The Great Depression & The New Deal

Welfare State

A government that undertakes responsibility for the welfare of its citizens through programs in public health and public housing and pensions and unemployment compensation etc.

Roosevelt's argument on recovery

Americans needed the confidence that even if things got bad, there would be a limit to how bad they could be. that the federal government had an obligation to provide income assistance and social services to Americans who were experiencing economic and social devastation. In particular, his creation of the welfare state made working people loyal to the New Deal and the Democratic Party, and this began a switch in the base of support for the Democratic Party.

uneven distribution of income

Because there was so much wealth inequality, people were chasing a dream of appearing more wealthy than they were and making bad choices. So that uneven distribution of income led to the Great Depression.

global economic problems

Beginning with American imperialism and this need to tie the economy to foreign markets, the United States had become increasingly involved in international markets. So when there are economic problems in foreign countries, those also had an effect on the United States.

Tennessee Valley Authority

Built a series of hydroelectric dams along the Tennessee River as part of a comprehensive program to economically develop a chronically depressed region; and several agencies helped home and farm owners refinance their mortgages.

Americans opinion on Court Packing

Most Americans were horrified by Roosevelt's suggestion. People believed that the Court should be free from political interference, and they argued that court packing was a direct challenge to the balance of powers, that this was an attempt by Roosevelt to interfere with the Supreme Court

the overproduction of consumer goods

The American economy relied on ever- increasing consumption. So once consumer confidence dropped, there was an overproduction of consumer goods, and that affected American businesses.

Roosevelt in Social Security Act

The President was careful to mitigate some of the criticism from what was, at the time, in the American context, a revolutionary concept. He specifically insisted that social security be financed from payroll, not the federal government; "no dole," Roosevelt said repeatedly," mustn't have a dole." He thereby helped separate social security from the stigma of being an undeserved "welfare" entitlement. While such a strategy saved the program from suspicions, social security became the center piece of the modern American social welfare state.

Roosevelt's idea to help the Great Depression

address the Great Depression and a few hints in his political campaign that suggested his ideas of a "New Deal". reassuring words would have rung hollow if he had not taken swift action against the economic crisis.

Hoover

became a household name during World War 1 when he oversaw voluntary rationing as the head of the U.S. Food Administration and, after the armistice, served as the director-general of the American Relief Association in Europe.only answer with volunteerism. He asked business leaders to promise to maintain investments and employment and encouraged state and local charities to assist those in need. Hoover established the President's Organization for Unemployment Relief

the National Labor Relations Act, also known as the Wagner Act

guaranteed the rights of most workers to unionize and bargain collectively. And so unionized workers, backed by the support of the federal government and determined to enforce the reforms of the New Deal, pushed for higher wages, shorter hours, and better conditions. With growing success, union members came to see Roosevelt as a protector of workers' rights.

How did Roosevelt feel about the Keynesian economic theory>

he never took it to a full extent but he certainly used this theory in considering the role of the federal government during the Great Depression.

Hoover's insensitivity towards Americans

his unwillingness to address widespread economic problems, and his repeated platitudes about returning prosperity condemned his presidency. - Hoover of course was not responsible for the Depression, not personally. But neither he nor his advisors conceived of the enormity of the crisis, a crisis his conservative ideology could neither accommodate nor address. As a result, Americans found little relief from Washington. They were on their own.

Fireside Chats

informal talks given by FDR over the radio; sat by White House fireplace; gained the confidence of the people

Roosevelt in a political standpoint during the New Deal

initially courted conservative southern Democrats to ensure the legislative success of the New Deal, all but guaranteeing that the racial and economic inequalities of the region remained intact, but by the end of his second term, he had won the support of enough non-southern voters that he felt confident confronting some of the region's most glaring inequalities.

Court Packing

proposed to add one new justice to each existing judge who had served for 10 years and was over the age of 70 so the Supreme Court could pass his programs fro the New Deal such as the Social Security Act, the Wagner Act, and the Securities and Exchange Commission.

What did Hoover fail to recover during the Depression?

proved insufficiently flexible to recognize the limits of his ideology. And when the ideology failed, so too did his presidency.

Social Security Act

provided for old-age pensions, unemployment insurance, and economic aid, based on means, to assist both the elderly and dependent children.

What was Hoover's reaction to the major protests?

sealed his legacy.

