Roosevelt’s New Deal and the Liberal Expansion of the Federal Government Test 25.1

Roosevelts New Deal and the Liberal Expansion of the Federal Government Test 25.1

The main pillars of Americas capitalist economy, the stock market and banking underwent serious troubles beginning in 1929. Collapsing stock market prices and resulting bank failures would greatly slow the movement of goods Unemployment reached 25%- starvation and homelessness grew President Hoover provided limited solutions that focused resources on the private sector The title for 24.1 was Prosperity Shattered What is the title for 25.1?

How did FDRs promise of a New Deal support his landslide election in 1932? What was the over-arching philosophy of the New Deal? What is pump-priming? How did this economic emergency and the New Deal impact the checks and balances between the branches of government? What were the 3 Rs of the New Deal? How did the New Deal carry out the 3 Rs? How did FDR communicate hope to the American people?

Franklin Roosevelt was governor of New York when he accepted the Democratic nomination Had a record of using the state government to support welfare of citizens Promised a more activist government Both Hoover and Roosevelt knew that it would take confidence and optimism to get the nation moving again

Hoover won in a landslide in the prosperous economy of 1928 Hoover lost in a landslide in the struggling economy of 1932

FDR inherited a dismal economy in 1932 In his inaugural address he outlined the cause of this problem to be irrational fear and pessimism We have nothing to fear, but fear itself. Asked for emergency powers to bring the power of government to bear on the Depression treating the task as we would treat the emergency of a war

While it did not get to this point, FDR hinted that he was willing to suspend the Constitution to face this emergency. But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis--broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe. Other elected leaders of Depression-ravaged nations sought and received extraordinary powers that destroyed their democracy- Adolf Hitler FDR would never ask or receive broad executive power

FDRs philosophy was liberal compared to Hoovers conservative rugged individualism Liberals and conservatives have relatively different approaches to governing and a different understanding of the relationship between public and private sector

Liberals tend to Favor public sector solutions to economic problems Favor equality over liberty Are willing to pay higher taxes, particularly for the rich Are more accepting of change Conservatives tend to Favor private sector solutions to problems Favor liberty over equality Oppose higher taxes on any group Are more resistant to change 10

In the eyes of liberals, conservatives Care little for the suffering of the weak and powerless in society. Protect the power and influence of the rich at the expense of the poor Put too much trust in the private sector In the eyes of conservatives, liberals Care little about limiting taxes and government debt Intrude too much on the private affairs of citizens Do not trust the private sector or institutions

Political scientists have modeled political opinions on a spectrum ranging from left (liberal) to right (conservative) The far left is radical. Communists were the radicals of the 1930s The far right were reactionaries. Hitlers Nazi Party was a reactionary party

13 The New Deal- Roosevelts experimental policies in combating the Depression- Alphabet Soup Programs addressed the Three Rs Relief- immediate goal of addressing hunger and homelessness Recovery-long term goal of getting the economy back on track Reform-changes in the government and economy to keep another depression from happening How can this approach be compared to the response to a car accident- An analogy

The underlying principle behind FDRs New Deal liberalism was pump priming How was this supposed to work? How is it similar to the stimulus programs of President Bush and Obama? How is pump priming characterized in the cartoon on text page 741? Pump priming involved deficit spending on the short term to inspire taxable economic activity on the long-run

Congress passed all 15 of FDRs relief, recovery and reform measures in a special Congressional session FDR would enjoy a cooperative Congress and never asked for broad executive powers FDR would later try to control the Supreme Court his plan failed (more later)

Lack of confidence in banking greatly slowed the circulation of money On 6 March, FDR declared a bank holiday- All banks closed without notice Created a great short-term hardship Banks inspected by the government and re-opened June 1933- The Federal Deposit Insurance Corporation would insure deposits up to $5000.00 These measures began to restore confidence in banking

Millions of Americans faced immediate economic needs The Federal Emergency Relief Administration set up public works projects and direct payments to families in need The Civil Works Administration created to focus on public works The Civilian Conservation Corps focused on training and working young men in work camps across the nation

Called Roosevelts Tree Army Planted between 2 and 3 billion trees Built hundreds of state parks Taught literacy and job skills Paid $30.00 a month ($25.00 sent home to family)

Market irresponsibility caused the market to melt down in 1929 Federal government would create an agency to over-see the market The Securities and Exchange Commission End practices that contributed to the crash The SEC continues to monitor the market today

President Roosevelt hoped to organize the private sector to fight the Depression The National Industrial Recovery Act established two agencies The Public Works Administration would hire private sector contractors to complete public works The National Recovery Administration would establish codes of trade to support recovery

The AAA- Agricultural Adjustment Act Paid farmers not to grow crops to raise prices Hurt sharecroppers whose landowners put their land out of production The TVA- Tennessee Valley Authority would create invest in one of the nations poorest regions Flood control and hydroelectric power Combated disease and poverty Private sector utility companies complained that it was unfair competition Still around today

FDR would use the radio to sell economic confidence and the new deal to the American people Used an informal setting- called Fireside Chats- not formal speeches FDR was an effective communicator and a master at the new mass media

How did FDRs promise of a New Deal support his landslide election in 1932? What was the over-arching philosophy of the New Deal? What is pump-priming? How did this economic emergency and the New Deal impact the checks and balances between the branches of government? What were the 3 Rs of the New Deal? How did the New Deal carry out the 3 Rs? How did FDR communicate hope to the American people?

Documents

Roosevelt’s New Deal and the Liberal Expansion of the Federal Government Test 25.1