1. Economic Theories What is “Supply Side Economics?” – Versus What is “Keynesian Economics?” What does the “failure of aggregate demand” mean? Calvin Coolidge John Maynard Keynes

2. ** Supply-side Economics ** If taxes were lower, businesses and consumers would have more $$$$ and spend & invest more in the economy, causing the economy to grow ** Keynesian Economics – Keynes’s solution: Government should massively increase its own spending in the short-term, even if it meant runing a significant budget deficit ** What does a failure of aggregate demand mean? – In simple terms, “private businesses were not hiring and consumers were not buying products.”

3. ** Reading page 445, “What is the legacy of the New Deal?” Legacy of the New Deal

4. [1] Government Intervention into the nation’s economy - “Laissez-faire” Economics is Dead [2] The Safety Net [3] On-Going Debate about the Role of Government Legacy of the New Deal

5. Hoover Responds to the Great Depression Conventional economic thought … Hoover Dam (1931 – ‘36) benefits … – Water supply – Hydro-electric power – Flood control Emergency Relief Act (1932) … – $$$ to states for public works projects

6. Hoover Responds to the Great Depression By 1932, unemployment is at 24% … Bonus Army (1932) … – 40,000 war veterans want their promised bonus – U.S. Army evicts veterans from Washington D.C.

7. Check on Learning (8) The old faith of self-reliance pervasive during much of U.S. History and at the beginning of the 1930’s can best be understood as ______. – A. Neighbors should band together to help each other – B. Rugged individualism, in that if you’re unsuccessful, it’s your fault – C. Settling in communes, small, self-sufficient communities, is the way to solve all economic problems

8. – The old faith of self-reliance … – National government in 1930 … – (9) Percentage of mortgages in default by 1930 was at ________. Check on Learning

9. – (10) To the country of ________, 100,000 Americans left our country during the 1930’s in search of a better life. Check on Learning

10. Write down the following prompts / questions in notebooks, leaving two lines between preparing for a video clip about 1929 - 1935 “Stormy Weather”: (11) There were four million unemployed in 1930, but in 1933 there were _______ million people unemployed.

11. “Migrant Mother” “Dust Bowl refugees?” – “Oakies” – States of Oklahoma, Texas, Kansas, Colorado, Arkansas, etc. Sharecropper vs. Tenant farmer … – Sharecropper – tended to not own any livestock or farming equipment – Tenant – Possibly used to own the land; often owned some items

12. Station Two “Lunch atop a Skyscraper” Skyscraper construction boom in the 1930’s … – Cost of labor were low, and workers were easy to replace.

13. Living During the Great Depression Effects upon families … – Men – bread lines “Bread-winners for family … – Women – Also worked outside the home Tended to starve themselves … – Children – poor health conditions By 1933, 2,600 schools closed down Rail car accidents … – Many of these travelers were children

14. Family Life in the Great Depression Fertility Rates, (per 100,000 women aged 15-44) - 1928: 93.8 - 1929: 89.3 - 1930: 89.2 - 1931: 84.6 - 1932: 81.7 - 1933: 76.3 - 1934: 78.5 - 1935: 77.2 Average divorce rate, (per 1,000 people) - 1920-1929: 1.6 - 1930-33: 1.4 - 1934-39: 1.8 - 1940-46: 2.8 - 1947-64: 2.5 - 1936: 75.8 - 1937: 77.1 - 1938: 79.1 - 1939: 77.6 - 1940: 79.9 - 1941: 83.4 - 1942: 91.5 - 1943: 94.3 ** The U.S. fertility rates declined by nearly 20% from 1928 to 1935. ** Divorce rates decrease, so especially for women, they stay in many unhappy marriages.

