New Deal Liberalism

The New Deal

- The promise FDR made when he ran for office at the time of the Great Depression- it mainly expressed that the gov. would have a role in the economic affairs of the country- underwent three phases during FDR's presidency- Applied Keynesion Economics (Relief, Recovery, and Reform)- was based on putting money in the hands of the consumer and "priming the pump"- It appealed to people because they were desperate for SO to do sth> every president after him has had some version of the "New Deal" in their economic policies, the country has embraced it> changed the role of gov from the Laissez Faire generation to being more involved

Alphabetocracy(email the dr)

- Work programs that FDR created as part of his New Deal promise during the period of the Great Depression- Letter abbreviations of new deal programs- most of them still exist nowadays

priming the pump

- the concept that the economy must be primed to function properly once again- used by the FDR during his presidency at the time of the Great Deprseeion- to stimulate the economy- putting the money in the hands of the consumer- increase demand --> more manufacturing --> more workers --> economy thrives --> increase demand .... and so on with this cycle> focused much more on increased gov spending rather than encouraging private enterprises of all sorts (the force that would have really allowed the economy to thrive)> rather than maintaining and encouraging the economic system which supports the gov

Social Security Act (1935)

- Law that created a govt. run pension system for retired Americans.- program aimed to provide general welfare for the public, the retired, the disabled, crippled, old-aged americans- make sure that they had enough to survive- This is a fund that every worker in America pays into in order to receive some assistance when they're retired> One of the most successful pieces of legislations at the time of the Great Depression made people that total recovery would be soon at hand> Encouraged more people to work, thus prosperity> Now its sustainability is debatable since many people are retiring from the workforce and the prosperity is dwindling> fears that the program might bankrupt the country

Keynesian Economics

- the various theories about how in the short run, and especially during recessions, economic output is strongly influenced by aggregated demand - The economic philosophy adopted by FDR to address the Great Depression- developed by John Keynes, a British economist- relief, recovery, and reform- 1) stop the bleeding- 2) implement recovery- 3) reform the system to avoid this in the future> FDR depended on them in his new deal> consumers, priming the pump, less encouragement of private enterprises

Causes of the Great Depression

many people believe it the crash of the stock market- stock markets do not crash in healthy economics- the elements of depression were already there- low farm prices and farmers' problems- easy credit- stagnant wages- disruption of trade- high debt

New Deal success or failure

- if by that you mean the promised goal, which is to overcome the great depression, then it failed- failed bec it didn't solve any basic problem- FDR perceived the lower socio-economic classes to have suffered the most during the great depression- New Deal suggested --> new attitude- trial and error (3 phases)- a mere promise- expressed an idea with no actual implementation plan- depended on putting more money in the hands of the consumer than promoting all sorts of private enterprises- After the 1st year, millions were helped but millions were not- Their spirits were lifted but not their circumstances- Labor unrest, Bonus Army clashes with police (army veterans who wanted to receive their promised WWI bonuses)- Strikes and demonstrations- More people were leaving the US (to the soviet union) than coming in

How the "New Deal" changed the role of government

- Laissez faire into being more involved with economic affairs- before the new deal, gov did not have any kind of regulations on businesses or banks (they made their own rules) - Public spending to stimulate economy- gave it much more power - more control over (businesses, banks, and the stock market) - every president afterwards had adopted some version of it in their economic policies- social security act and public welfare

Disagreements among the New DealersOR Different Interpretations

1) It emphasized work and security - Assuming bold leadership in distress relief2) It stood for Human rights and properity rights3) The idea was general and not specific- expressed a new attitude not a fixed program- no preliminary conferences of party leaders to work out details and arrive at agreements- the idea was that all political and practical forces of the community should be directed to making life better for ordinary people

Reasons for disagreements between New Dealers about what it meant

1) unsystematic thinking of FDR2) the evolution of his policies over the years3) the fact that the New Deal went through 3 phases during his presidency- FDR went with it as it came up- There was no precise or definitive plan

Criticism of the New Deal

- Hoover believed it was a closer step towards monarchy- a greed for power, centralize the government- Planned Economy- Dewey believed it was a failure- a mere promise with no necessary measures adopted to actually fulfill such promise- all about putting money in the hands of the consumer and dismissing the idea of producing new goods- Should have promoted and encouraged all types of private enterprises instead- had done more for capitalism than had done for reform- did not solve any basic problem- labor unions were very weak

Laissez Faire Economics

- The concept that there should be no government regulations in economics- Ups and downs occur naturally> sort of "acts of God"> if the gov. interfered, it will mess it up

Effects of the Great Depression

- unemployment (15M ppl) up to 25%- business activities down to 50%- banks failed, people lost their life savings- strikes and demonstrations- labor unions and unrest - the rise of communism- Hitler in Germany and his preparation for war

The Court Packing Scheme

- The series of anti-New Deal decisions by the Supreme Court angered President Roosevelt- prompted him to attempt to reform the federal court system itself- This included a so-called "court-packing" proposal that would have enabled FDR to appoint an additional six justices to the Supreme Court.> FDR lost in this battle, but eventually after the death/retirement of most of the justices of the SC he began his presidency with, he was able to appoint about 8 justices> divided the New Deal coalition> dropped the political advantage Roosevelt had gained in the 1936 elections> those who accused him of dictatorship, tyranny, and fascism used this incident to support their claims

Impact of FDR on presidency

- gov assumed more powerful leadership roles in the nation's economy, corporate-life and welfare- New Deal work programs- Social Security Act- his fireside chats and how he established a bond between himself and the public- By the time he left office, America had become a superpower- labor unions- Every president after him has had some version of the "new deal" in their economic policies- the country has embraced it - there were always comparisons between him and his successors as well as their new deal versions