Hoovers policies and attitudes in the years 1929-33 Essay

Asses the view that Hoover’s policies and attitudes in the years 1929-33 merely prolonged the depression. President Herbert Hoover came in to power in America in 1928. He was a man with a strong belief and he believes in individualism and believed passionately in the values of hard work and enterprise. However, he came in power at a time where America was in an economic crisis, where unemployment was shooting up as well as inflation, America had entered a new era where inequality was increasing more than ever for example New York had one million unemployed whereas Ohio has 50% of the population unemployed, thus it was vital for Hoover’s policies to be adequate in order to restore prosperity. Source 7 clearly argues that Hoover’s attitudes and policies were inadequate and â€Å"failed again and again†. Similarly, source 8 believes that his faith in his own policies has only prolonged the depression even more, thus both sources have a clear consensus between them. On the other hand source 9 argues that a lot was actually done in order to get Americans back on their feet, thus Hoover’s attitudes and policies were good for America. However, it is clear that Hoover simply did not do enough in order to deal with this economic crisis as he was seen to be as a very â€Å"stubborn† person as source 7 argues and he simple could not read between the lines. Source 7 describes Hoover as a very stubborn person who â€Å"Remained convinced that he was right† Hoovers attitudes towards agriculture did not help American farmers at all. The agricultural marketing act was established in 1929 which artificially purchased farmers surpluses at prices above the market price. Hoover gave the Federal Farm Board $500M, yet Hoover still not think through exactly what he was doing. The agricultural market was in a significant decline in America during the 1930s and he only encouraged farmers to produce more as the Federal Reserve board was purchasing their surpluses. Furthermore, he was accused of throwing away tax payers money which was extremely regressive. Similarly, source 8 believes that Hoover undertook some â€Å"harmful policies† where he also â€Å"resisted congressional attempts to provide more substantial farm relief† this can be seen through the fact that instead of putting money into farmer’s pockets he actually took it away. Farming was seen as the backbone of the American economy and Hoovers Agricultural Marketing Act seemed like something that was rushed and never thought through which emphasises how Hoover simply lacked knowledge in many areas of the economy. Furthermore, he never thought about agricultural on an international level and the consequences his actions would have, thus his attitudes towards individualism was clearly not applicable to American society at that time as American clearly needed a Keynesian approach towards the economy where money would be significantly pumped in to the circulation of the economy. Source 8 also believes that the Hawley-Smoot Tariff was significantly damaging towards Americans â€Å"which he signed despite the advice of most economists†. This emphasises his attitudes towards his policies, he in his own â€Å"fantasy world† as source 7 also describes as he simple did not have any fixed approach towards fixing the damaged economy. Hoover did not realise exactly what was needed for the American economy as if he did, he would have realised that putting a 40% duty on agricultural products would not have stimulated the economy. This fantasy world consisted of just his own approach, which was not thought through, he believed just because he had a very hard work ethic meant that everyone else could have one too, however, this was not the case in America as Americans simply had no money in their pockets to start them off and they needed relief in order to get back on their feet again. Furthermore, his policies had a very short run effect as he believed by putting tariffs up it would help farmers gain more revenue. However, with agriculture being such a competitive market, it only led to retaliation as countries all across Europe could not afford high prices as they were in an economic crisis too. Furthermore, the Hawley-Smoot tariff resulted in the abandonment of free trade amongst European nations, thus it was extremely damaging for the agricultural market as they could not sell their surpluses and had to eventually dump their goods in different countries, therefore Hoover did pro long the depression. Furthermore, source 8 also argues that Hoovers approach towards unemployment was also not good enough as he â€Å"blocked direct aid to the unemployed†. This is because of his hands off approach attitude that he undertook during the 1930s was not radical enough and could be seen as taking things â€Å"too modestly† as source 8 states. The Emergency Committee for Employment aimed to help agencies provide relief of $500, however, due to his self-reliance attitude he did not allow direct federal relief. This clearly shows how Hoover was not thinking ahead and his attitudes were far behind time as he did not realise exactly how badly Americans needed the governments help and it was crucial to intervene in the economy as much as possible. However, Hoovers $500M was not large enough to help the millions of people in America who were unemployed and did not have the basic necessities in life, growth was literally not possible without the government intervening as GDP was getting lower and lower. However, taking into account that many countries were in a nation debt, it was obviously not possible for Hoover to magically get a large sum of money in order to give relief to firms and other sectors, thus there was actually a limited amount that Hoover could do even though he did have a hands off approach towards America. Source 9 completely contradicts source 8 and 7 as Leuchtenburg believes Hoover â€Å"Stepped up federal construction and urged state and local governments to accelerate spending† thus Hoover did make significant changes that did not pro long the depression. One of his most significant polices was the reconstruction finance corporation which was authorised to lend $1.5 billion to states to finance public works. Not only was this a very direct relief but it also had many benefits as it helped insurance companies as well as banks. One major aspect of the RFC was the fact that it lent 90% to small and medium banks, which was a turning point as rural small banks were hardly ever noticed and no other president intervened the way Hoover did and this contradicts Patterson’s view of Hoover having â€Å"minimal government intervention†, thus his lack of intervention may have been exaggerated by source 7 and 8. The â€Å"increased capital investment† as source 9 suggests also helped the economy as investment was a crucial part of GDP and investment would have allowed firms to innovate in America, thus Hoover had noticed the â€Å"grim reality† of the depression as he was doing what he could have in order to restore the economy. However, the RFC was only available to states that declared bankruptcy and they had to use the money to provide schemes which would earn money so that loans could be repaired and this perfectly fits in with Parrish’s view of how the â€Å"economic crisis required maximum cooperation† , which Hoover was not giving at that time as all banks and businesses needed some sort of relief which he was not doing. Furthermore, even if he was cooperated it was a little too late, thus Hoover did pro long the depression. Overall, it is clear the Hoover’s approaches were not good enough for American society in the 1930s and he did pro long the depression. One vital error that Hoover made was the fact that he was not helping the unemployed as much as he should have as in order to stimulate the economy, a wage was needed and with a wage tax could have been paid which could have been used to fund the public with goods. Therefore, if Hoover had considered getting people into work this would have automatically had a positive knock on effect. Furthermore, a hands off approach was not needed in times of the depression as Americans did not have money to get back on their feet as many banks were not giving out loans due to the effects that the boom period had on them, therefore a lot of intervention was needed. Thus, it is clear that Hoover did make big mistakes during the depression as he did not see the reality of it and did not try to tackle the main problems as he had no detailed plan.