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Depression and New Deal
Terms in this set (24)
What was the Great Depression and what factors did it bring?
The worst economic crisis in U.S history; brought on by a series of these factors
-Financial Bubble (reckless speculation)
-Constricted money supply(Lack of credit)
-Overproduction (prices unsustainably low)
-Disparity in wealth (under-consumption)
The New Deal
Revolutionized U.S economic policy
-Direct federal regulation of business
-Consumer-based economic recovery strategy (Keynesianism)
-Development of the "welfare" state
Hoover and The Election of 1928
Who: He was former secretary of Commerce during the Coolidge administration
A system of industrial/ corporate cooperative self-regulation, rather than direct federal regulation.
The Stock Market Crash ( Oct. 1929)
The Reconstruction Finance Corporation (RFC), 1932
-Provided emergency "bail out" style loans to prevent corporate bankruptcies.
The Emergency Relief and Construction Act. 1932
-Provided loans to corporations and state govt's to spend on new projects.
Associationalist Liberalism (Hoover)
Production-oriented recovery strategy:
-tax cuts for corporations
-cheap federal credit for corps.
-subsidized low prices for raw materials (stop inflation)
Main economic actors are businesses
New Deal Liberalism (FDR)
-Direct federal regulations of business
Consumption-oriented recovery strategy:
-federal spending on public
-direct payments to individuals
-subsidized high prices for raw
materials (allow inflation)
Main economic actors are individuals.
Economic doctrine stressing the importance of free markets operated through the free choice (rationality) of economic actors.
Roosevelt's "Hundred Days" March to June, 1933
What are the four goals?
1. End the financial crisis
2. Emergency assistance for the homeless and jobless
3. Promote industrial recovery through direct federal intervention and spending
4. Raise agricultural commodity prices
Inflationary Monetary Policy
-Abandonment of the Gold standard
-Moratorium on European War debt
The National Recovery Administration (NRA) 1933-1935
A form of associationalism under direct federal control with federal regulators and arbitrators.
Designed to promote industrial recovery
Likely the most controversial of the New Deal Programs
The works Progress Administration (WPA)
Included Federal Writer's Project and other programs for unemployed artists, musicians, film makers, photographers
The "Second" New Deal
Wide series of legislative reforms shaped by political pressure from the Left, between 1935 and 1938.
The Wagner Act of 1935
1.) Provided workers rights to organize within a union of their choice, and without employer interference.
2.) Established the National Labor Relations board to certify unions and supervise the bargaining process.
The Social Security Act 1935
1) Established a public pension fund for retired people over age 65.
2) Established a federal unemployment insurance program, with additional
federal grants to state public assistance programs.
3) Funded through a combination of payroll and employer taxes.
The Revenue Act of 1935, a.k.a., "The Wealth Tax"
1) Raised tax rates on individual and corporate incomes above $50,000
(about $750,000 in 2009 dollars)
FDR deemed "a traitor to his own class" by the wealthy...
The Court-Packing Plan and Fears of Authoritarianism, 1937
FDR attempted to increase Supreme Court bench from 9 to 15 judges.
Farm Security Administration, 1937
Bought out struggling farmers and helped them relocate with loans
Fair Labor Standards Act, 1938
Established a minimum wage and a maximum 40-hour work week in industries
regulated under Interstate Commerce laws
John Maynard Keynes
Focus on government coordination, rather than regulation.
Idea that most stable form of capitalism is a mixed economy
of both private and government actors, where
government spending can stimulate economic growth.
William Randolph Hearst
"This Wealth Tax is essentially communism!
This bastard proposal should be ascribed to a composite personality
which might be labeled Stalin Delano Roosevelt!"
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