Coming out of the Great Depression

What to do now?In your journals or on a sheet of paper, take

the next 5 minutes to write down your response to the question:

How much you think the government should be involved in your life?

What about during the GP?During the time of the Great Depression

(GP), people were desperate for food, jobs, decent shelter.

Two important questions to ask:1.Who should fix economic

problems?2.How should they do it?

What’s the Problem?What were the main problems to fix

during the Great Depression?High UnemploymentInflationBank FailureHomelessness/Hunger Home & Land Foreclosures

Herbert HooverQuaker from OregonServed in WWI.

Food AdministrationRepublican, 31st

President of the U.S.Elected in 1928 on

promise to continue the prosperity of the 20s and end poverty.

"We in America today are nearer to the final triumph over poverty than ever before in the history of any land."

First Option:Volunteerism & Laissez Faire

Laissez-Faire – literally translated “hands free”

He thought that the economy would fix itself with time. Therefore, not much needed to be done.

“the worst affects of the crash...will have passed in 60 days” - Hoover

First Option:Volunteerism & Laissez FaireCharities – Hoover urged people to

donate, participate in, and lean on charities to help those who lost their jobs and homes

“While people must not suffer cold and hunger, it must primarily be a local and voluntary responsibility.”

Second Option:Classical Economist Approach

“Trickle-Down” Economics – states that in order to fix the economy, money and support must be given to business and large institutions (like banks) so that they can provide jobs

Herbert Hoover ProgramsReconstruction Finance Corporation

The agency gave $2 billion in aid to state and local governments and made loans to banks, railroads, farm mortgage associations, and other businesses.

Herbert Hoover Programs“public works” – in an attempt to provide

jobs, money was granted for construction projects like building roads, dams, and working on national parks

Ex. Hoover Dam

More Problems

• Bonus Armyo over 17,000 World War

I veterans, their families, and affiliated groups, marched in D.C.

o They wanted immediate repayment for services as stated in the Adjusted Service Certificate Law

o Hoover called the army to on stop the protest.

America’s Response:Election of 1932Election 1928 (Hoover) Election 1932 (FDR)

Won by over 7 million votes!!

RepublicansDemocrats

America’s ResponseThe economy did

not recover fast enough.

Many people thought that Hoover only cared about big business

The Republicans were blamed for the Great Depression

Franklin Delano Roosevelt a.k.a “F.D.R.”

Born in New York in 1882.

Survived polio, but crippled for life

As Governor of NY, he worked to fix the economy within the state

Democrat, 32nd President of the U.S.

Won on a campaign promise of the “New Deal” to fix the economy

Third Option:Government Intervention

John M. KeynesEconomist who said that when private business

is at fault for an economic downturn, then the government must step in to fix it.

This became known as “Keynesian Economics”

Deficit Spending – when the government spends money it does not already have

The New Deal: 1st 100 DaysFireside chats – radios shows that FDR held

to talk to Americans in order to give them comfort and hope.

The New Deal: 1st 100 DaysSecurities &

Exchange Commission (SEC)A government

agency set up to regulate the stock market and prevent fraud

The New Deal: 1st 100 DaysFederal Deposit

Insurance Corporation (FDIC)Institution that

provided government insurance for bank deposits for up to a certain amount

The New Deal: 1st 100 DaysCivilian Conservati

on Corps (CCC) – similar to the “public works” program. Provided construction jobs to citizens to build schools, roads, dams, etc.

The New Deal: 1st 100 DaysAgricultural Adjustment Act (AAA) –

raised prices for agricultural goods by buying or getting rid of surplus (extra goods)

New Deal Programs

Was the New Deal enough???These provided some

relief, but did not fix the economy.

20% of American were still unemployed

CriticismAmerican Liberty

LeagueGroup of people who

organized opposition to the New Deal.

Their Position:o Deficit spending is

dangerouso Big Government is

taking over

The Second New Deal

The Second New DealSocial Security

ActoCreated an insurance system for the unemployed, disabled, and the elderly

The Second New DealWork Progress Administration

Meant to create new jobs. Congress spent billions of dollars to build roads, buildings, etc.

This program also targeted people with special skill such as artists who painted murals, writers, actors, and musicians.

The Second New DealWagner Act/NRLB

Guaranteed workers the right to organize unions without interference and to bargain collectively