Legacy Of The New Deal

Thursday, November 8, 2007

Some dates:

Last class: Dec. 17
Final Exam: Friday, Dec. 21 9:30
Reading day: Dec. 12th (NOT the 13th)

On the paper:

  • 12-15 pages.
  • START READING. You should have ALL the books read by now.
  • Class discussion on the books next Thursday.
  • You can give him as many outlines as you want, but only one rough draft.
  • Understand values, strengths and weaknesses in these sources, and in doing so, you can understand the lives of these men. (Room to talk about absence of women?)

Difference between Hoover and FDR approaches to the Depression.

Hoover’s faith in the individual

  • He learned to deal with social problems of economics from his own life and experiences. He believed solutions to these problems have to come from the people.
  • What is the difference between a democracy and a dictatorship? Hoover thought it was government involvement, even in relief. His ideas were very much rooted in his conception of democracy. He believed in only helping voluntary approaches to social and economic hardships. He did not rely on government when the Mississippi River flooded.
  • When he became president and was faced with the crash months into his presidency—banks closed, huge percentage of workforce was sitting at home—he blieved in voluntary efforts to help people. He asked business and labor unions to put their heads together, to prevent strikes and layoffs.
  • Why? Everything in his life said, this is the best way to do it. The great depression is a watermark in history that changed the way Americans looked at government, economic problems, and who was responsible for solving them.

The Bottom Line: Hoover’s methods didn’t work.

  • Reconstruction Finance Program came too late. He was against direct welfare, that government involvement would only make things worse. He believed in natural cycles. But because his approach failed to end the depression, it gave FDR the free license to try something different.

FDR needed to change it up

  • Concerned about balancing the budget, just like Hoover. But FDR thought ideology had to be put aside to experiment.
  • His first 100 days were for experimentation. Supreme Court suggested that much of the experimentation was Unconstitutional.
  • Immediately: bank holiday. Shut down the banks, stopped the run on the banks. Immediately: first of fireside chats, reassuring people. So when holiday ended, people began to put money back into the banks.
  • He didn’t end the depression.
  • Because of opposition, he had to rethink things. The first administration of his was much more radical, because he was trying to control the economy. But later, his Social Security System.
  • By late 30s, New Deal under fire: Courts declaring early act unconstitutional. FDR looked pretty bad when he tried to pack the court before his hearing.
  • 1938-39. FDR put the country back to work by spending money on weapons, building up America’s arsenal. There were signs in Asia and Europe that things were going to go bad. The Japanese had invaded China. Hitler invaded Poland in 39. US came out of the depression because of military spending.

Legacy of the New Deal

  • With us even now (Social Security). Notion that the government can get involve in the economy.
  • Divergence of methods:
    • Hoover: individuals get themselves out of problems.
    • FDR: systems get societies out of problems.
  • After FDR, we accept that government tinkers with the economy, and that the federal government is responsible for providing a safety net for the American people.
  • Now: Government can get involved. That’s why the Federal Reserve can tinker with reserve rates. That’s why Social Security is still with us.

Imperial Presidency

  • Did the New Deal laid the foundation for the imperial presidency?
  • Presidents weak after Lincoln. Teddy Roosevelt and Woodrow Wilson began to restore the prestige of the presidency, but it wasn’t until FDR that the power of the presidency was restored.
  • Government involved in daily lives, with president as the representative of that effect.
    • For many Americans, the federal government became an institution that they directly experienced. At best in the past, government may have tried to regulate railroads, corporations and businesses, but all of a sudden it was touching the lives of individual Americans. The president became the beacon of the government that people looked to.

Distinctly American Welfare State

  • New Deal laid the foundations for how Americans look at public welfare.
    • For the first time, the federal government was responsible for bringing relief to jobless and needy. It resorted to deficit spending to stimulate the economy. It tried to provide immediate relief but ALSO tried to reform economic institutions and did so in a way that we are touched by those actions to this day, ex. Social Security, Federal Deposit Insurance.
  • Link to current: government regulation of mortgage lending, congress preempting any state regulation. Freddie (Frankie Barnes).
  • FDR saved capitalism, perhaps from itself.
  • President as the head of a much more active system, a government welfare system.
  • It shaped modern America. It didn’t end the depression or restore the economy. But by 39, the public believed that FDR was trying, and that government had these responsibilities. One senator said: “never again shall we allow a depression in the united states.”
  • This becomes a bipartisan policy. Not until Reagan that it is alienated by Republicans.

