’s to note that even expert knowledge of previous recessions may only help us so much in the current chaos; there will always be some degree of uncertainty and contingency in the way things panned out.

While we have an extensive historical record of what conditions and policies helped the U.S. recover from the Great Depression, we will never have the scientific certainty of running an experiment 100 times to see if it was FDR’s confidence-inspiring speeches, or raising the price of gold, or creating the WPA, that helped the most. All we have is the singular experiment of the historical record. An approach to history that leaves plenty of room for ambiguity and uncertainty allows us to appreciate the uniqueness of the past and present, to note significant changes over time, and perhaps above all, to recognize the limits of our expertise.

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This inclination is rooted in a sense of optimism, and the confidence that we learn as we go. But it can also reflect a degree of hubris, and the mistaken notion that those who came before were not so clever as we today. When that happens it can blind us to the obvious truth that our forebears possessed wisdom as well as ignorance, and can lead us to repeating mistakes that might well be avoided.

Take the case of Herbert Hoover, America’s 31st president but also considered an exemplar of economic mismanagement for his futile response to the onset of the Great Depression, which arrived to the fanfare of the famous stock market collapse of 1929.

Prior to my undertaking a study of Hoover’s single term in office, I shared that view of Hoover. I still see Hoover as a failed president, unable or unwilling to cultivate the personal bond with the electorate that is the ultimate source of power and influence for any elected official. The more I learned of Hoover’s policies, however, the more impressed I became with his insight, vision, and courage—particularly when it came to managing an economy turned hostile. I found, too, that time has done little to discredit his trepidation over the consequences of mounting debt.

When the crash hit the stock market, it set off a collapse in values not only of financial instruments like stocks, but also a global slump in commodity prices, trade, and, soon after, employment. In the White House, Hoover responded in what was for him typical fashion: a brief, terse statement of confidence, asserting “the fundamental business of the country … is on a very sound basis.” At the same time, but quietly, Hoover pressed the members of his cabinet to ramp up federal spending to provide work for the wave of unemployment that he privately predicted. Finally, he convened a series of “conferences” with business leaders urging them to maintain wages and employment through the months to come.

These conferences were derided at the time, and more sharply later, as indicative of Hoover’s subservience to the capitalist class, but that is unfair. Hoover’s overriding commitment in all his years in government was to prize cooperation over coercion, and jawboning corporate leaders was part of that commitment. In any event, the wages of American workers were among the last casualties of the Depression, a reversal of practice from the economic downturns of the past.

More telling was the evolution of Hoover’s response as the Depression progressed, spreading from a market crash to the worldwide economic disaster that it became. Peoples and leaders across the globe took the failure of markets, currencies, and policies to mark the death rattle of capitalism per se, and turned to systemic, centralized solutions ranging from communism, exemplified by Soviet Russia, to fascism.

Hoover never accepted the notion that capitalism was dead, or that central planning was the answer. He insisted on private enterprise as the mainspring of development and social progress, and capitalism as the one “ism” that would preserve individual liberty and initiative. It appeared as establishmentarian cant to many of Hoover’s contemporaries, but Hoover’s instincts look like insight today.

More than that, Hoover recognized what appeared a failure of the capitalist system for what it was: a crisis of credit. With asset values in collapse and large parts of their loan portfolios in default, banks stopped lending to farmers, businesses, and builders, stalling recovery, stifling consumer spending and throwing more people out of work. It was a vicious cycle, soon exacerbated by the failure of thousands of rural banks that only added pressure on the financial system.

Hoover’s answer was to stage an unprecedented government foray into the nation’s credit markets. He conceived of a new Federal Home Loan Bank system that would offer affordable loans at a time when mortgages generally covered only half the cost of home building, and ran for terms of just three to five years. Such a novel proposal naturally bogged down in Congress, and it took most of Hoover’s term to get an agency up and running; in the meantime, Hoover fostered similar moves in agriculture, channeling more funds to the existing Federal Land Bank System. In 1932, for instance, Hoover’s agriculture secretary supervised $40 million in small loans—$400 and under—that helped 200,000 farmers get their crops in the ground.

As the crisis deepened, Hoover turned his attention to the banking system itself. First he called to a secret conference a clutch of the nation’s most powerful bankers and browbeat them into creating a “voluntary” credit pool to backstop the balance sheets of the more fragile institutions; when that effort failed, the president launched a new federal agency to make direct loans to ailing banks, railroads, and other major corporations. Authorized to issue up to $2 billion in credit—more than half the federal budget at the time—the Reconstruction Finance Corp was the first time the federal government took direct, systemic action to shore up the country’s private finance markets. It anticipated TARP, the Troubled Asset Relief Program, by roughly 80 years.

Hoover broke ground on still another financial front, and that was monetary policy. Venturing onto the turf of the Federal Reserve, Hoover pressed to expand the money supply by increasing the kinds of financial paper that would qualify for Fed reserves, thus increasing the amount of funds available to lend, and by advocating Fed purchase of large quantities of debt. Such purchases are termed “open market operations” and are a means of expanding the money supply, thereby (theoretically) lowering interest rates and easing credit. Carried out on large scale they are what today we call “quantitative easing.”

Here, however, Hoover ran up against one of his core beliefs—that the currency should be convertible to gold. He felt that maintaining easy convertibility for the dollar, based on the gold standard, was critical to trade and business confidence, and so opposed every measure that might be considered inflationary. At the same time, he understood that low interest rates and easy credit markets could foster investment and recovery.

Torn between his allegiance to sound money and his insights into the state of the economy, Hoover was unable to push his credit plans to the hilt. That is, he backed off from mass bond purchases before the credit markets had a chance to respond, and set too high the collateral requirements for the Reconstruction Finance Corp. loans for banks.

Hoover wanted high collateral requirements because he did not want to assist insolvent banks, just those with liquidity problems. Banks needed to show that, in the end, they could cover the loans. Hoover was also pressured on the same grounds by lawmakers on his left and his right to make sure he wasn’t throwing good (public) money after bad (private) money. It’s worth noting that none of those in government at the time had seen lending to private parties—let alone banks—on such a scale before. So they adopted a very conservative approach, which they loosened after gaining some experience, and after a new president had entered the White House.

Indeed, it was left for Franklin Roosevelt to pick up where Hoover left off. That is not to say that FDR did not represent a change in course for the country; his New Deal was a distinct point of departure. But it’s also true, as FDR advisor Rex Tugwell put it later, that “practically the whole New Deal was extrapolated from programs Hoover started.”

That Hoover failed in the White House is a matter of accepted wisdom, and in certain fundamental ways true beyond doubt. Far less known are the nuances of what he did right—his insights into capitalism, what makes it work, and how to answer its setbacks. But in a larger sense Americans are living with Hoover’s legacy. For better or worse we remain the global citadel of capitalism, the leader in economic growth and income disparity. To those wondering how we got to this point, some measure of credit has to go to Hoover, an unpopular president who followed his core beliefs at a time when many abandoned theirs.

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