The Reactions of Hoover and Roosevelt to the Great Depression Assignment

The Reactions of Hoover and Roosevelt to the Great Depression - Assignment Example The Smoot-Hawley Tariff Act (1930) however has been seen by historians and economists today though as something that actually made the problems associated with the Great Depression worse, not better. Those economists that believe that the economy can only benefit from lowering prices point to tariffs as a way of increasing prices rather than dropping them. Roosevelt, on the other hand, campaigned on a balanced budget and a promise not to intervene with the economy. However, once he was elected he went ahead and expanded some of Hoover’s programs and created some of his own. The minimum wage act and the Davis-Beacon Act (1931) meant a reduction is price flexibility which slowed the economy even further. The New Deal which was a program implemented under Roosevelt’s reign was actually two different deals. The first one which ran from 1933 – 1935 was aimed at inputting money at the top of the economy so that the people at the bottom benefitted from the trickle-down effect. The Agricultural Adjustment Act (1933) for example paid farmers to reduce their production. No one was actually able to explain why that would help children in the poverty end of the scale who were going without food or the countless numbers of tenants and sharecroppers who were evicted and left without a job but it did make the larger (wealthier) farmers happy. As far as helping alleviate the impact of the Depression however, it was a non-starter – consumer demand fell because of course there were fewer people with money to spend. The National Industry Recovery Act (1933) was instrumental in setting up a centralized planning scheme that would encourage businesses to set prices that would drive weaker and smaller businesses out of the marketplace completely. Again this might have benefitted larger businesses but the smaller ones were still forced to close and unemployment figures still continued to rise, meaning there was less money being spent in the economy.