Basic results of New Deal and WWII

  • Imperial presidency means bigger executive branch. 1930s saw a growth of bureaucracy in DC.
  • Dpression and war gave FDR excuse to act residential, raise expectations of govt, increase size of fed govt.
  • 1929, fed govt had 529,000 civilian employees.
  • 1940 (before the war), fed govt had over one million employees—just about doubling.
  • And so many of these people were concentrated in DC, which became the new power center.
  • Federal budget increased as well:
    • 1930: 3.1 billion budget with a 1 billion surplus.
    • 1932 4.8 billion
    • 1934 6.5 bil
    • 1936 7.6 bil
    • 1939 (last year before mobilized for war) 9.4 billion

New Deal left concrete programs, but this legacy as well.
The perception of the national government changed. It occupied the center of the public’s attention. Pragmatism was driving FDR’s changes, not some kind of dramatically manifested ideology. If there ever was going to be socialist revolution, would have been during depression.
Out of this, Americans accepted that government should regulate business and economy.
Welfare approach—not like European socialist systems. It expanded over time, and continued to expand (even Republicans bought into is).

He wasn’t trying to create a welfare state. He believed in a balanced budget. He figured once the depression was over, there would be no need for government assistance. He didn’t want welfare to be a permanent crutch. He figured poverty would eventually go away. Didn’t have a coherent system for a welfare state, didn’t want a welfare state, but in the process he created a distinctly American welfare system.

Democratic coalition: labor, minorities, women.

  • Labor union connection was important: Wagner Act put Democrats in the same boat as the labor party.
  • It looked like Eleanor Roosevelt cared, it looked like the federal government was the best approach to solving problems, blacks put their hopes in the Democratic Party.
  • FDR didn’t do much for blacks—practically nothing. Agricultural act beneiftted landowners most southern blacks worked for. But blacks glommed onto Democratic Party.
  • This coalition that came out of WWII defined the Democratic Party until it became to fall apart in the 50s.
  • Women like the idea of the female cabinet member, of Eleanor Roosevelt.
  • Democratic Party alienated Southerners. Affected relationship of labor with Dems. In 1980, Reagan Democrats: Union workers who shifted from the Democratic Party when it stopped serving their interests.

Truman continued to push the agenda of the New Deal.

Truman’s desire to expand what FDR had started.
Aggressive foreign policy, especially after WWII dealing with the communists.
Democratic party was party of aggressive party. And now, after WWII, continued to be aggressive.

Truman:

  • wanted to protect the small business against monopolies.
  • Healthcare for everyone.
  • Universal access to education.

Most people believed in same things: strong stance against communism, social security. So what distracted Americans from the New Deal and its expansion?

  • Korean War. Federal govt. had to put resources into communist China, Korea.

Eisenhower president in 1952.

  • Republican, and back then, a moderate. War hero.
  • His conservative tells him to get rid of social security. Eisenhower responded, you must be nuts. He knew that any political party that tries to get rid of social security will no longer exist. And he didn’t want to mess with it. But he did want to stop expanding it, and keep it from eating up more governmental revenue.
  • Social security is the third rail: touch it, and you’re dead.
  • But what did he do? He pushed programs that seemed to follow New Deal policy.
    • St. Lawrence Sea Way. In ’54, raised social security benefits and added more workers to be eligible. In ’54, housing act approved federal money for housing displaced by urban renewal. And in ’56, interstate highway act, which authorized 31 billion to build 41 thousand miles of highway.

The irony here: he made so many new deal programs bipartisan. Eisenhower makes it a bipartisan thing.

Read: Truman, Eisenhower, Kennedy, Johnson. How do these admins deal with the New Deal? Lyndon Johnson wants to out-New Deal FDR. But like Truman, he gets consumed by a war that distracts the people. Look at Macnamara’s Fog of War. 2 page reaction.

YOU NEED: to get a modern history book out and read up on the last 70 years of the country.

Now he has gone on a rant that is neither relevant nor vaguely directed to the central thread of my question. I’d like to one day be confident, but if it means that at 50 the only thing I know how to do is assert my own intelligence for the sake of swooning over my own speech, I will have failed.

Name your kid Delano.

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