Political Consequences
The crisis had many political consequences, among which was the abandonment of classic economic liberal approaches, which Roosevelt replaced in the U.S. with Keynesian policies. These policies magnified the role of the federal government in the national economy. Between 1933 and 1939, federal expenditure tripled, and Roosevelt's critics charged that he was turning America into a socialist state. The Great Depression was a main factor in the implementation of social democracy and planned economies in European countries after World War II (see Marshall Plan). Although Austrian economists had challenged Keynesianism since the 1920s, it was not until the 1970s, with the influence of Milton Friedman that the Keynesian approach was politically questioned.
Read more about this topic: Great Depression
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“My business is stanching blood and feeding fainting men; my post the open field between the bullet and the hospital. I sometimes discuss the application of a compress or a wisp of hay under a broken limb, but not the bearing and merits of a political movement. I make gruel—not speeches; I write letters home for wounded soldiers, not political addresses.”
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—Herbert Hoover (1874–1964)