New Deal America Essay, Research Paper

The stock market crash of 1929 helped launch the United States and many other nations into the worst economic depression in history. The severity of the Great Depression called for federal government programs to protect the general welfare of citizens. The New Deal programs created by Franklin D. Roosevelt provided the framework for the welfare state that still serves as a basis for American public policy. All aspects of American society suffered during the Great Depression. By 1932, there were thirteen million people unemployed. There was no security for the millions who lost all of their savings in the bank failure or stock market crash. Volunteer organizations attempted to help the needy, but their resources were simply not adequate (Madaras and SoRelle 218). Hope seemed non-existent. Americans had never seen such a severe depression. They could not look to history for guidance. The New Deal was Roosevelt?s attempt to restore the economy. His willingness to act decisively and experiment with new policies set him apart from previous presidents. He often said, ?I have no expectation of making a hit every time I come to bat. What I seek is the highest possible batting average?(Tindall and Shi 1238). In the first years of Roosevelt?s term he worked hard to empower the federal branch. The New Deal set the precedent for 20th century liberalism. The first order of business for the Roosevelt administration was financial reform. Banking is a crucial aspect of capitalism and Roosevelt was very aware of this fact. On his second day in office, Roosevelt called Congress to meet in a special session. The outcome was the Emergency Banking Relief Act, which permitted stable banks to reopen and provided managers to those who remained in trouble. The Glass-Steagall Act separated commercial and investment banking and created the Federal Deposit Insurance Corporation. These actions all helped restore banking confidence within American people. Roosevelt ensured that it was safer to ?keep your money in a reopened bank than under the mattress?(Tindall and Shi 1238). After accomplishing this task, the new administration was ready to solve other problems. Other financial programs included the Securities and Exchange Commission (SEC), National Industrial Recovery Act (NIRA), and the Agriculture Adjustment Administration (AAA). The SEC functioned in regulating the stock and bond markets. The NIRA and AAA were aimed at recovery through regulation. The NIRA played a big role in restoring faith and confidence in the system and helped to increase demand and wages, but realistically it was impractical; it abandoned the American market system. The NIRA did work for a short time, perhaps because a new air of confidence had overcome the depression blues and the downward spiral of wages and prices had subsided. But as soon as economic recovery began, the honeymoon ended (Tindall and Shi 1248). The AAA was set up to help farmers with the costs of harvesting their crops. The AAA achieved success in boosting the overall farm economy, but unfortunately, someone had to pay for the success. That someone was the taxpayers and consumers.Relieving the widespread distress was another major priority of the new administration. Roosevelt once remarked, ? The test of our progress is not whether we add to the abundance of those who have much. It is whether we provide enough for those who have too little? (Tindall and Shi 1241). Congress? first step in accomplishing this goal was the creation of the Civilian Conservation Corps (CCC). The CCC was designed to give work to unmarried young men aged eighteen to twenty-five. The Federal Emergency Relief Administration (FERA) gave money to states in the form of grants. The money was then handed out to relief clients in the form of direct cash payments. The types of relief offered during the first New Deal were temporary. There were no entitlements, once the money was gone?. it was gone. The Second New Deal focused on long-term maintenance whereas the original New Deal?s purpose was short-term relief. Roosevelt called the legislation passed during the Second New Deal ?must? legislation (Tindall and Shi 1254). The Wagner Act prohibited employers from interfering with union activities and gave workers the right to bargain through unions of their own choice. The Social Security Act of 1935, was the New Deal?s ?supreme achievement?, according to Roosevelt (1255). Before the Great Depression, progressives proposed aid to elderly, disabled, and unemployed, but America was intent on being a nation of self-reliance. After seeing the destruction of the Great Depression, many opted to try out the new forms of legislation. The inability of capitalism to stabilize the market and the failure of the private sector to restore prosperity enhanced the consideration of stronger executive leadership and centralized planning (Biles 225). The Social Security Act was (is) financed by taxes on the earnings of current workers. By taking money from the workers the government slowed the increase in public consumption needed to restore the health of the economy (1256). In addition to the Social Security Act, a bill was passed providing work to relief to the unemployed. These programs were managed by the Works Progress Administration (WPA). The measures Roosevelt took during the Second New Deal seemed very radical, but actually they were all programs that had been floating around in Congress for many years (1259). Capitalism is effective only if consumers and investors have confidence. The depression destroyed the confidence of both the investors and the consumers. The consumers lost trust in the banks due to the dramatic bank failure rate; the investors did not have the confidence to maintain and keep their businesses productive. The New Deal did not restore the economy to the levels of 1929, but it was an extreme political and psychological accomplishment. Roosevelt played a huge role in helping to restore the economy during the Great Depression. He interacted with the people; he convinced them that things were not as bad as they seemed. Works CitedBiles, Roger. A New Deal for the American People (Northern Illinois University Press, 1991)Madaras, Larry, and James SoRelle. Taking Sides. Connecticut: McGraw-Hill Companies Inc. 2000.Tindall, George, and David Shi. America-A Narrative History. New York: W.W. Norton, 1999