Week 8: Great Depression
Welcome to HST 202 Week Eight! This is the eighth learning module looking at the Great Depression in the United States.
Carnes, Chapter 26: The New Deal: 1933-1941
Schweikart Chapter 16: “Enlarging the Public Sector, 1932–40”
In addition to all his natural advantages—the flashy smile, personal courage, and his family name—Franklin Roosevelt also had good old-fashioned luck. After narrowly escaping an assassination attempt in Miami, Roosevelt took the controls of the U.S. government just as repeal of Prohibition had cleared Congress, leading to the slogan, “Beer by Easter.” If nothing else, the free flow of alcohol seemed to liven the spirits of the nation. (It also filled the federal coffers, providing new sources of revenue that the Roosevelt administration desperately needed.)
When voters went to the polls in November 1932, they handed Roosevelt a landslide victory, giving him the entire West and South. Roosevelt received 22.8 millionvotes to Hoover’s 15.7 million, a remarkably strong showing for the loser considering the circumstances of the Depression. Roosevelt heaped dishonor on the defeated Hoover, denying him even a Secret Service guard out of town. Congress paid a price as well, having done nothing during the lame-duck session because many members knew the new president would purposely torpedo any actions they took.
In fact, Roosevelt hoped to capitalize on the terrifying collapse of the economy, his own absence of preelection promises, and a timid Congress to bulldoze through a set of policies that fundamentally rearranged the business and welfare foundations of American life. Many of FDR’s programs— undertaken under the rubric of a “New Deal” for Americans—came as spur-of-the-moment reactions to the latest crisis. The absence of internal consistency has thus produced confusion over whether there was a single New Deal or two distinct programs that were dramatically different…
…Just as a fable developed about business failures causing the stock market collapse and the subsequent recession, a similar tale arose about Roosevelt’s New Deal program to rescue America. Although most scholars have maintained that there were two New Deals, not one, they differ on the direction and extent of the changes between the first and second. According to one tradition, Roosevelt came into office with a dramatically different plan from Hoover’s “do-nothingism,” and the president set out to restore health to the American economy by “saving capitalism.” However, although the first phase of FDR’s master plan—roughly between 1933 and 1935—consisted of adopting a widespread series of measures at the national level that emphasized relief, around 1936 he shifted the legislation toward reform…
That there is confusion about how many New Deals there were reflected the utter lack of a blueprint or consistency to Roosevelt’s programs. Rather, a single theme underlay all of them, namely that government could and should do things that citizens previously had done themselves. In fact, FDR’s policies were haphazard, fluctuating with whichever advisers happened to be on the ascent at the time.
Then Nazi Germany invaded Poland, and many New Dealers realized that in a coming war—if it came—they needed capitalists. World War II in a sense saved the nation from the New Deal by unleashing the power of the private sector to make implements of war—rather than the New Deal saved capitalism. The two–New Deals interpretation has allowed scholars to deal simultaneously with the relative ineffectiveness of FDR’s policies to extricate the nation from the Depression and to explain the contradictions of FDR’s first half-dozen years in office.1 For example, he often claimed that he was committed to a balanced budget, yet he ran what were—and remain to the present, in real terms—all-time record deficits. Those deficits came in spite of the Revenue Act of 1935 that raised the tax rates on the upper classes from the already high level of 59 percent to 75 percent. More than anything, the two New Deals view paralleled the ascendance and decline of different groups within the administration, revealing policy influences on Roosevelt from among a staff who spanned the ideological spectrum…
It did not help that FDR had few business leaders among his advisers. He distrusted them. Roosevelt told (Raymond) Moley that he “had talked to a great many business men, in fact to more…than any other President, and that they are generally stupid.” Roosevelt cared nothing about the effects of the class warfare that he had started. When Moley questioned how the welfare of the country could be served by “totally discrediting business to the people,” he concluded that Roosevelt “was thinking merely in terms of the political advantage to him in creating the impression through the country that he was being unjustly attacked by business men.” FDR specifically looked for “high spots” in his speeches to get in “a dig at his enemies.” More than by the president’s vindictiveness, Moley was “impressed as never before by the utter lack of logic of the man, the scantiness of his precise knowledge of things that he was talking about [and] by the immense and growing egotism that came from his office.”
It is true that “the New Dealers shared John Dewey’s conviction that organized social intelligence could shape society, and some, like [Adoph] Berle, reflected the hope of the Social Gospel of creating a Kingdom of God on earth.” Roosevelt, however, had enough vision to know that the public would not share in his enthusiasm for many large-scale programs. Tugwell observed that the president engaged in “secret amputation” when it came to introducing programs that might generate opposition: “If you have to do some social reorganizing,” Tugwell noted, “you do it as quietly as possible. You play down its implications.”10 Mixing Hooverism with spot emergency measures, applied to selective sectors of the economy, then combining them with stealth social engineering, the New Deal took on a variegated appearance, and perhaps the only thread that ran through it emanated from the Keynesian policy recommendations.
By the time the New Deal got underway, Keynes had already established a spectacular scholarly reputation as well as a talent for turning quick profits in the British stock market. His General Theory did not appear until 1936, but Keynes had published the essentials in scholarly studies and white papers that found their way to the United States through academia. They had thoroughly penetrated American economic thinking even while Hoover was in the Oval Office.
Few seemed troubled by the fact that Britain had pursued Keynesian policies with little success for some time prior to Roosevelt’s election. Moreover, people pointed to Roosevelt’s comments about the need to balance the budget, and his choice of Douglas (a budget balancer par excellence) as budget director, as evidence that Roosevelt never endorsed Keynesian economics. But the deficits told a different story, and between 1932 and 1939, the federal debt—the accumulated deficits—had leaped from $3 billion to $9 billion, and the national debt had soared to real levels unmatched to this day. Insiders with Roosevelt’s ear, such as Tugwell, saw the only hope for escaping the Depression as lying with increasing purchasing power on the part of ordinary Americans, not with stimulating business investment.
Thus, the New Deal contained little in the way of a guiding philosophy, except that government should “do something.” Equally as important as the lack of direction, virtually all of the New Dealers shared, to one degree or another, a distrust of business and entrepreneurship that they thought had landed the nation in its current distressed condition. Above all, emergency measures needed to be done quickly before opposition could mount to many of these breathtaking challenges to the Constitution…
Forum Discussion #8
The Shadow is the name of a collection of serialized dramas, originally in 1930s pulp novels, and then in a wide variety of media. Its title character has been featured on the radio, in a long-running pulp magazine series, in American comic books, comic strips, television, serials, video games, and at least five feature films. The radio drama included episodes voiced by Orson Welles.
Listen to this episode of the Shadow (Originally aired 12.12.37-four years after the Depression) and answer the following:
How important is escapism to people during the Great Depression? Why do people enjoy the vigilante troupe in story telling? Cite examples from the episode.
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