President Herbert Hoover's domestic policies included tax reform, public works expansion, loans for industries and businesses and a call to leaders of industry and government to assist in economic recovery. He actively opposed Franklin Delano Roosevelt's New Deal, claiming that it would give too much power to the federal government.
After being elected as president in 1928, Hoover announced an unparalleled period of peace and prosperity for the American people. However, less than a year later, the country was plunged into the Great Depression. He took action by encouraging business leaders to retain workers and not reduce wages, requesting local and state governments to back charities to care for the poor, and calling on Congress to invest in public works projects to create jobs for the unemployed. He also tried to establish the Reconstruction Finance Corporation, which would boost banks and businesses by lending them money.
Even with the implementation of these programs, his overall policy was that government intervention should be limited and assistance to the poor should be voluntary. He opposed direct relief to poverty-stricken Americans. He believed in a balanced budget and was unwilling to spend federal funds to institute welfare programs. As a result, the depression worsened, and Hoover received a reputation as being indifferent and even cruel.
Public opinion turned against Hoover, and many people blamed him directly for the continuance of the Great Depression. Shantytowns inhabited by the destitute poor became known as "Hoovervilles." When Hoover ran for re-election in 1932, he was soundly defeated by FDR.