republican policies

• It can be argued that the economic crisis was caused by the Republican policies.
• The first Republican policy that was problematic was ‘laissez-faire’, the 'off-hands approach', which meant that the government interfered as little as possible with the running of businesses meaning that essentially they were left alone and unregulated.
• The Laissez-Faire is important in leading to the economic crisis, because this resulted in many businesses increasingly offering hire purchase to customers, many of whom could not really afford it, therefore making risky investments themselves in the stock market, leaving the economy vulnerability if the market were to crash.
• In addition, another Republican policy was low business taxation, known as 'Capital Gains Tax', which aimed to allow businesses to make large profits with the aim that they kept expanding & thus keeping unemployment low.
• This is important in leading to the economic crisis because although wealth was meant to ‘trickle down’ to the working classes who could then buy the goods they were producing and support the economy this did NOT happen as wages remained low & instead the poor stayed poor & could not afford goods.
• Overall, most Historians, for example Gabriel Kolko in his book 'The Triumph of Conservatism', argue that the Republican policies of

  ‘laissez-faire’, low taxation were the most important factor in explaining the economic crisis because by narrowly focusing on the interests of business groups they failed to meets the financial needs of the nation.
• This in turn eventually led to problems with ‘over-production’ and ‘under consumption’ as people could not afford to buy goods; weaknesses in the ‘banking system’ due to under regulation & eventually the ‘Wall Street Crash’ as the stock market again they were not being watched over; finally they increased the ‘international

  economic problems’ by introducing trading tariffs in order to reduce foreign business competition.