Hoover and Roosevelt Ideas on the Great Depression
HOOVER AND ROOSEVELT 4
Hooverand Roosevelt Ideas on the Great Depression
Hooverand Roosevelt ideas on great depression
Hooverbelieved that using government to solve basic economic problems woulddo more harm than help economy, he urged people to help each otherand not rely on government. He implored on people to maintainoptimism and confidence on economy. Once people regained confidence,he believed that stock prices would rise factories open and peoplewould go back to work. When volunteerism and optimism failed, Hooverasked congress to save major financial institutions by establishingReconstruction Finance Corporation. He advocated for ‘ruggedindividualism’ and no relief for the unemployed (Djelic&Sahlin-Andersson,2006).
Hisrefusal to spend relief on unemployed lay in his belief of keepingthe budget balanced a deficit in the budget would mean more taxesand government borrowing which would have been hard for business toborrow and start production. Hoovers concern over budget balance,saving financial institutions, opposing relief and restoring businessconfidence were part of his policies to revive prosperity in businesswhich would then trickle down to public. He observed thatgovernment’s only task was to provide a condition favorable fordevelopment of private enterprise (Djelic&Sahlin-Andersson,2006).Sadly, his ideas failed to improve the situation as depression hithard.
Rooseveltcame with program called New deal which was more socialist thanHoovers capitalistic policies. It was a multifaceted effort to offerrelief, enhance recovery and reform. Social welfare was made aFederal government priority. His strategy was to provide relief andrestructure the US economy from top down. He facilitatedrestructuring and strengthening of banking system which in turnrejuvenated the financial sector. Direct relief food was given tounemployed, and hungry. In addition, he initiated major public workprojects that provided employment to many people. He initiated manyreforms and Acts which provided reforms in public work, socialsecurity and employment to thousands. Within the first hundred daysin office American economy began to stir from depression.
Rooseveltideas were the most effective in dealing with the depression usinghis New Deal program. It saved society from capitalism and cushionedthe weak against further devastating effects. The ideas practiced byHoover’s administration were narrow and unsustainable. In thecontemporary economic world, Roosevelt ideas would help reduceconcentration of wealth and great gap between the rich and the poor.By empowering people through social relief programs and loweringcapital consumption by large corporations, this would ensure thatcapital is available for general public use. Initiating many publicwork projects like Roosevelt did could help reduce unemployment andsustain economy as working people get money to spend and sustaintheir lives (Djelic&Sahlin-Andersson,2006).
Djelic,M.-L., & Sahlin-Andersson, K. (2006). Transnationalgovernance: Institutional dynamics of regulation.Cambridge, UK: Cambridge University Press.