Compare and contrast the presidential reaction to the Great Depression of Herbert Hoover and Franklin D. Roosevelt.

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While many tend to fault Herbert Hoover for doing nothing to address the Great Depression, he and Franklin Delano Roosevelt actually had similar approaches to the Depression. Hoover was president when the stock market crashed in 1929. Unfortunately, Hoover, like most economists at the time, thought that the crash was just another recession that would pass with time. Recessions, or economic "panics," were considered natural parts of the business cycle that would, for the most part, be fixed with time as the economy readjusted. However, by 1931, it was becoming increasingly clear that the economy was not rebounding and that the years of unregulated speculation and credit spending in the 1920s was taking its toll. Contrary to popular belief, Hoover did not simply sit back and do nothing to fix the economy. In fact, he founded government agencies like the Reconstruction Finance Corporation to loan money to banks, railroads, and other large companies to help them avoid bankruptcy. Hoover also signed the Emergency Relief and Construction Act to provide public works projects and jobs, like the building of the Hoover Dam. However, Hoover also believed in what he called "rugged individualism," the ability of individuals to persevere, help themselves, and help others during difficult times. While he made efforts to provide relief and jobs, Hoover mostly relied on local and state agencies, along with charities, to solve poverty and unemployment. Hoover, like many of his contemporaries, feared that federal programs that were too expansive would cause people to become overly dependent on the government, which would undermine their "rugged individualism" and work ethic. State and local governments were soon overwhelmed by the number of homeless and unemployed, finding themselves without the finances and resources needed to address the Depression. By 1932, "Hoovervilles" were springing up—camps of makeshift houses and shacks filled with the homeless.

Franklin Delano Roosevelt easily won the election of 1932, especially after Hoover dispatched the National Guard to disperse the Bonus Army, a group of veterans who marched on Washington to demand their bonus pay from World War I. Two veterans were killed after fighting broke out.

Franklin Delano Roosevelt preferred a direct and government-involved approach to the Depression. Like Hoover, he did not want people to become dependent on the government. His New Deal was essentially an expansion of some of Hoover's programs, and it focused on providing jobs through public works programs. Roosevelt differed from Hoover in his willingness to use direct financial aid and in his propensity for more government control and oversight of industries and programs. Roosevelt believed in Keynesian economics, a new theory at the time, which advocated deficit spending. The key idea behind this theory was that spending money on government programs such as the Civilian Conservation Corp and Works Progress Administration would stimulate the economy. Roosevelt also attempted to reform the economy by creating agencies like the FDIC, which insured bank deposits and provided financial security to millions of Americans through Social Security.

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