Question

What was Hoover’s response to the depression? why did his response fail?

Answer 1

Answer:

During the Great Depression Herbert Hoover opted for a "laissez-faire" policy with respect to the economy, meaning he believed the system of capitalism would self-correct and bounce back from devastation after the Stock Market crash of 1929 and the subsequent recession. Hoover felt that financial aid from the government would encourage people to stop working and was therefore against the develop of social services and public funds as a solution. In fact, Hoover championed the concept of "trickle down" economics, a theory that holds that the prosperity of big business and banks would trickle down to the average American because, according to him and his advisors, they would create more jobs, increase consumerism and expand production.  To facilitate this trickle-down economics plan he cut taxes for those with higher incomes. His response failed because the tax cuts for the rich simply translated to even more wealth for the wealthy, further spurring income inequality. The average American did not receive bailouts or tax breaks, bur rather was the victim of a government that was not prepared to handle such a crisis. Shanty towns developed quickly as millions of Americans suffered at the hands of insufficient crisis relief and will forever be remembered as being named after the sitting president who watched the country collapse and did little to stop it: they were called "Hoovervilles".

Explanation: