Why did Herbert Hoover's theory of trickle-down economics fail to work as he had hoped?

Answer 1

In short: because trickle-down economics doesn't work. The better answer is that trickle-down economics doesn't have any measurable beneficial result -- lowering specific taxes like corporate tax rates or capital gains taxes don't magically create jobs -- they merely benefit a handful of people who may spend that money anywhere -- overseas, on foreign good, etc -- or sit on that money, like many of the richest people in the nation do. That doesn't benefit the economy. By contrast, lowering the income taxes of other social classes makes them richer consumers -- people need money to spend money. Also, raising their wages gives them more money to spend (wages=demand).

Answer 2

Banks refused to lend to buisnesses.