Relief workers from FERA reported

serious shortages of medical care, adequate shelter, clothing, and food. Rampant illnesses, including typhus, tuberculosis, pneumonia, and venereal disease, as well as childhood malnutrition, further crippled Appalachia

Relief

short-term; for people who were suffering, relief would provide immediate responses.

President's Organization for Unemployment Relief

to help organize the efforts of private agencies.

The heart of Roosevelt's early recovery program consisted of

two massive efforts to stabilize and coordinate the American economy: AAA,NRA,NIRA.

Who was Social Security Act designed for?

when Americans reached a certain age, they would have to live in the fear of dying penniless and insecure. Rather, the American government would ensure that if you were too old to work, you would have a minimum amount of income, so you no longer had to worry about elderly grandmothers wandering the streets and dying in poverty because all of their money had been liquidated.

the weak farm economy

where farmers were already making very low profits and had chronic debt meant that when the economy slowed, farmers lost out.

Reform

would be long-term; this would prevent a Great Depression from happening again in the future

Recovery

would be this sort of medium-term solution to help support both farms and businesses come back to life and resume their normal place in the economy.

the excessive use of credit

§ particularly by consumers to purchase beyond their means eventually backfired. Particularly, once the stock market crashed and people started being more cautious, that meant that they were unable to make payments toward products they had purchased in the past, and that excessive use of credit backfired.

Roosevelts's three interrelated objectives

(1) He wanted to provide relief for the destitute, especially the nearly 25% of Americans who were unemployed (2) he wanted to foster economic recovery of farms and businesses by creating jobs and reducing the need for relief (3) he hoped to reform government and the economy in a way that reduced the risk of such devastating consequences in future economic slumps.

Reform for African Americans

- Despite a concerted effort to appoint Black advisors to some New Deal programs, Franklin Roosevelt did little to directly address the difficulties Black communities faced. To do so openly would provoke southern Democrats and put his New Deal coalition—-the uneasy alliance of national liberals, urban laborers, farm workers, and southern whites—at risk. Roosevelt not only rejected such proposals as abolishing the poll tax and declaring lynching a federal crime, he refused to specifically target African American needs in any of his larger relief and reform packages.

How did Roosevelt and his economic advisors use this theory

- Federal spending on public works and relief went up as did employment and industrial production.

African Americans in the New Deal

- long suffered unequal pay, the new codes simply perpetuated that inequality. The codes also exempted those involved in farm work and domestic labor, the occupations of a majority of southern Black men and women. The AAA was equally problematic as owners displaced Black tenants and sharecroppers, many of whom were forced to return to their farms as low-paid day labor or to migrate to cities looking for wage work. the most notorious failure of the New Deal to aid African Americans came with the passage of the Social Security Act.

The Federal Reserve and Banks during the Great Depression

- overcorrected in their response to speculation by raising interest rates and tightening credit. Across the country, banks denied loans and called in debts. Their patrons, afraid that reactionary policies meant further financial trouble, rushed to withdraw money before institutions could close their doors, ensuring their fate. Such bank runs were not uncommon in the 1920s, but in 1930, with the economy worsening and panic from the crash accelerating, 1,352 banks failed. In 1932, nearly 2,300 banks collapsed, taking personal deposits, savings, and credit with them.

What were the causes of the Great Depression?

- uneven distribution of income - stock market speculation - excessive use of credit - the overproduction of consumer goods - weak farm economy - lack of government policies - global economic problems

The New Deal

A series of reforms enacted by the Franklin Roosevelt administration between 1933 and 1942 with the goal of ending the Great Depression. reshaping much of the nation enforce the reforms of the New Deal, pushed for higher wages, shorter hours, and better conditions.

Roosevelt's argument on welfare state

Americans needed the confidence that even if things got bad, there would be a limit to how bad they could be. He argued that the federal government had an obligation to provide income assistance and social services to Americans who were experiencing economic and social devastation. In particular, his creation of the welfare state made working people loyal to the New Deal and the Democratic Party, and this began a switch in the base of support for the Democratic Party.

Keynesian Economics

Economic theory based on the principles of John Maynard Keynes stating that government spending should increase during business slumps and be curbed during booms.

Civilian Conservation Corps

New Deal program that hired unemployed men to work on natural conservation and reforestation projects in city, state, and national parks, military locations, and in Native American reservations.

