There was a significant difference in the Federal Government's reaction to the prosperity of the Roaring Twenties and the economic disaster of the Great Depression. Hoover's decision to maintain a laissez-faire approach ultimately failed. When Franklin Roosevelt came to office, he imposed the New Deal, which drastically altered the Federal Government's role in the economy and created a very proactive approach to combating the depression.
President Herbert Hoover was the president in office at the time of the stock market crash and the start of the Great Depression. He believed that a laissez-faire approach to government was best and upheld these beliefs in his attempts to resolve the nation's economic problems. Hoover thought that trickle down economics would be the solution. Trickle down economics is the concept that the rich will spend their money at businesses in the U.S. which will "trickle down" and put money in the paychecks of the workers. Hoover said, "The wise and judicious course to follow in taxation and economic legislation is not to destroy those already who have secured success but to create conditions under which everyone will have a better chance to be successful" (doc 1). This system was largely unsuccessful because the rich did not spend their money in businesses that helped the average citizens because the weren't required to. Hoover took very little action in fixing the economy because he thought the economy would fix itself over time. Many people blamed him for the Great Depression being as severe as it was. "Hoovervilles" and "Hoover blankets" were common names given to poor, run-down conditions in communities. President Hoover's lack of ability to solve the Great Depression lead to him not being elected for a second term.
When Franklin Roosevelt ran for office in 1932, he heavily criticized his lack of action by saying "The only efforts by the [Hoover] administration to cope with the distress of unemployment were to deny it's existence" (doc 3).