1. Franklin Delano Roosevelt
FDR:
… the only thing we have to fear is
fear itself —nameless, unreasoning,
unjustified terror which paralyzes
needed efforts to convert retreat into
advance.
Workers: Fear of job loss.
Business: Fear of deflation.
Franklin Delano Roosevelt
President, 1933 – 1945

2. Onset of the Depression: Persistent Deflation…Persistent Job Loss
Manufacturing Employment
$/pound
DJIA

3. Onset of the Depression: Bank Runs Deflationary Expectations

4. Secretary of the Treasury, 1921 – 1932
Rembrandt, The Turk
Titian, Venus With
The Mirror
Andrew Mellon
Secretary of the Treasury, 1921 – 1932
“…liquidate labor, liquidate stocks, liquidate the farmer, liquidate real estate.
It will purge the rottenness out of the system…People will work harder,
lead a more moral life.”

5. The Circular Flow: Consequences of Financial System Meltdown

6. Franklin Delano Roosevelt
FDR Inaugural Address
… the only thing we have to fear is fear itself
—nameless, unreasoning, unjustified terror
which paralyzes needed efforts to convert retreat
into advance…This Nation is asking for action,
and action now.
A “New Deal”—A New Regime
1932
Reconstruction Finance Corp, Glass-Steagall (T-bonds back cash)
March/April 1933
Loosened Fetters
Emergency Banking Act/Gold to Treasury
CCC and Reforestation Relief Act
May 1933
AAA/Thomas Amendment (President & gold price/
BoG & reserve requirement), TVA, Federal Securities Act
June 1933
NIRA, Glass-Steagall  FDIC
October-November 1933
Commodity Credit Corp, Civil Works Administration
January 1934
Gold Reserve Act : $ Devaluation: $20.67  $35/oz.
June 1934
SEC, FSLIC
1935
WPA, REA, Wagner Act  NLRB
Schechter Poultry – NRA
Franklin Delano Roosevelt
President, 1933 – 1945

7. $/pound
Producer Price Index

8. New Deal Reflation

11. Fiscal and Monetary Stimulus…And Retrenchment

12. Stimulus and Retrenchment: Recession in Depression

14. The Four Freedoms: Freedom of belief Freedom of speech
Freedom from want
Freedom from fear