Providentially, a full week before Krugman's latest adventure in economic history, Phillip Scranton authored a fascinating post on Bloomberg News' Echoes Blog that is quite relevant to the very issue in question. In his post, "Hoarding Cash After the Crash," Scranton documents President Hoover's effort in moral suasion, encouraging people to put their money back in banks, so banks can start lending again. What is quite prescient for the question of Hoover's economic policies are the perceptions of those contemporaries affected by his policies. Scranton quotes from the diary of Benjamin Roth, a lawyer from Ohio.
"Even those who invested after 1930 -- after the crash -- at what they considered bargain prices, now find their 'bargains' selling at half price or lower." He added: "Business shows no sign of pick-up. People are already looking toward the next presidential election when a Democrat will probably replace Hoover. In the meanwhile, Hoover adds to his long list of artificial stimulants."