15. Dust Pneumonia – [1] overexposure to dust causing excessive inflammation of the alveoli, – [2] Prairie dust was extremely fine Home Remedies – [1] People would rub Vaseline in their noses to try to keep from inhaling dust – [2] Chest plasters out of a mixture of turpentine, kerosene, skunk oil, and lard

16. Deflationary Spiral

17. Franklin Roosevelt - Franklin Roosevelt enjoyed the presidency as much as anyone … - Franklin Roosevelt’s political philosophy … - Roosevelt’s Optimism … - Fireside Chats …

18. - A handicapped president … - Eleanor Roosevelt, a new kind of “First Lady” FDR & Eleanor Roosevelt

19. - The Temper of the Poor - “Heyday of American Communism” … - 1934 Midterm Elections … - Second New Deal …

20. New Deal Comes Under Attack - Father Coughlin … - Dr. Townsend … - Huey Long …

21. New Deal Goals

22. Banking Reform - Emergency Relief Banking Act - 4-day bank “holiday”- Federal inspection of industry - Securities Act of 1933 - Securities and Exchange Commission - Complete transparency on stock values - SEC to regulate stock market - Glass-Steagall Act (1933) - Federal Deposit Insurance Corporation - Separates commercial & investment banks - FDIC guarantees banking deposits, very important!!!

23. Economic Recovery (Industry-Wide) - Agricultural Adjustment Act (AAA) - Reduce supply of agricultural goods: (1) Livestock, (2) Certain targeted crops, especially dairy, and (3) Conserve land - Tennessee Valley Authority (TVA) - Multiple Goals: Flood control, navigation, employment and electricity - Still exists today!! TVA – “Harnessing Nature”

24. Tennessee Valley Authority

25. Relief Programs - Federal Emergency Relief Administration (FERA) - Continuing a program begun by President Herbert Hoover, called ERA (Emergency Relief Administration) - Federal government used state and local governments - Civil Works Administration (CWA) - “Emergency” program for winter of 1933-34 - Four million immediate jobs, spending $1 billion - Workers directly paid by federal government * Constructed schools, airports, over 500,000 miles of roads

26. - Civilian Conservation Corp (CCC) - Employed men aged 18 to 25 - Later employed war veterans * Building roads and water reservoirs * Developing parks and trails * Planted trees Relief Programs - More than 3 billion trees were planted across the Great Plains to prevent another Dust Bowl - $30 a month, $25 to be sent home

27. - Works Progress Administration (WPA) - Largest public works program of the New Deal!! - Replaced the Federal Emergency Relief Administration (FERA) - Workers directly paid by federal government * Constructed highways, roads, streets * 125,000 public buildings * Over 800 airports and 8,000 parks * Employed actors, writers, musicians, etc. Relief Programs

28. - Wagner Act - Protect rights of workers to unionize - Established National Labor Relations Board to investigate possible unfair labor practices - Social Security Act - (1) Monthly retirement benefit to those 65 and older (today you can receive it at 62, 65, or 68) - (2) Unemployment insurance to the temporary unemployed - (3) Modest welfare payments to the needy, disabled, and poor mothers w/ dependent children - Indian Reorganization Act of 1934 [1] Communal ownership of land [2] Children can attend on-reservations schools, which would be friendlier to Native American culture than boarding schools away from the reservations. [3] Tribal councils could govern themselves, leading to tribal self-rule Reform Programs

29. - African Americans left the Republican Party - Southern whites, farmers, industrial workers, Catholics, various urban groups (Italian Americans and Irish Americans), new immigrants, ethnic minorities including Mexican Americans, unionized workers, women, and “progressives.” New Deal Coalition

30. 1920 – 5.2% 1928 – 4.2% 1930 – 8.7% 1932 – 23.6% 1933 – 25% 1934 – 21.7% 1936 – 17% 1938 – 19% 1940 – 14.6% 1942 – 4.7% 1944 – 1.2% 1946 – 3.9% - In 1934, the national government deficit increased to $2.9 billion. - In 1937-1938, the deficit fell back to $100 million. - During 1939, the deficit rose back to $2.9 billion. - At the height of government spending during WWII, the national deficit was at $54.5 billion in 1943. ** So what ended the Great Depression?