ENDURING THE NEW DEAL PROGRESSIVISM FULFILLED The Great Depression.

ENDURING THE NEW DEAL

PROGRESSIVISM FULFILLED

The Great Depression

Underlying Causes

Boom goes bust Stock market speculation – “on margin “ buyingOverproduction – under- consumption – economy

dependent on consumer spendingExcessive reliance on credit Maldistribution of wealth -0.1 % held as much wealth

as bottom 42% -- limited buying power – MC dependent on salaries

Technological unemployment Economic ties to Europe – tariffs, end of Dawes Plan –

more global economyWeak economic areas – RR, agriculture, construction,

coal – over-invested and developed Limited political and economic leadership in gov’t

and Federal Reserve – Galbraith

NY Stock Market CrashBabson Break SM Crash = trigger or catalyst

Impact “Hard Times” (Turkel) GNP 104.6 billion 1929 ----56.1 b 1933 Unemployment – 20-25% -- not really counting the self

employed -- minorities more like 30-33% “last hired, first fired”

Income decreased by 54%; farm income by 55%; labor by 41%

22% of all banks failedBreadlines, homelessness, migrations – “Army of the

Dispossessed” , HoovervillesMarriages and birth rates decrease – so does divorce –

families often drifted apart Women often had to give up jobs Loss of identity and worth “invisible scars” - Bird Fears of class warfare and revolutionFreedom limited

Hoover’s Response

Schlesinger “crisis of the old order” Voluntarism /associationalism – state and

private charities Mellon advises to let it “bottom out” Commitment to the balanced budget “Rugged Individualism”

Hoover’s Response

• OFTEN TOO LITTLE – TOO LATE

Public Works – Hoover Dam Federal Farm Loan Board Glass – Steagall Act Home Loan Banking Act Moratorium on debt collection from

Europe but Hawley Smoot TariffReconstruction Finance Corporation –

bridge to the New Deal – but focus on RR, businesses, banks

The People

Reno – Farm Holiday Association Bonus Army – Hoover’s Response Election of 1932 – income for most 50% of 1929 Hoover v. FDREmergency Banking Act & First Inaugural Address

Leadership – the analogy of war Brain Trust Fireside Chats“reform to save” – goals: preserve capitalism and

democracy The Hundred Days – 15 key pieces of legislation The Three Rs – Relief, Recovery and Reform

Nevins – Effective Greatness

Characteristics that fit the needs of the time Three Qualities:

Willingness to experiment Timing – met each crisis w/ action Spiritual strength and optimism

Two transformations: Helps American become more socially minded Moves the nation from isolation to leadership

and participation in the world

First New Deal 1933-1935

Focus = RecoveryKey Programs:

Relief – FERA, TVA, PWA, CCC – Hopkins Finance – Emergency Banking Act, FDIC, HOLC,

off gold standard, Sec AAA – key to recovery ---Butler v US Strikes Down

STFU NRA – section 7a – problems – Schechter v US

Strikes Down

Critics

The Right – American Liberty League – businessmen

The Left – those pushing for greater changes Upton Sinclair – EPIC – Progressives Huey Long – “Share Our Wealth” Dr. Townsend – the elderly Father Coughlin – radio priest

demogogues

The Second New Deal 1935-1938

Trickledown v Pump-priming – Keynesian theory

Focus = Relief and ReformKey Programs:

Relief – WPA, Federal One, NYA, RA Finance – Revenue Act of 1935 Reform – response to critics

Social Security National Labor Relations Act – Wagner Act REA 2nd AAA FSA Fair Labor Standards Act – last major ND legislation

End of the New Deal

Court- Packing Scheme - Impact Failed Purge of Conservative Democrats Sit-Down Strike – GM 1937 Roosevelt Recession 1938 Focus shifts to foreign policy – war in Europe

1939New Deal doesn’t end Depression –

ameliorates and preserves – only embracing deficit federal spending as the US becomes the “Arsenal of Democracy” brings productivity, employment and $ flowing through the system

Impact of the New Deal Labor: CIO formed – Lewis UAW 1937 GM

Strike & 1937 Republic Steel Strike – gains in union membership

Women: cabinet positions, E Roosevelt – but limited gains

African Americans: “black cabinet” - limited real gains – SS doesn’t apply to most, hiring discrimination & in federal programs

Native Americans: Collier – Indian Reorganization Act

Hispanic Americans: job discrimination Communism & the Popular Fronts – the

Common Man

Legacy of the New Deal The system – democracy and capitalism is preserved

Leutchenberg – Halfway Revolution; Friedel – conservative revolution - no re-arrangement of wealth or power

The Broker State model emerges – if organized – but limited response to the “voiceless” or unorganized

Political Re-Alignment ---Roosevelt Coalition Increased power to the executive branch and the

federal level of government New perception of the relationship between the

people and the government – the “guarantor” state – a transformation of consciouness” -- Progressivism revived

Tools & processes for stabilizing the economyNew Definition of Freedom – economic security –

work – impact of economic inequalities

Assessment

“Roosevelt was a pragmatist – impatient w/ theory – he kept what worked and discarded the rest. The result was paradoxically, both profoundly revolutionary and profoundly conservative.”

Capitalism’s basic structure and problems were dealt w/ through traditional democratic processes.

Third American Revolution --- Missed opportunity for broader reforms

Leutchenberg –”halfway revolution” – helped some –ignored others