The Great Depression: FDR’s “New Deal” 1933-Today Segment 10 History 17 Michael J. McKinney

The Depression: FDR’s ‘New Deal’ 1) Tax the Rich: Wealth Act 2) Restore Confidence in Banks/Financial Institutions a) FDIC Insurance b) Oversight/Regulation by Treasury Dept. c) Split Investment/Commercial Banking d) Home Owner Loan Corp – Refinancing e) Federal Securities Act: Oversight/disclosure 3) Keynesian approach: Increase Government Spending a) Deficit spend to pump money in economy FDR – One of his “Fireside Chats” “We have Nothing to Fear, but Fear Itself” – Pollyannaish? Out of Touch? 4) Government Regulation /Manipulation on Economy a) National Recovery Administration b) Limit Production + Raise Prices: destroy stockpiles of food to inflate prices c) Minimum Wage d) Farm Subsidies: Agriculture Adjustment Act e) Federal Emergency Relief Admin (FERA) f) National Labor Relations Act – “good faith” 5) Social Security: Retirement

FDR’s ‘New Deal’ - Continued 6) Public Works Projects a) Tennessee Valley Authority – Dams, Electricity b) Civil Works Administration - roads, buildings, housing, recreation facilities, airports c) Education and Vocational Training d) - Listhttp://newdeal.feri.org/library/index.htm#6 Civilian Conservation Corp. in action Work - Tennessee Valley Authority ) Government Programs and Agencies: Big Government a) National Youth Administration b) Resettlement Administration c) Rural Electrification Administration d) Art, Film, Music, Theater, Dance, Writing e) Education and Vocational Training f) Works Progress Administration – Employment g) Disaster Relief WPA –New York Federal Orchestra WPA –University of Georgia, Classroom

The New Deal’s Impact on the Economy: Positive? Negative? Indifferent? 1) Constitutionality? a) Price controls, subsidies, interference in business Civilian Conservation Corp - Investment in future forest or “Busy Work”? 2) Deficit Spending: Raises Interest Rates and Inflation a) Can be good, but you must make right investments b) Bad investments leaves you with debt, no return Walkway needed here? Or “Busy Work”? ‘Hand-made’ Wicker Baskets? Is this efficient? Is there demand? Is this sustainable employment? Is this the right kind of training? More Busy Work? 3) Hard to judge effectiveness a) unemployment drop, but not dramatically b) Economy improved, but was it normal ups/downs? c) Some Good Investments: Some Wasteful d) Some Graft, Corruption and Pork Barrel Projects e) State Control stifled private investment, creativity

The New Deal’s Impact on the Economy: - Continued 4) Builds Confidence a) Trust in Banks, Financial Institutions, Stocks b) Instills National Pride: Good PR, Communication Hoover Dam 5) Money goes toward bureaucracy…not those in need Ohio River Bridge San Diego Zoo 6) Moderate Response a) Total Federal Government only 7% of GNP b) FDR refuses to go “all out” with deficit spending c) Comparatively few government programs d) FDR rejects socialist and “red” agenda 7) Some Good Investments Made: Roads, Tunnels, Bridges, Electricity, Dams, Irrigation: Good return on investment 8) Valuable contributions to health, science, culture Irrigation Channel – Modesto, CA

Discussion Topic 3: FDRs Response 1) What do you like about FDRs New Deal? 2) What do you not like about FDRs New Deal? 5) Why did the Supreme Court reject much of the New Deal? 3) Did the New Deal have a positive effect on the economy…or was it “feel good politics” that resulted in a lot of waste 4) In the end, did FDR just end up spending a lot of money and making a lot of noise…or did the New Deal have a positive impact? 6) Was the New Deal ‘busy work’, or were valuable project completed? Were projects picked for FDRs political cronies? 7) Did New Deal Programs enrich the ‘target’ of the program, or the Bureaucracy designed to support the program?

Class Exercise Compare and contrast the styles of Hoover and Roosevelt 1) Who has the better approach to handling the depression? 1) What would you do to fix Social Security? Dealing with the Modern problem of Social Security