I A. Mandate from the people 1. overwhelming victory for Democrats in 1934 Congressional elections B. Reduction in direct relief (i.e. FERA) 2. “Must preserve the self-respect of Americans” C. Increasing taxes for corporations and the rich

II. Alphabet Soup Continues… A. Works Progress Administration (WPA) ~ built or improved highways 2. promoted soil & water conservation 3. provided programs in the arts

B. Social Security Act 1. pension plan for elderly 2. unemployment insurance for: a. workers who lost jobs b. victims of work related accidents *did not apply to domestic workers or farmers * (i.e. MANY blacks) Chart ~ pg 407

C. Rural Electrification Administration (REA) 1. brought electricity to many farms 2. by 1950, more than 80% of farms had electricity Graph ~ pg 405

D. Wagner Act (National Labor Relations Act) 1. recognized rights of workers to join unions 2. gave workers right to collective bargaining 3. created National Labor Relations Board (NLRB) Graph ~ pg 408

E. Fair Labor Standards Act ~ minimum wage & maximum work week 2. outlawed child labor More ‘Alphabet Soup’ ~ pg 409

III. Economics of the New Deal A. FDR fairly conservative at first ( ) AND spending B. Greatly expanded government programs (AND spending) from 1934 on C. “Keynsian Economics” ~ John Maynard Keynes 1. Government MUST be involved in the economy 2. deficit spending is necessary a. “Priming the Pump” theory b. when prosperity returns, the government should use taxes to pay off deficit

Work Relief & Direct Relief Businesses profit = Business expansion! Demand for goods Consumer Spending Federal $ (i.e. go into debt) Priming the Pump

Wages = $$$ More Jobs Businesses Unemployed $ from the government Trickle Down Theory

Which do you think is better in terms of boosting a nation’s economy: Priming the Pump or Trickle Down? Why?

IV. – “New Deal Honeymoon is Over” A. Criticism mounting 1. FDR taking too much power ~ dictator?

2. rising deficit a = $461 million b = $4.4 billion 3. businesses and wealthy felt they were being abused – paying for programs through increased taxes B. FDR won election of 1936 despite all of this 1. Economy WAS improving (slowly!)

V. Court Packing Scandal A. By 1936, many New Deal programs found unconsti- tutional by the Supreme Court 1. NRA 2. AAA

B. FDR saw the Supreme Court as his biggest challenge to his New Deal goals 1. proposed adding a new justice each time a current justice turned at the time, there were 6 justices over age 70

C. Critics claimed he wanted to “pack” the court with New Deal supporters 1. FDR found it harder to pass laws through Congress after this Political Cartoon ~ pg 410

VI. Was the New Deal a success? A. By 1936, economy WAS improving, but… 1. upon reelection, FDR cut deficit spending 2. Federal Reserve Board raised interest rates ** put economy into a tailspin**

B. By 1938, nearly all gains in employment and production were wiped out 1. FDR lost power base in 1938 congressional elections C. In 1939, the world’s focus turned to Hitler & the Nazis…