Franklin Roosevelt and the New Deal
Standard SSUSH18: Evaluate Franklin D. Roosevelt s New Deal as a response to the Great Depression and compare how governmental programs aided those in need.
When Roosevelt took office, the nation was on the brink of collapse 3.2 million people were unemployed Six thousand unemployed men were selling apples on the streets of NYC for five cents apiece Riots were breaking out in every major city in the nation Was this the END of the United States of America? America in 1933
The New Deal Franklin Roosevelt s first inaugural address contained the line The only thing we have to fear is fear itself. And he announced a NEW DEAL A program of RELIEF, RECOVERY, and REFORM. It actually only contained TWO IDEAS: 1. Restore Americans CONFIDENCE in the economy 2. Get people back to work. The plan was light on details, but Roosevelt had CHARISMA His personality, and his relation to Teddy Roosevelt Helped to win him the support of the American people.
Franklin Roosevelt's "NEW DEAL" program is BEST described as... A.) a program devised by the government to increase the power of the US military. B.) a proposal drafted by Roosevelt to combine the power of the Senate & the House of Representatives. C.) a short term effort to fix the problems with the nation's money supply. D.) a long term series of programs designed to dig the nation out of depression.
Restoring Confidence The crash had caused a PANIC Leading to BANK RUNS And by 1933, 25,000 banks had disappeared. This problem tends to be SELF PERPETUATING If ONE bank fails, people get nervous and withdraw funds from ANOTHER bank, which causes it to fail, and so on. To HALT this process, Roosevelt did two things: 1. The Emergency Banking Act all banks in the US were closed for four days, during which time inspectors could examine their finances. The system was then announced to be HEALTHY. 2. The creation of the FDIC the Federal Deposit Insurance Act provided government insurance of deposits up to $5,000 ($90,000 in today s money). After the four-day bank holiday, Americans lined up in the street outside of their neighborhood banks To PUT THEIR MONEY BACK IN THEIR BANK ACCOUNTS.
The purpose of the creation of the FDIC was to... A.) ensure the health of the nation's banking system. B.) bring about a quick recovery from the Depression. C.) increase Americans' confidence in keeping their money in banks. D.) replace private banks with government-run banks.
Reducing Unemployment The second problem was unemployment To combat this, Roosevelt undertook to use the power of the government to create jobs. Dozens of works programs were established during the New Deal. Two of the largest were: 1. The CCC (Civilian Conservation Corps) employed millions of young men to clean parks, build roads, maintain beaches, etc. They earned $1/day and received free room and board. 2. The TVA (Tennessee Valley Authority) employed tens of thousands to build dams across the South for (1) flood control and (2) for electricity. These are just a tiny sample of programs the WPA, PWA, NYA, etc., that were created to combat unemployment.
Which New Deal-era program was created to bring electricity to poverty-stricken areas of the American South? A.) the Tennessee Valley Authority B.) the Securities & Exchange Commission C.) the Civilian Conservation Corps D.) the National Electricity Agency
Eleanor Roosevelt Because Roosevelt found it so difficult to travel outside of Washington, D.C His wife, Eleanor, became the public face of his administration She essentially created the role of First Lady And was one of the first women in American history who wielded REAL political power.
The New Deal Fails Roosevelt entered office with a great deal of ENERGY And briefly restored a sense of OPTIMISM to the USA. However, the CENTERPIECE of the New Deal job creation was based on faulty economic thinking. These jobs programs were supposed to get people to begin SPENDING MONEY again However, how were the New Deal s jobs programs PAID FOR? Some of the money was BORROWED But most programs were paid by TAXES Which DOUBLED during the New Deal era. Here is an economics question: If the government raises John s taxes To create a job for Frank Frank will begin SPENDING MORE MONEY. But what will John do? SPEND LESS MONEY. Government spending to create jobs is only a good idea if the jobs provide WORK THAT WE VALUE. Unfortunately, many of the New Deal jobs programs involved digging holes and painting murals And so they led to NO REAL ECONOMIC BENEFIT.
Social Security Uncertain of reelection, Roosevelt directed the passage of the Social Security Act in 1935. It created a type of old age insurance. Here s how it works: Your paycheck is currently taxed at a rate of 7.76%... That money is then given to retirees over the age of 65. When YOU retire The government will take money from people who are working And GIVE IT TO YOU. The downside: Social Security is expected to RUN OUT OF MONEY by 2035. However, it led to FDR being reelected in another LANDSLIDE in 1936.
The Wagner Act Was another New Deal attempt to improve pay and working conditions for the American labor force It FULLY LEGALIZED collective bargaining And prevented employers from stopping unionization This power to organize was seized upon by industrial workers ESPECIALLY in the Detroit automobile industry. Union power led to steady improvements in the lives of workers However, Union demands kept EXPANDING Until recently members of the UAW earned $73/hour And this eventually led to the collapse of the city of Detroit and the relocation of American automobile industry to the Deep South and to overseas factories.
Court-Packing By this point, many of Roosevelt s programs had been STRUCK DOWN by the Supreme Court So Roosevelt GOT MAD And came up with a scheme to ADD six justices to the Supreme Court. Under the Constitution, the President selects Supreme Court Justices. Even Roosevelt s supporters were AGHAST. It looked like a takeover of the JUDICIAL BRANCH By the EXECUTIVE BRANCH A big step towards DICTATORSHIP And Roosevelt was forced to WITHDRAW the proposal.
Which New Deal-era law provides monthly checks to American retirees? A.) the Wagner Act. B.) the Social Security Act. C.) the Recovery Act. D.) the Standards Act.
What was the PRIMARY result of the passage of the Wagner Act? A.) a sharp decline in the power and influence of labor unions. B.) a sharp increase in the power and influence of labor unions. C.) a gradual decrease in pay for the average American worker. D.) a sharp decrease in pay for the average American worker.
Roosevelt's "COURT PACKING" plan was seen by most Americans to be... A.) an honest and reasonable solution for an overworked Supreme Court. B.) an attempted takeover of the judicial branch by the executive branch. C.) an attempted takeover of the executive branch by the judicial branch. D.) a key and necessary component of economic recovery.
Huey Long and American Fascism Some Americans felt that Roosevelt hadn t gone far enough in TAKING CONTROL of the economy. One of them was Louisiana Senator Huey Long Who had planned to run for President on a platform called, share the wealth. It would establish a MAXIMUM WAGE of $1 Million. The government would then tax ALL ADDITIONAL EARNINGS at a rate of 100%... And then REDISTRIBUTE that money Each American family would receive $7,000 ($120,000 in today s dollars). Which class of Americans creates jobs? The upper class. What would wealthy Americans have done under this program? They would have fled the country. Also, if everybody gets $120,000/year in free money, who would do any WORK? This plan would have DESTROYED the American economy Luckily, Long was assassinated in 1935.
The Economic Recovery If the New Deal was ineffective in fixing the economy, what led to the recovery? Many historians will say it was the jobs created by the outbreak of WW2 Millions of Americans joining the Army Factories operating at full capacity Again, economists say NO. A nation has LIMITED RESOURCES And if it uses those resources to kill people and blow stuff up Does that positively affect overall a nation s standard of living? NO. Real economic growth only occurs during times of HOPE and OPTIMISM.. And it wasn t until AFTER WW2 When Americans, proud and confident after taking out the Nazi war machine Began to behave in such as way as to cause an economic recovery. Consequently, most of the nation did not fully recover from the Depression until the mid-1950 s.