Hoover’s Response Fails

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Presentation transcript:

Hoover’s Response Fails Chapter 12 Section 3

Herbert Hoover 31st President Believed that there was always a technical solution to economic and social problems

Hoover’s Idea Hoover believed in hands-off policy The business cycle moving up and down was natural

Volunteerism Hoover wanted businessmen and labors to voluntarily work toward a common goal Asked business leaders to maintain employment Suggested wealthy to give money to charity Calls on local government to provide jobs and relief

Volunteerism Fails Businesses cut wages and laid off workers Local government could not provide jobs or relief

Activist Policy Hoover begins to use federal resources to battle depression

Federal Resources Hoover creates the Reconstruction Finance Corporation (RFC) RFC provides government loans to big business and banks

Trickle-Down Economic Plan RFC loans money to large businesses to hire workers RFC loans money to bankers for business loans More business activity will lead to greater employment Greater employment will end the depression

Activist Policies Fail Businesses do not use loans to hire workers Bankers do not increase loans to businesses Unemployment remains high 1932 25% unemployment rate