Welfare State for Women

New Deal social welfare programs tended to funnel women into means-tested, state-administered relief programs while reserving entitlement benefits for male workers, creating a kind of two-tiered social welfare state.

What did Roosevelt address or talk about in the Fireside Chats?

On March 12, the night before select banks reopened under stricter federal guidelines, Roosevelt appeared on the radio. - The addresses, which the president continued delivering through four terms, were informal, even personal. Roosevelt used his airtime to explain New Deal legislation, to encourage confidence in government action, and to mobilize the American people's support. In the first chat, Roosevelt described the new banking safeguards and asked the public to place their trust and their savings in banks. Americans responded and across the country, deposits outpaced withdrawals. The act was a major success.

Roosevelt's first days in office

Roosevelt and his advisors prepared, submitted, and secured congressional enactment of numerous laws designed to arrest the worst of the Great Depression. His administration threw the federal government headlong into the fight against the Depression.

Relief, Recovery, Reform

Roosevelt promised - that would provide concrete solutions to the problem of the Great Depression. Relief was short-term; for people who were suffering, relief would provide immediate responses. Reform would be long-term; this would prevent a Great Depression from happening again in the future. And recovery would be this sort of medium-term solution to help support both farms and businesses come back to life and resume their normal place in the economy.

What were some of the programs in the New Deal?

The Civil Works Administration (CWA) and, later, the Works Progress Administration (WPA) put unemployed men and women to work on projects designed and proposed by local governments. The Public Works Administration (PWA) provided grants-in-aid to local governments for large infrastructure projects, such as bridges, tunnels, schoolhouses, libraries, and America's first federal public housing projects. Together, they provided not only tangible projects of immense public good but employment for millions.

What did the Civilian Conservation Corps provide?

They were also provided with food, clothing, shelter, tools, and training. Altogether this program housed about 200 unmarried men, ages 18 to 25. They cleared trails, built signs, planted trees and grass, and gave tours. - At the camp, these young men had access to specialized training and extra earning potentials in the evenings. Folks were able to take classes at local universities as well as learn how to read and write and basic arithmetic. These camps were run by the U.S. Army, and men lived like soldiers. The CCC disbanded with U.S. entrance into World War II in 1941, and most of these campers very quickly transitioned into the U.S. military. -

Francis Townsend

a former doctor and public health official from California, promoted a plan for old-age pensions which, he argued, would provide economic security for the elderly (who disproportionately suffered poverty) and encourage recovery by allowing older workers to retire from the workforce.

what did British economic John Maynard Keynes argument about in his good?

a nation's economic activity could stall far below its potential. And in that case, government intervention was necessary to pump money into the economy to restore it to prosperity. This notion of economic theory. argued that large-scale government spending was necessary to sustain purchasing power and stimulate the economy during a recession. Deficit-spending became acceptable under Keynesian economic theory because the government needed to spend money in order to jumpstart the economy, to prime the pump, and create jobs.

the stock market speculation

certainly fueled this cycle, and eventually the stock market crash had a larger impact on the economy.

Women in the New Deal

failed to receive the full benefits of New Deal programs. - New Deal programs aimed to help both but usually by forcing such gendered assumptions, making it difficult for women to attain economic autonomy. New Deal social welfare programs tended to funnel women into means-tested, state-administered relief programs while reserving entitlement benefits for male workers, creating a kind of two-tiered social welfare state. And so, despite great advances, the New Deal failed to challenge core inequalities that continued to mark life in the United States.

Roosevelt's program on economic recovery

focused on economic security, that is, guaranteeing that Americans would be protected against future unemployment and poverty.

Was Social Security Act not eligible?

not everyone was eligible. excluded domestic and agricultural workers and employees of religious and non-profit organizations that included schools and hospitals - And so it seemed that there was a two-tier welfare system that was organized. In the top tier were organized workers in major industries, people who qualified for Social Security. And in the bottom tier were women and children, the unskilled, the uneducated, and the unemployed. Furthermore, it seemed that in the exclusions from the Social Security were African Americans as well as other minorities such as Mexican Americans, Asian Americans, and Native Americans who were more likely to be working in domestic or agricultural sectors or as employees of religious and non-profit organizations.

Roosevelt's New Deal Program on Welfare

on economic recovery. focused on economic security, that is, guaranteeing that Americans would be protected against future unemployment and poverty. emphasized the need to create a welfare state, that is, a safety net that was created and maintained by the federal government to support individuals in times of economic and social devastation beyond their control.

