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This essay will discuss why President Herbert Hoover was blamed for the Great Depression. It will examine his economic policies and response to the stock market crash of 1929, analyzing how his actions and inactions contributed to the public perception of his presidency during this crisis. The piece will explore the various factors that led to the Great Depression and how Hoover’s approach to government intervention and relief efforts were viewed at the time. It will also consider the historical reassessment of Hoover’s presidency and the complexity of the causes of the Great Depression. At PapersOwl too, you can discover numerous free essay illustrations related to Economy.
President Herbert Hoover is often blamed for the great depression for many reasons, he had ideas put into place that were meant to aid the problems in the economy but hurt it instead. Pro-labour policies made by President Hoover after the stock market crash of 1929 caused the majority of the nation’s gross domestic product to decline over the next two years. This made what could have been a bad recession turn into the Great Depression. There were many reasons for the Great Depression, but the recession was worse than it would have been because of President Hoover.
President Hoover worsened employment more than it would have been because he kept wages too high for firms to keep up, this made the total gross nation product decrease. Hoover’s policy was an important event in causing the Great Depression. His policies on job-sharing and increasing wages were much of the reason for the decline.
How it works
Hoover’s attempts to fight the Depression were not powerful enough to defeat it. He believed too deeply in laissez-faire; where the economy fixes itself eventually. He seemingly did not try hard enough to mend it himself, because of this the economy suffered dramatically.
The president was worried that the stock market collapse of 1929 would lead to recession and deflation, this would cause dramatic wage cuts and there was a probability of strikes if employees were not pleased with the wage cuts. Instead of having workers fired, President Hoover thought of a policy where wages were kept high and workers shared tasks. He thought this would help improve the economy because people would be able to buy more goods and services, but it had an unintentional effect.
President Hoover made a deal with dominant business leaders, to preserve salaries and establish job-sharing in order to try to keep as many people employed as possible. Many businesses acted accordingly to the presidents wishes, some even publicly broadcasted that they were complying with Hoover’s ideas. The idea was supposed to soothe problems, but it did the opposite. After deflation set in, the value of wages increased. This led to workers getting raises during a time when firms were not able to afford the increases and productiveness was starting to decrease. This ended up increasing the price of labour and production.
The president’s policies to start sharing jobs and freezing wages was a significant element during the depression. Firms continued to try to comply with President Hoover’s policies, so they fought this problem by firing employees and making the work hours shorter.
Another commonly known cause for the depression was that too many banks invested their money into the stock market, so when the stock market crashed the Federal Reserve could only cover a small portion of the banks. When the banks failed, savings accounts were cleared, and the money supply decreased (“Was President Herbert Hoover Responsible for the Depression?”). The dilemma is both problems where not obvious until two years after Hoover put these bad policies into place.
Businesses asked Hoover to relieve the wage freeze, but he continuously denied. Then they asked if they could increase prices on goods and services, but the president was opposed to that idea too. Companies had no choice but to stop following Hoover’s ideas because by then the depression was in full swing.
There are many reasons to why President Hoover is blamed for the depression. In fact, he was one of the main causes to why the depression was worse that it would have been without him. His pro-labour policies, wage freeze and job-sharing ideas were detrimental to the economy. He meant to do good by his ideas but did not calculate what the negative effects would be. Therefore Hoover is so often blamed for the Great Depression.
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