FDR and the New Deal

The Depression Collapse of US economy between 1929 and GNP=103.9 B, Exports 7.1 B 1933GNP= 56.0 B, Exports 2.4 B 1932, 25% unemployment Dust Bowl compounded economic collapse and unemployment Hoover’s Rugged Individualism and Welfare Capitalism limited government role in fighting depression Hoovervilles

FDR Takes Office FDR Took office in March 1933 Known as a domestic president; concerned with the lower and middle classes rather than with foreign policy Democratically controlled Congress passed his bills Labeled his philosophy towards change as The New Deal 100 Days: flurry of legislation to combat Depression

3 R’s FDR had no set policy when he started his term: experimentation “Relief, Recovery, Reform” Relief: immediate remedy to the human suffering, in handouts, make-work projects Recovery: longer-lasting remedies to get people back on their feet and return economy to prosperity Reform: government regulation and programs to prevent a similar depression from recuring

FDR’s First Actions By executive order, closed all banks immediately. Emergency Banking Act: supported and re-organized banks Economy Act: slashed 500 million from government spending (later, economists would criticize this policy) Beer Act: ended prohibition by legalizing beer and wine, provided revenue through taxes

100 Days: Alphabet Soup CCC (Civilian Conservation Corps): forestry, parks, wildlife AAA (Agriculture Adjustment Admin): quotas, planning (later declared unconstitutional) FERA (Federal Emergency Relief Act): money to states TVA (Tennessee Valley Authority): development of Tenn. area, anti-flood, hydroelectric HOLC (Homeowner's Loan Corporation) and FCA (Farm Credit Admin): refinance home and farm mortgages PWA (Public Works Admin): public building programs

Later in the 1930s WPA (Works Progress Administration): make-work projects “Wagner Act”: create National Labor Relations Board to help labor and management negotiate; replaced idea of National Recovery Act Securities Exchange Commission to regulate stock market and investigate fraud Social Security Act: pensions –Tax populace today –Pay pensions at retirement –Unintended effect: “Roosevelt Recession” of 1937 because of money removed from economy

Results of New Deal Tremendous popular support for FDR; a president who understood the common man. Public sense that the government was trying to end the depression. Significant, but not dramatic, drop in unemployment; true recovery came due to WW2 Unemployment ,830, % ,340, % ,610, % ,030, %

Results of the New Deal Increase in federal gov’t spending (but total fed, state, local fell) Federal Taxes, Expenses, Balance billion3.1 billion billion4.6 billion billion9.1 billion-2.8 FDR accused of dictatorial and socialist methods Federal government became competitor in economy Several bills declared unconstitutional Accused of trying to stack supreme court FDR used expanded presidential powers to influence society directly New governmental programs became permanent as gov’t increased role in the national economy

Debate over FDR’s New Deal Legacy Proponents praise FDR for his courage and flexibility in combating the Great Depression, his sympathy for the working man, and attempt to safeguard common man against unchecked capitalism. Opponents of FDR claim he operated beyond the limits of the constitution, unfairly erected barriers to free-market capitalism, and created an overly large federal government whose continually rising expenses have seriously threatened the contemporary economic health of the nation.