Supply-side/trickle down economics Rugged Individualism 1929-1933 Republican Pro-Business Supply-side/trickle down economics Rugged Individualism Wanted a balanced budget 1933-1945 Governor of NY Democrat Gov’t must help Laissez Faire doesn’t work Pump-priming John Maynard Keynes – deficit spending 1

Topic: FDR and the New Deal Aim: How did FDR’s New Deal bring relief to the Great Depression?

I. Election of 1932

“FDR’s opportunity lay in the magnitude of the economic downturn that led political leader to ignore (temporarily) cherished ideological convictions against government intervention” Anthony Badger (Paul Mellon Professor of American Hitory at Cambridge University)

A. FDR’s First Inaugural Address “The only thing we have to fear, is fear itself.”

WHAT FDR DID IN THE 100 DAYS IN 1933 MARCH 6TH “BANK HOLIDAY” FOR FOUR DAYS MARCH 9TH EMERGENCY BANKING RELIEF ACT INTRODUCED, PASSED, SIGNED IN THE SAME DAY FIRST “FIRESIDE CHAT”, FDR’S INFORMAL METHOD OF COMMUNICATING WITH THE AMERICAN PEOPLE USING RADIO AAA NRA PWA CCC FERA TVA

MANY OF HIS PROGRAMS COMBINED ELEMENTS OF ALL THREE FDR’S NEW DEAL RELIEF REFORM RECOVERY MANY OF HIS PROGRAMS COMBINED ELEMENTS OF ALL THREE

AUDIO IS FDR’S FIRST FIRESIDE CHAT. FDR USED THE RADIO GIVING “FIRESIDE CHATS” TO EXPLAIN HIS PROGRAMS TO THE AMERICAN PEOPLE

FDR CLOSED THE BANKS FOR SEVERAL DAYS, A “BANK HOLIDAY” TO AVOID PANIC FDR CLOSED THE BANKS FOR SEVERAL DAYS, A “BANK HOLIDAY” TO AVOID PANIC. THEY OPENED A FEW DAYS LATER AND THE SITUATION HAD CALMED. A BANK PANIC WAS WHEN PEOPLE CANNOT GET THEIR MONEY BECAUSE THE BANK WAS CLOSED

AAA

AAA: AGRICULTURAL ADJUSTMENT ACT FARM CREDIT ADMINISTRATION LOANED $100 MILLION TO FARMERS IN ITS FIRST SEVEN MONTHS. AAA PAID $100 MILLION TO PLOW UP 10 OF THE 40 MILLION ACRES PLANTED FOR THE 1933 SEASON. THIS BECAME A PRICE SUPPORT TECHNIQUE. WHEAT AND CORN FARMERS WERE PAID NOT TO PLANT HOGS WERE KILLED TO RAISE PORK PRICES FOR FARMERS. THE AAA PAID FARMERS TO KILL 5 MILLION BABY PIGS AND 200,000 SOWS. THE RESULTS OF AAA INTERVENTIONS WERE THAT BY 1936 FARM INCOME WAS UP 50%, SURPLUSES REDUCED AND PRICES ROSE.

40-HOUR WORK WEEK, 40-CENT MINIMUM WAGE NIRA (NATIONAL INDUSTRIAL RECOVERY ACT) ORGANIZED THE NRA: NATIONAL RECOVERY ADMINISTRATION ANTITRUST LAWS WERE SUSPENDED, BUSINESSES WERE ASKED TO VOLUNTARILY FOLLOW CODES TO REGULATE WAGES, HOURS, PRICES 40-HOUR WORK WEEK, 40-CENT MINIMUM WAGE BLUE EAGLE SYMBOL OF VOLUNTARY COMPLIANCE PROTECTED THE RIGHT OF WORKERS TO ORGANIZE AND COLLECTIVE BARGAINING DECLARED UNCONSTITUTIONAL BY THE SUPREME COURT TWO YEARS LATER IN 1935 NRA blues

NIRA

PWA: PUBLIC WORKS ADMINISTRATION SPENT $3.3 BILLION ON PUBLIC WORKS PROJECTS AS "PUMP-PRIMING” TO GET THE ECONOMY MOVING

PWA GAVE CONSTRUCTION JOBS TO THE UNEMPLOYED

PUBLIC WORKS ADMINISTRATION PROJECT, U. S PUBLIC WORKS ADMINISTRATION PROJECT, U.S. ARMY CORPS OF ENGINEERS, BONNEVILLE POWER DAM IN OREGON UNDER CONSTRUCTION COMPLETED

PWA

WPA Built more than 4,000 new school buildings, erected 130 new hospitals, laid roughly 9,000 miles of storm drains and sanitary sewer lines, built 29,000 new bridges, constructed 150 new airfields, paved or repaired 280,000 miles of roads and planted 24 million trees.

WPA: Federal Project Number One Employed artists, musicians, actors and writers.

Jackson Pollack before he was Jackson Pollack

CCC Planted more than 3.5 billion trees on land made barren from fires, natural erosion, intensive agriculture or lumbering. responsible for over half the reforestation, public and private, done in the nation’s history. The CCC enrolled mostly young, unskilled and unemployed men between the ages of 18 and 25. The men came primarily from families on government assistance. Men enlisted for a minimum of six months. Each worker received $30 in payment per month for his services in addition to room and board at a work camp. The men were required to send $22 to 25 of their monthly earnings home to support their families. Some corpsmen received supplemental basic and vocational education while they served. In fact, it’s estimated that some 57,000 illiterate men learned to read and write in CCC camps.

LABOR NLRA or Wagner Act: Right to form unions and collectively bargain Social Security Act: Unemployment insurance and retirement benefits Fair Labor Standards Act: minimum wage

How to pay for the New Deal? Deficit Spending or Keynesian Economics: Government spending increases to stimulate the economy in the long run. Creates a Deficit.

“The Great Depression was a culmination of the social and economic forces if industrialization which had been transforming America since 1865.” “The New Deal was a revolutionary response to a revolutionary situation.” “The significance of the New Deal is its permanence.”

The end How did FDR deal with Great Depression? How Effective was it? Deficit Spending: Keynesian Economics/Pump Priming/Demand Side Economics How Effective was it? How did the role of government change?

IV. Court-Packing F. D. R. Fireside Chat, March 9, 1937. The Courts, however have cast doubts on the ability of the elected Congress to protect us against catastrophe by meeting squarely our modern social and economic conditions..... …The three horses are, of course, the Congress, the Executive, and the Courts. Two of the horses, the Congress and the Executive, are pulling in unison today; the third is not... …the Court has more and more often and more and more boldly asserted a power to veto laws passed by Congress and by State Legislatures.... …The Court has been acting not as judicial body, but as a policy making body.... The Court…has improperly set itself up as a third House of Congress -- a super-legislature, as one of the Justices has called it -- reading into the Constitution words and implications which are not there, and which were never intended to be there. We have therefore reached a point as a Nation where we must take action to save the Constitution from the Court and the Court from itself....

A. Schechter Poultry Corp. v. U.S. Issue: Did the Constitution give the President the power to regulate trade? Opinion: NIRA declared unconstitutional

B. Butler v. U.S. Issue: Opinion:

C. Court Re-organization Plan 1. 2. Reaction: 3. Outcome: