The
stock market crash of 1929 led to the Great Depression, but it was federal
government policies that led to the stock market crash. Herbert Hoover and his
administration implemented New Deal-like policies before the crash that hurt the
economy. The 31st president felt that the economy could be stimulated through “government
spending, protect jobs,” and policies that would prevent “wages from falling.”[1]
Interventionist policies on the market had drastic effects for over three years
of his presidency, and despite these failings, Hoover pushed forward. Instead
of adhering to laissez-faire principles of capitalism and a free market, Hoover
justified his doomed policies:
The past three years have been a
time of unparalleled economic calamity. They have been years of greater
suffering and hardship than any which have come to the American people since
the aftermath of the Civil War.…
Two courses were open. We might
have done nothing. That would have been utter ruin. Instead, we met the situation
with proposals to private business and the Congress of the most gigantic
program of economic defense and counterattack ever evolved in the history of
the Republic. We put it into action.[2]
As
it became clear that a depression of epic proportions was unfolding, Hoover
pushed forward with his failed economic policies. Railroads and construction
companies maintained high wages according to Hoover’s urging; which eventually
led to layoffs and as the economy worsened. The farming industry received
subsidies and “marking cartels” were formed.[3]
His policies worked more to treat the “symptoms of a disease,” but only made
“the disease worse.”[4]
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