Final answer:
In the election of 1928, prosperity perception helped Herbert Hoover win, as voters associated the prosperity of the 1920s with Republican policies, despite underlying economic risks. The widespread investment optimism overshadowed concerns about market speculation and contributed to Hoover's victory over Alfred E. Smith.
Step-by-step explanation:
Popular perceptions of prosperity had a significant influence on the election of 1928. The Republican Party, represented by Herbert Hoover, was linked in the public mind with the financial success of the preceding years. This belief was bolstered by Hoover's background as the Secretary of Commerce, where he had cautioned against stock market speculation but was also seen as a proponent of the progress and prosperity during the 1920s. Americans associated this period of apparent affluence, marked by rising stock prices, a favorable balance of trade, and historic economic strength after World War I, with the policies of the Republican Party.
However, lurking beneath the surface were signs of economic imbalance, including declines within major industries and real estate. Despite these warning signs, the widespread investment in the stock market and the belief in continued prosperity helped Hoover win the presidency with a considerable margin against Democratic nominee Alfred E. Smith, who was seen as representing the antithesis of the then-current Republican values. In the wake of the prosperous Jazz Age and with Hoover's Cabinet of business leaders, the election result mirrored the desire for ongoing prosperity and minimal government interference that had dominated the 1920 presidential election. Unfortunately, the optimism of the period would be short-lived, as the Great Depression soon followed.