Economic Philosophy
The 1920s began with the election of president Harding, and continued with presidents Coolidge and Hoover. These conservative republicans and their economic philosophys are what caused such a drastic change in the economy. "Rugged Individualism" and "Laissez Faire" were two popular ideas these leaders shared and carried out. Both of which involved stepping back from the economy and the people, and giving them as much room as possible to grow. Previous to 1920, there were 2 decades of reforms and regulations to protect the businesses and the people. This time period, known as the progressive era, was a time government dedicated to regulating the economy. No time period contrasts the progressive era better than the 1920s.
Rugged Individualism was a philosophy used by these presidents, more specifically, President Hoover. The idea was that the government should leave the people of the nation alone, and provide no support to them. It was believed that citizens could be successful with ought governmental aid, given that they work hard. Hoover even stated "The lesson should be constantly enforced that though the people support the government, the government should not support the people" (Textbook 4). This statement manifests just how strongly hoover preached this idea of Rugged Individualism.
Instead of babying the businesses, like they did during the progressive era, the government let them be in the 1920s, due to the belief in "Laissez Faire". This philosophy is held largely responsible for the dramatic growth, and then downfall after the progressive era. The Idea was for the government to decrease involvement in the economy. President Coolidge even stated: "If government kept its hands off the economy, business would prosper" (Textbook). This idea was carried out as far as possible during the 1920s, and it worked, giving the nation prosperity. That prosperity was only temporary, however. Every day the economy seemed to be growing, but was really growing more unstable until it couldn't stand.
In 1929, the stock market crashed, and in the next 10 years, almost 10,000 banks failed. This time period (1929-1930), known as the Great Depression, was a result of the economic philosophies of the 1920s. Rugged Individualism and Laissez Faire depleted the economy and population of Government control and aid, and led the nation into the worst economic downfall of its existence.
Rugged Individualism was a philosophy used by these presidents, more specifically, President Hoover. The idea was that the government should leave the people of the nation alone, and provide no support to them. It was believed that citizens could be successful with ought governmental aid, given that they work hard. Hoover even stated "The lesson should be constantly enforced that though the people support the government, the government should not support the people" (Textbook 4). This statement manifests just how strongly hoover preached this idea of Rugged Individualism.
Instead of babying the businesses, like they did during the progressive era, the government let them be in the 1920s, due to the belief in "Laissez Faire". This philosophy is held largely responsible for the dramatic growth, and then downfall after the progressive era. The Idea was for the government to decrease involvement in the economy. President Coolidge even stated: "If government kept its hands off the economy, business would prosper" (Textbook). This idea was carried out as far as possible during the 1920s, and it worked, giving the nation prosperity. That prosperity was only temporary, however. Every day the economy seemed to be growing, but was really growing more unstable until it couldn't stand.
In 1929, the stock market crashed, and in the next 10 years, almost 10,000 banks failed. This time period (1929-1930), known as the Great Depression, was a result of the economic philosophies of the 1920s. Rugged Individualism and Laissez Faire depleted the economy and population of Government control and aid, and led the nation into the worst economic downfall of its existence.