Hoover and the Great Depression
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A new history of the Great Depression is emerging. One that acknowledges the role that government played in causing and prolonging it, and the constructive role that free enterprise could have played, if it were given the chance. In this video, UCLA economist Lee Ohanian explains how Herbert Hoover, widely misunderstood as a champion of the free market, actually turned what should have just been a recession into a depression due to his mistrust of the market. You can support PragerU by clicking https://www.classy.org/checkout/donation?eid=60079 Free videos are great, but to continue producing high-quality content, contributions -- even small ones -- are greater. Do you shop on Amazon? Now you can feel even better about it! Click http://smile.amazon.com/ch/27-1763901 and a percentage of every Amazon purchase will be donated to PragerU. Same great products. Same low price. Charity made simple. Visit us directly! https://www.prageru.com LIKE us! https://www.facebook.com/prageru Follow us! Twitter: https://twitter.com/prageru Instagram: https://instagram.com/prageru/ If you are an educator and are interested in using material like this in your classroom, click https://www.prageru.com/educators
Comments
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The part that conservatives dont get is that the free market DOESNT always heal itself. It isnt some magical entity that balances itself. It is a transactions between people. When you have high unemployement with low wages and you let the free market be, you will just make things worse. If people dont have money to buy stuff from businesses those businesses will go bankrupt because they dont make any profits. When they go bankrupt unemployement increases and wages go down even more. It is a cycle. Hoovers plans benefited the rich heavily. You even said this in the video he made deals with the rich to keep unemployement low but they betrayed him. It is not like they didnt have any money to pay the workers they were very profitable even in the worst times during the depression. When FDR came into office he did the opposite of what Hoover did. He taxed the rich at a very high percent and invested that money on the poor so the poor could actually use this money to buy things from businesses. He reversed this cycle. As the poor got less poor they spent more money, so the businesses which the poor spent their money on could hire more people and pay higher wages and so on and so forth
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More great content from PragerU. Keep up the good work.
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Hindsight 20/20.
Hoover and FDR could have never known when the free market would have healed itself. It could've been after 1 year, 10 years, 20 years. The Great Depression caused the extreme parties to gain popularity all over the world. Fascism and Communism were on the rise.
People living in misery tend to choose the most outrageous solutions.
Hoover's interventions might've done worse, but FDR managed to keep the economy going normally just so that extremists wouldn't have had a bid to power. -
High tariffs damaged the economy? So trade wars do not work?
Trump, pay attention... -
The simple fact is the free market doesn't need the government to step in when things get hairy. Bad businesses (the ones who refuse to adapt to conditions) are weeded out and good businesses improve. It's through economic difficulty that we often see our greatest technological advances just as war and plague advance medicine. Need begets innovation.
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The FED is the main cause the American decline. Do not trust banksters.
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And it was a democrat that saved the nation from the great depression. Funny how history repeats itself.
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Milton Friedman: Free market and let the market adjust itself. Minimum wages got to be deregulated. Factories are almost all gone in the United States and now the retailers leaving too. Middle class with college degree is now going down to the poverty level. Nothing can hurt the rich but the rest. Wake up everybody.
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The market would have never risen back if they had just left it alone
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Great Video! Thanks
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Funny he doesn't mention the huge success of Roosevelt's policies.
Hoover did nothing in comparison to FDR. -
I am here just because of wanting to read the comments
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But isn't it a government's job to at least TRY to make things better for their people? That's why Hoover and Roosevelt kept trying to fix the economy as quickly as possible so their people wouldn't suffer because of economic problems. Besides, the longer an economic crisis lasts, the more people end up supporting extreme ideas like Communism and Fascism one of which could gain enough support to take over a society and screw things up so a government can't afford to wait for the economy to fix itself as it would take far too long and by the time it DOES recover, lots of people will have died due to extreme poverty or at least greatly suffered which would be extremely irresponsible of any government to do. They have to at least try to fix the economy or make things less terrible.
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Didnt the Great Depression end with WW2? With massive government spending.
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Um are we forgetting that the federal Reserve did the exact opposite with monetary policy as they are supposed to.
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If Hoover ruined the economy by investing in public works, then how come Roosevelt fixed it by doing just that?
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But don't depressions and recessions always come after great roars of the economy
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Sowell and Friedmon have the answers
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Yeah, Hoover is from Iowa, and we have a lot of engineers!
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The only problem with the "The-Market-Will-Heal-Itself" approach is that economy is that the natural healing process may take a long time - sometimes 20+ years (like the Long Depression of the 1870s-1890s). When a good chunk of populatoin lives in hopeless squalor for a long time, there is a strong risk of proliferation of extremist ideas.
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