The Reactions of Hoover and Roosevelt to the Great Depression, Essay Example

The Great Depression was an unprecedented economic crisis in American history, eviscerating the financial sector of the country and thus negatively affecting the life of all common proletariat Americans. In light of the crisis of the Great Depression, American leadership at the highest levels was forced into proposing adequate responses to re-stabilize the economy and thus by extension ameliorate the social conditions of the common man that were heavily damaged by this economic disaster. The particular individuals who presided over the highest office in the United States, the Presidency, during this time of crisis – Herbert Hoover and Franklin Delaware Roosevelt respectively – nevertheless proposed different solutions to the problem. On the one hand, Hoover’s liberalist beliefs in the limited role of government in political life meant that his presidency did not take any radical action in regards to the Depression, whereas, on the other hand, Roosevelt, having seen the failures of Hoover’s plan, took the opposite course of heavy government action, arguably most clearly demonstrated in the so-called New Deal program.

Hoover, falling his own ideological program, felt that the Great Depression was the result of the general world economy. Accordingly, it was merely another event in endless economic cycles. Instead of endorsing that the government take an active role in alleviating the catastrophe, he rather pursued a course of action that was consistent with his liberal world-view: continuing to minimize government intervention in the economy. Hence, for example, Hoover demanded tax cuts, while also supporting the so-called “trickle-down” theory of economics, according to which it was believed that investing in the upper echelons of society, i.e., the elite holders of capital, would eventually have a positive effect on the middle and working classes, who were devastated by the Depression.

The fact that Roosevelt came to power after Hoover, bearing an entirely different ideology, demonstrates that Hoover’s economic ideology was insufficient to addressing the massive problems instigated by the Great Depression. The comparison between Roosevelt and Hoover is therefore especially interesting in this context, because Roosevelt essentially pursued the exact opposite course of Hoover. He understood that the government bore a responsibility to its citizens during this time of crisis, and must therefore attempt to alleviate the situation on all levels of society. Roosevelt’s economic reforms of this time period are referred to as the New Deal, and represent deliberately planned and decisive actions by the government to improve the situation. For example, the passing into law of the Banking Act of 1935 meant that the U.S. government would have greater control over banking and the economy. This was deemed necessary because the irresponsible actions of the financial sector had condemned the U.S. to the Depression. Insofar as Roosevelt’s reforms led to the U.S. leaving the Depression behind, it can therefore be suggested that Roosevelt’s economic ideology was superior to that of Hoover’s.

Yet the contrast between Hoover and Roosevelt’s acts vis-à-vis the Great Depression is even more compelling when we consider their respective economic ideologies in light of their impact on subsequent American history. The differences between Hoover and Roosevelt continue to repeat themselves to this day, for example, in the form of Republicans who emphasize limited role of government intervention in the free-market. For example, Reagan in the 1980s promoted a trickle-down economic policy that appears to have been lifted directly from Hoover’s playbook. At the same time, the recent financial crisis of 2008 shows that some of the lessons of American history have not been learned. Roosevelt’s response to the Depression in forms such as the Banking Act of 1935 attempted to curtail the unlimited plundering freedom of the financial sector: it was this same unbridled freedom that caused our most recent economic crisis. Yet the response to this crisis was to save the banks and those that caused the crisis with their irresponsible financial speculation: in this regard, the lessons of history have not been learned.