Keynesian Economic Policies Of Herbert Hoover During The Great Depression

When the Wall Street Crash of 1929 ushered in the Great Depression—ten years of economic and social devastation—the world grinded to a halt. Herbert Hoover was in his first year in office when he suddenly became the face the world looked to in solving the crisis. Initially, he aimed for a path of voluntarism—based on local and state government working to solve the problems of their specific communities. When he left office in 1933, the American economy remained in shambles. His successor, Franklin D. Roosevelt, however, successfully brought the American economy out of the ashes and, through Keynesian economic policies, restored stability to working peoples’ lives. Herbert Hoover was driven largely by policies of voluntarism; he supported big

He did enter the presidency with plans for key reforms, designed to address the most pressing issues of the day—before the Great Depression was deemed possible. While he had a small arsenal of plans, his major faults lay in his methods of enactment. He believed in utilitarian business strategies, often given the moniker “Henry Fordism,” he rarely challenged Congress or asserted a strong, presidential presence. Additionally, his firm belief in individualism and the voluntarism of local-level governments made the necessity for governmental intervention through fiscal policy (especially in these most dire of circumstances) a far-removed idea to

Roosevelt in 1933, the American economy was not in a better state by any means. In fact, Hoover’s Smoot-Hawley Tariff Act—aimed to encourage the purchase of American-made goods—resulted in diminished international trade aggravated the depressed economy even more. Immediately upon taking office, Roosevelt began his “First Hundred Days” Program, passing a slew of economic and social legislation—all part of his New Deal. However, Roosevelt did not diverge completely from Hoover’s policies; instead, he continued the Federal Emergency Relief Administration and created the Civilian Conservation Corps (CCC), Works Progress Administration (WPA) and Tennessee Valley Authority, which hired hundreds of thousands of unemployed men to work on rural, local-level projects. Socialism? Yes; but Roosevelt was a proponent of Keynesian economic theories such as monetary and fiscal direction by the federal government, and he knew that in the direst of circumstances—as was the Great Depression—such policies are the key to regaining stability at a national level. Socially, Roosevelt protected laborers and farmers through the National Labor Relations Act (NLRA) and Agricultural Adjustment Administration (AAA). He established Social Security, the Securities and Exchange Commission (SEC), and the Federal Deposit Insurance Corporation (FDIC), all of which have lasted unto the present