What was the New Deal mainly built around?

on the assumption that men would serve as breadwinners and women as mothers, homemakers, and consumers.

The Second New Deal

oversaw the restoration of a highly progressive federal income tax, mandated new reporting requirements for publicly traded companies, refinanced long-term home mortgages for struggling homeowners, and attempted rural reconstruction projects to bring farm incomes in line with urban ones

What did Roosevelt do to provide relief during the Great Depression?

oversaw the rise of the Depression and drew from progressivism to address the economic crisis. introduced the first comprehensive unemployment relief program and helped pioneer efforts to expand public utilities.Stabilizing the banks was only a first step. built organizations like the CCC, FERA,TVA.

what was the final element of the Great Depression from humans?

panic. The frantic reaction to the market's fall aggravated the economy's other many failings. More economic policies backfired.

lack of government policies

particularly related to new areas of the economy. There were no regulations on the use of credit cards because credit cards were new. There were no regulations on real estate transactions or the stock market because, again, both of those were new. There were no regulation on international business deals because, again, that was a new phenomenon for the United States. So these government policies combined are also going to create an environment that are going to allow the economy depression to happen.

The Great Depression for African Americans

particularly tough for nonwhite Americans. - Black workers were generally the last hired when businesses expanded production and the first fired when businesses experienced downturns. In 1932, with the national unemployment average hovering around 25 percent, Black unemployment reached as high as 50 percent, while even Black workers who kept their jobs saw their already low wages cut dramatically.

What did Social Security Act provide?

provided a modest income for the elderly, funded by tax contributions of workers and their employers. provided a modest income for the disabled and also for dependents of deceased recipients of Social Security.

what did the First Hundred Days do?

stabilized the American economy and ushered in a robust though imperfect recovery. GDP climbed once more, but even as output increased, unemployment remained stubbornly high. Though the unemployment rate dipped from its high in 1933, when Roosevelt was inaugurated, vast numbers remained out of work. If the economy could not put people back to work, the New Deal would try.

workers at textile mills across the southern Piedmont

struck over low wages and long hours, owners turned to local and state authorities to quash workers' groups, even as they recruited thousands of strikebreakers from the many displaced farmers swelling industrial centers looking for work.

What did the Tennessee Valley Authority provide?

tasked with supplying impoverished rural communities with electricity and running water. tasked with improving navigation and providing for flood control in the Tennessee River valley. It was also supposed to provide for reforestation and the proper use of land in the valley. It provided for agricultural and industrial development as well as national defense by creating a corporation that operated government properties around the Tennessee valley. tasked with power production through hydroelectric dams. tasked with flood control and reforestation and erosion control, as I mentioned. They were also tasked with malaria prevention. supplying this rural communities with electricity and running water ensured that these poorer communities in the Tennessee valley had access to modern resources as well as feeling a sense of connection to national trends.

Roosevelt's suggestion during the New Deal

the New Deal could save the South and thereby spur a nationwide recovery. The report was among the first broadsides in Roosevelt's coming reelection campaign that addressed the inequalities that continued to mark southern and national life.

What was the most successful New Deal program

the TVA, an ambitious program to use hydroelectric power, agricultural and industrial reform, flood control, economic development, education, and healthcare to radically remake the impoverished watershed region of the Tennessee River.

an important consequence of court packing

the bill was defeated by the Senate in 1937. but, it did have the intended effect on the Supreme Court. The Chief Justice began to moderate his views, and four of those six elderly court members retired, allowing Roosevelt to appoint four Supreme Court justices in their place.

The Great Depression

the economic crisis beginning with the stock market crash in 1929 and continuing through the 1930s. Rising inequality, declining demand, rural collapse, overextended investors, and the bursting of speculative bubbles all conspired to plunge the nation

Keynesian economic theory challenged

the idea that balanced budgets were necessary.

Roosevelt emphasized on recovery

the need to create a welfare state, that is, a safety net that was created and maintained by the federal government to support individuals in times of economic and social devastation beyond their control.

What did the Social Security fail to do for African Americans?

to aid African Americans. Southern politicians chafed at the prospect of African Americans benefiting from federally sponsored social welfare, afraid that economic security would allow Black southerners to escape the cycle of poverty that kept them tied to the land as cheap, exploitable farm laborers.