Ashley Gyer
US History
Chapter 21 Blog
November 12, 2009
Why did Hoover’s policies fail to solve the country’s economic crisis
1. He felt the goverment should not meddle, “because periodic depressions were like storms that couldn’t be avoided”
2. He thought providing direct aid to individuals was unconsitutional
3. He said “economic depressions can’t be cured by governmental action or official decree”
4. He called on busineses to not reduce wages or jobs
5. These busineses didn’t do as he asked because they were protecting their own interests.
6. He called on the goverment to reduce taxes on businesses to put more money in “business,” thinking “trickle-down economics” would solve the problems
7. He had Reconstruction Finance Corporation formed to get money in hands of banks, hopping “trickle-down economics” would get money to the people.
8. This didn’t work as planed because the banks didn’t increase their loans to busineses, and busineses didn’t use the loans they received to hire more workers
9. Because of this the money did not “trickle-down” to the people who needed it.
What would I suggest that he do differently?
1. Consideing the unemploment rate of 25%, the creation of jobs was a key part of recovery
2. The billions dollars that the Recovery Finance Corporation loaned to banks should’ve been monitored and proper loans by the banks and investments by industry to make jobs should’ve been a must for making the loan.
3. Money should’ve been made available by Congress to start other public works projects (Like the Hoover Dam project) in order to make new jobs.
4. Money should’ve been made available to directly aid folks and families that needed help in saving their homes and providing money for food and lodging if needed.
A very good critique of Hoover's approach to the Depression. After reading over this, what strikes you as the main reason that he did not succeed in putting together a successful set of policies to attack the Depression? What were the main reasons holding him back? Having a good handle on Hoover's mindset helps you here and will enable you to compare FDR's approach. FDR builds on some of the things that Hoover does --particularly with the RFC --but he's willing to take actions that Hoover is not. The RFC is important. Make sure you understand what "trickle down" means in this context.
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