GREAT DEPRESSION AND THE NEW DEAL LIFE IN THE 1930’S

What was the Great Depression?  The worst economic crisis of the century  Over 13 million people unemployed  That’s 35 % unemployed/50% for African- Americans/ Latinos  A crisis in the banking industry  “Dust bowl” as a result of drought and poor farming practices  Farmers lost crops  Many people lost their homes  A social and psychological crisis

Three areas of problems Consumer spending: Credit Banking industry: Reckless practices Farming Sector: Dust Bowl overproduction

Business cycle

Great Depression Business cycle

Business cycle since the Great Depression: healthier

Why is the Great Depression important today? 1)Changed the relationship of Americans to their government permanently We now look to government to solve economic problems We now look to government to solve economic problems

Why is the Great Depression important today? 2)Permanently enlarged the federal government Liberals loved thisLiberals loved this Conservatives hated itConservatives hated it

What caused the Great Depression?  Unequal distribution of wealth  Stock market crash of 1929  Industrial overproduction – farmers and businesses were producing more goods than could be bought and used.  Easy credit  Banks had made unwise loans  Banks lent too much money  People could not pay back their loans

Unequal Distribution of Wealth  No middle class  However, because of the availability of credit, people are “buying” goods

Buying on credit creates a false demand for products  Buying on credit created false demand   What happens to demand when people have reached their credit limit?   Remember that banks have made some unwise loans as well.

Industrial Overproduction = too many products and not enough buyers  WAGES NOT KEEPING UP WITH INFLATION  SUPPLY GREATER THAN DEMAND

Chain reaction Fewer goods are sold. Demand drops. In order to stay in business companies cut wages People lose their confidence & start saving their money Demand drops even further. Companies are forced to cut costs by laying people off Even more people Lose their confidence And spend less money People lose their jobs. The Spiral Of Depression

Stock Market Crash  Many stocks purchased in huge numbers  Drove up the value of company stocks artificially  Stock prices fell  Huge sums of money lost Thursday, October 24, 1929

Black Tuesday

Complete Analyzing Political Cartoons: The Americans PAGE 487

“Migrant Mother”: The Face of the Great Depression

The Results  Bank Failures

The Results: Unemployment

Unemployment

Dustbowl A traveler noticed a nice new hat by the side of the road, and he stopped to pick it up. Under the hat was a man, buried up to his neck in the dust! As he dug the poor fellow out, the traveler asked if he wanted a ride into town. "No, I'll get there myself," the man replied, "I'm on a horse." (Excerpt from THE DUST BOWL by Tricia Andryszewski, p. 33.)

Poor farming practices + drought = Dustbowl

Dust clouds + high winds = terrifying experience

What areas were affected by the Dust Bowl?

OKIES: Refugees from the Dust Bowl. They usually went to California

The Results: HARD TIMES  Loss of homes  “Hoovervilles” Here were all these people living in old rusted-out car bodies.... One family... [was] living in a piano box. This wasn't just a little section, this was maybe 10 feet wide and 10 feet long. People living in whatever they could junk together...."

The Results: Soup kitchens

The results: People on “ relief ”

The results: Social Unrest: Fear of a Socialist Revolution

The Results: Social unrest and labor activity

 Depression

Depression

Depression

Did everyone suffer during the Great Depression?

Two Presidents respond to the Depression: One fails and the other changes the role of government forever! President Hoover President Franklin Roosevelt

Hoover fails to respond effectively to the Depression  “rugged individualism”  Thought government relief would be bad for people’s character  Voluntary associations  Charity  Failed to recognize how big the economic crisis was

FDR and the New Deal increase the size of the federal government and bring it into our lives

Worldwide Depression leads to social and political unrest

And the rise of dictators in Europe and Japan

But many in the US are burying their heads in the sand….. AMERICA FIRST!

America First movement..

1933 – FDR TAKES OVER – AND JUST IN TIME

The New Yorker Magazine’s view of the inauguration!

Election of 1932

FDR: The nation’s only 4 term President. Served through the Great Depression and WW II

Families on Relief

“The only thing we have to fear …..is fear itself” “Our greatest primary task is to put people to work” Franklin Delano Roosevelt

FDR: “This generation of Americans has a rendezvous with destiny”

FDR inspires confidence FDR inspires confidence

A New President and a New Deal  I NEVER FORGET THAT I LIVE IN A HOUSE OWNED BY ALL THE AMERICAN PEOPLE AND I HAVE BEEN GIVEN THEIR TRUST.” FDR

Reversing the Spiral of Depression Government Spending $ Alphabet Agencies More Jobs More Spending Demand for goods increases More goods have to be produced More people with Jobs = more pay $ More Spending Demand for goods increases More goods have to be produced More Jobs More Pay = More Taxes Cycle of Prosperity! Democrats called this Process ‘Pump Priming’

FDR’s New Deal: Relief, recovery, reform  Relief for the needy  Jobs provided  Banking, Business and government reformed

FDR gets to work: The First 100 days  Emergency Banking Act  Bank “holidays”: banks are ordered closed on certain days  Glass – Steagall Act creates FDIC: Federal Deposit Insurance

The Alphabet Agencies

FDR’s New Deal: Government grows and takes over parts of the economy  AAA – Agricultural Adjustment Act  CCC – Civilian Conservation Corps  NRA – National Recovery Act  WPA – Works Project Administration  PWA – Public Works Administration  SSA – Social Security Administration  REA – Rural Electrification Administration  TVA – Tennessee Valley Authority

Fireside Chat: May 7, 1933

AAA: paid farmers not to farm, production, $$$

CCC: employed young men to work in national parks, build roads, hiking trails, etc

WPA – Works Project Administration

The WPA put artists to work

WPA: created millions of jobs for unskilled and skilled workers

Dorothea Lange documents the Depression for the FSA

Her most famous photo: Migrant Mother (and how a photo –and a photographer- can lie)

Dorothea Lange documents Japanese internment 1942

Homework: A New Deal for the Arts  _deal_for_the_arts/index.html _deal_for_the_arts/index.html _deal_for_the_arts/index.html

Problems and Criticisms of the New Deal  Some programs were wasteful  Charges of socialism  At first, the U.S. Supreme Court struck down some of FDR’s New Deal programs  FDR responds to this threat to his New Deal with the court- packing scheme

Court – packing scheme: FDR declares war on the Supreme Court