New Deal, Essay Example

The Great Depression was the longest and most severe depression ever experienced by the industrialized world, starting in 1929 and lasting until 1939. The depression was triggered by the stock market crash of October 1929. By the late 1932, the combined value of the stock market had fallen to about 20 percent of their 1929 level. By 1933, 11,000 of the United States’ 25,000 banks had failed due to insolvency. In addition to lost asset values due to stock market failure, loss of confidence, reduced production, and reduced demand also put a downward pressure on the economy. As a consequence, employment levels rapidly declined as well. By 1932, U.S. manufacturing output stood at only 54% of its 1929 level while the unemployment rate stood at a record 25-30 percent (University of Illinois, Urbana-Champaign).

Herbert Hoover was the U.S. President at the time of the Great Depression start but he was a great believer in the ability of the market forces to correct themselves. This may explain why President Hoover refused to authorize large scale relief programs as well as federal dollars to stimulate the nation’s economy (United States History). But President Roosevelt believed that the government should have more active role in the economy than what the Republicans advocated. He used the radio to direct communicate with the American public and argued that government intervention doesn’t limit but instead promote freedom. President Roosevelt’s message resonated with the public which reelected him with over 60 percent of the popular vote in 1936 (Foner, Pg. 172-173).

President Roosevelt’s reelection was not unexpected because people were angry at the government for not taking care of them in difficult times. If President Roosevelt had not understood the sentiments of the American people, some might even have revolted against the government. President Roosevelt also believed that putting people to work is more important than anything else and the government intervention should take place with the intention of putting nation’s idle factors of production into work. Addressing the American public directly through radio, President Roosevelt remarked, “To those who say that our expenditures for Public Works and other means for recovery are a waste that we cannot afford, I answer that no country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order. Some people try to tell me that we must make up our minds that for the future we shall permanently have millions of unemployed just as other countries have had them for over a decade. What may be necessary for those countries is not my responsibility to determine. But as for this country, I stand or fall by my refusal to accept as a necessary condition of our future a permanent army of unemployed.” (Foner, Pg. 173). President Roosevelt also witnessed erosion on his own land in Hyde Park and realized that the situation was not very different elsewhere in his own state (PBS).

Historians have divided President Roosevelt’s domestic policies into three parts for the sake of scholastic research and historical analysis. The First New Deal lasted from 1933 to 1935, the Second New Deal lasted from 1935 to 1938, and the Third New Deal which began in 1937 but didn’t have any significant impact. Thus, the first two New Deals dominate almost the entire historical debate on President Roosevelt’s policies. President Roosevelt believed in American capitalism but he also believed that capitalism requires government intervention to function properly. Roosevelt was a pragmatic who was not afraid to try different solutions and if first approach didn’t work, he would not hesitate to change his methods (Miller Center, University of Virginia).

The First New Deal began immediately upon Roosevelt’s assumption of the presidency. As soon as he was elected president, he started federal intervention in economic affairs. He temporarily closed banks to halt bank panics and passed recover legislation to set up agencies such as Agricultural Adjustment Administration (AAA) to support farm prices and Civilian Conservation Corps (CCC) to employ young men.. Roosevelt understood the importance of a solvent banking system and public confidence that’s why he proposed a review of all banks. He assured the public that their money would be saved in re-opened banks once the banking industry’s inspection has been completed. He also passed the Securities Act which required corporations and stockbrokers to release accurate information to the public as well as the Glass-Steagall Act which created the Federal Deposit Insurance Corporation. In 1934, the Securities and Exchange Act created the Securities and Exchange Commission (SEC) to regulate the financial markets. Roosevelt also helped pass the National Industrial Recovery Act (NIRA) which created Public Works Administration (PWA) and the National Recovery Administration (NRA). PWA intended to revive the national economy by creating jobs and ordering materials from American manufacturers. NRA sought to eliminate unfair competitive practices such as below-cost pricing and child labor. The NIRA also gave the employees the right to collective bargaining, in order ot tackle the growing power of the industrial corporations (Miller Center, University of Virginia).

The Second New Deal began with a shift in President Roosevelt’s policy direction due to growing opposition from both the left and the right as well as from within his own party ranks. The critics of the First New Deal argued that it ignored the very people it was supposed to help such as the poorly, the elderly, and the working class. Roosevelt also felt pressure as Supreme Court struck down some of the most important pieces of New Deal Legislation. Thus, during the Second New Deal, President Roosevelt focused on legislation that attempted to provide a minimum level of social and economic protection to all Americans. The three most important legislations to come out of the Second New Deal were the Works Progress Administration (WPA), the Wagner-Connery National Labor Relations Act (the Wagner Act), and the Social Security Act. WPA was intended to provide jobs to Americans through public projects, the Wagner Act provided protection and greater rights to the labor unions, and thr Social Security System was designed to provide economic security to Americans in retirement phase of their lives (Miller Center, University of Virginia). The Second New Deal was dominated by President Roosevelt’s clashes with the Supreme Court and the Congress and President Roosevelt even feared the demise of Social Security Act. This may be why sought to increase his authority and bureaucratic power, for example, by seeking a greater role in budget planning and for calling to bring every executive agency under the control of one of the cabinet departments.

President Roosevelt took active measures to kept himself knowledgable and informed which may be why he had immense confidence in his visions and strategies. understood the importance of different point of views which is why he often employed cabinet members and advisors with differing ideologies. This helped the president being exposed to different ideas which would help him make more effective decisions. The fact the Roosevelt era is marked by unprecedented government intervention in economic affairs (Miller Center, University of Virginia) shows that Roosevelt didn’t constraint himself with conventional wisdoms. He was willing to challenge the norms to achieve his objectives which explains his numerous clashes with Democratic leaders as well as the Supreme Court.

President Roosevelt deserves a great credit for helping the nation recover from the Great Depression and his New Deal was a solid proof of his wisdom as well as courage to challenge the norms. In order to achieve his objectives, President Roosevelt also sought greater political power but one of the reasons was to protect New Deal policies and bring greater performance efficiency in the government.

References

Foner, Eric. “Franklin D. Roosevelt, “Greater Security for the Average Man” (1934).” Voices of Freedom. W.W. Norton Company, Inc., n.d. 172-173.

Franklin D. Roosevelt Presidential Library and Museum. The Early Years. 29 March 2012 <http://www.fdrlibrary.marist.edu/education/resources/bio_fdr.html>.

Miller Center, University of Virginia. Franklin Delano Roosevelt: Domestic Affairs. 29 March 2012 <http://millercenter.org/president/fdroosevelt/essays/biography/4>.

Franklin Delano Roosevelt: Domestic Affairs. 15 December 2011 <http://millercenter.org/president/fdroosevelt/essays/biography/4>.

PBS. The Civilian Conservation Corps. 29 March 2012 <http://www.pbs.org/wgbh/americanexperience/films/ccc/>.

United States History. Herbert Hoover. 29 March 2012 <http://www.u-s-history.com/pages/h1580.html>.

University of Illinois, Urbana-Champaign. About the Great Depression. 29 March 2012 <http://www.english.illinois.edu/maps/depression/about.htm>.