The Great Depression & The New Deal · The Great Depression & The New Deal: Relief,...

The Great Depression &

The New Deal:

Relief, Recovery, & Reform

Economic Depression

• Stock Market Crash – 1929

• High Unemployment (Avg. 25-30%)

• Dust Bowl

• Banking Collapse

• People wandering from city to city to find work

• Dismal situation

• Pres. Hoover = laissez faire economics

Dust Bowl Map

Causes:

• Drought

• Poor

agricultural

practices

• Overproduction

• Flat landscape

Psychological Depression

• Sense of hopelessness

• People didn’t see any way out

• Suicide

• Abandonment of families

• Feeling of failure

What caused it?

• Huge consumer debt

• Buying on Margin

• Overproduction

• No government regulation of the stock market or big business

• All of this leads to economic collapse

Background on FDR • Franklin Delano Roosevelt

is elected POTUS in 1932 (serves from 1933-1945)

• Originally from New York

• Very prideful, confident

• Marries his 4th cousin, Eleanor

• Has an affair with her secretary, Lucy Mercer

• Marriage evolves into business partnership

• Served in the NY State Assembly as a young man until he became ill with polio

FDR Faces Illness

•Left him unable to use his legs; led to a very deep depression; felt that his career was over

•Eleanor keeps his political career alive

Becoming President • Elected as New York’s

Governor in 1928

• Four years later elected as POTUS

• Promises a New Deal for America

• New role for the Federal Gov’t

• Active participation in the economy

• Alphabet programs

• Closest we’ve ever come to ―socialism‖

John Maynard Keynes

• Keynesian Economic

Theory

• Economic slowdown,

increase gov’t

spending (deficits) &

cut taxes

• Rapid economic

growth, raise taxes &

cut spending

The New Deal

2 phases:

• 1st New Deal ~ 1933

• 2nd New Deal ~ 1935

• FDR = completely

opposite philosophy of

Hoover—gov’t will act!!!

(First 100 days)

• Regulation of the banks

• FDIC insured accounts

• Restore faith in the

banking system

Alphabet Programs/Agencies

• CCC = Civilian

Conservation Corps

• TVA = Tennessee

Valley Authority

• WPA = Works

Progress

Administration

• SEC = Securities &

Exchange Comm.

TVA Map

Additional New Deal Programs

• AAA (Agricultural Adjustment Act) = farm subsidies

• Rural Electrification Act

• Wagner Act = joining a union is a right

• Fair Labor Standards Act

Psychology of Recovery

• 21st Amendment = Repeals prohibition

• Gov’t actions = gives people hope

• At least the Prez was doing something to help

• Fireside Chats = directly talk to the people

The New Deal Legacy

• Many programs exist

today (Social

Security)

• Public Projects

(Grand Coulee Dam)

• Most importantly:

changes the role of

gov’t forever (pro-

active)