The Great Depression Was a Government Failure- Do You Agree?

The Great Depression was a Government failure- Do you agree?

The Great Depression was a massive collapse in the US economy that lasted for more than 10 years. There are many proposed causes to this such as the imbalance of supply and demand and the fall of market confidence shown in Source C. Hoover is also blamed for causing the depression, but how is dependent on whether you are a Keynesian as Sources A and C show, doing too little, or a monetarist, doing too much as in Source B. Hoover’s bumbling policies and the failures of Coolidge’s administration were undoubtedly main causes for the depression. The fault lines started with Coolidge but the crash came in Hoover’s administration. If we look at the long term situation the depression seems to be largely a government failure with their lack of banking regulation and policy of high tariffs, and Hoover’s lack of direct intervention with issues like relief to the unemployed, all seeming to point the finger of blame at the government.

One of the main causes of the depression was the issue of overproduction and the fact that there was nowhere to sell all of this surplus to. Tariffs put up by Coolidge to protect American goods was a double edged sword and it fell back badly, many other countries who were recovering from the war also put up tariffs to prohibit American goods onto their market, this stagnated international trade and closed off an avenue of sale. Hoover added to this with the Hawley Smoot Tariff Act which raised duties on a range of goods to an average level of 42%. This further encouraged other nations to protect their own economies and put up their own tariffs. These acts were accepted by the governments and thus the blame could be pointed to them.

Another fatal problem was the uneven distribution of wealth as Source C points out, farmers and textiles workers, and other sections of the population, did not share in the prosperity. Their pay remained low and pay rises were uncommon. This meant...