In fact, Herbert Hoover did believe that the government should act to improve the economy. The old story of his belief in "rugged individualism" has been widely misinterpreted. Hoover was opposed to direct aid from government to individuals, but never took a hands off, laissez faire attitude. Among the efforts to solve the depression implemented by Hoover were:
- The Reconstruction Finance Corporation which funded loans to banks, railroads and insurance companies to prevent these companies from going bankrupt, which would, in Hoover's view, deepen the depression.
- The Federal Home Loan Bank Act created Savings and Loan institutions to provide loans for home ownership.
- $750 million in gold was released from the treasury to put more money into circulation in an attempt to stimulate the economy.
- The Emergency Relief and Construction Act authorized over one billion dollars in public works projects.
So, Hoover's approach was anything but "hands off." He did believe that the American people needed to show some initiative to end the Depression, and not wait on the government to solve it for them; at the same time, he did not expect the government to sit back and let people solve it for themselves. The only government involvement he opposed was direct Federal government involvement with individuals. Rather he believed the proper way to stimulate the economy was to stimulate business and public works through the states.
President Hoover's political philosophy is generall called "rugged individualism." This was a type of laissez faire economic conservatism. Hoover believed that it was important that the government should not interfere in the economy any more than was absolutely necessary. He felt that government efforts to help people who were hurt by the Depression would lead to people becoming dependent on the government. Instead, he wanted people to help themselves. If they were going to need any help from the outside, it should come from private charity and not from the government.
So, Hoover's main philosophy was one that called for the government to stay out of the economy and let people cope for themselves.