Navigating the Slippery Slope: How Hoover’s Interventions Paved the Way for the Great Depression

Source: Ludwig von Mises Institute
by Vibhu Vikramaditya

“Herbert Hoover’s presidency is often mythically mischaracterized as a period of strict nonintervention in the economy. However, it was in fact defined by a series of economic maneuvers that not only deviated from laissez-faire ideology, but also significantly contributed to the onset of the Great Depression. He initiated his term in 1929 with a proactive push by establishing the Federal Farm Board and later the Reconstruction Finance Corporation. These testified to his interventionist approach, aimed at countering economic instability with federal support that ranged from agricultural price supports to protective tariffs and substantial public works investments. These policies failed to grasp the underlying economic frailties that, combined with a long recession in overexpanded agriculture, inadvertently magnified the crisis.” (03/26/24)