IF WE HELP THE BUSINESSES WE WILL BE HELPING THE PEOPLE BECAUSE THE MONEY WILL “TRICKLE DOWN”



didn't believe gov't should play an active role in the economy



persuaded bankers/business to follow his policy of

›

VOLUNTARY NON COERCIVE COOPERATION Promise to keep wage rates

›

End of 1931 most got pay cuts

PLAN BACKFIRES

   

Democrats in Congress passed a high tariff ( Hawley-Smoot Tariff ) to protect U.S. industry

›

hoped to stimulate purchasing of U.S. goods this turned out to be a fatal error...

Congress did not understand that the world had become a GLOBAL ECONOMY in retaliation other countries passed high tariffs and no foreign markets purchased American goods, so U.S. productivity decreased again



he persuaded Congress to establish the RECONSTRUCTION FINANCE CORPORATION

›

had power to make emergency loans to banks

but it was too little too late…



Hoover wouldn't involve himself in any programs where the government directly provides aid to individuals

›

He didn't want to erode Americans sense of "RUGGED INDIVIDUALISM”



Don’t take away their personal freedoms and self-reliancy



The belief that the individual can do it on their own!

1932 ELECTION



1 out of 4 was unemployed…



nat'l income was 50% of what it had been in 1929



Repubs. nominated Hoover



no hope



winner by a landslide = governor) FRANKLIN DELANO ROOSEVELT (Dem - N.Y.

“

This campaign is more than a contest between two men. It is more than a contest between two parties. It is a contest between two philosophies of government.

”

What is this saying about Hoover & FDR?

-

Their political ideologies?

How was the federal government

’

s role going to change?

FDR: Keynesian or "pump priming" economics

- Based on beliefs of economist John Maynard Keynes

- More involvement from the government - Money should be invested in people, the working class

- Then, spending would increase with new money in circulation, then businesses would expand to meet the new demand and hire new workers -

Hoover: supply side or "trickle down" economics Money was to be invested at top, in business

Then, businesses would expand, hire new workers and in turn, spur on spending and further economic growth

Painting

American Gothic Grant Wood

Literature

Literature

Of Mice and Men

Literature/Cinema

Margaret Mitchell

Only president elected For over 2 terms.

1933-1945

Eleanor Roosevelt A woman is like a tea bag- you never know how strong she is until she gets in hot water.

Great minds discuss ideas; Average minds discuss events; Small minds discuss people.

It is not fair to ask of others what you are unwilling to do yourself.

I could not at any age be content to take my place in a corner by the fireside and simply look on.

No one can make you feel inferior without your consent.

The First

From his inauguration in March through June 1933 FDR pushed Programs through Congress to provide relief, create jobs and stimulate the economy

1. Relief

Immediate action to halt economy ’ s deterioration

2. Recovery

"Pump - Priming" Temporary programs to restart flow of consumer demand

3. Reform

Permanent programs to avoid another depression & insure citizens against economic disasters



Bank Holiday

› Closed all banks for inspection › › Reopened “ safe ” banks (some with loans) Americans’ confidence in banks returned 

Federal Emergency Relief Act (FERA)

› Direct loans to people to prevent foreclosures 

Civilian Conservation Corps (CCC)

› Jobs building roads, plants trees, soil erosion 

Civilian Works Administration (CWA)

› Jobs building bridges, causeways, hospitals



Tennessee Valley Authority (TVA)

› Jobs building factories & dams (elec. to farms) 

Works Progress Administration (WPA)

› Work for artists & build roads, libraries, schl.



National Recovery Act (NRA)

› Priced products, set min. wage, fair business practices, better working cond 

Agricultural Adjustment Act (AAA)

› Paid to reduce certain crops, unseeded acres, plow under crops/kill animals

   

Security & Exchange Commission (SEC)

› Watch stock market – no fraud / insider trading

Federal Deposit Insurance Corporation (FDIC)

› Insured all bank accounts up to $5,000

National Labor Relations Act / Board (NLRA/B)

› Wagner Act – fair business (no monopolies)

Social Security (SS)

› Today ’ s workers pay for today ’ s retirees

Changing the Supreme Court…. WHY???

Since the Supreme Court vetoed many of FDR ’s reforms he changed its makeup. For every justice over age 70 he was able to add one, a total of 6 putting the S.C. in his favor!

PROS

- Unemploy. decreased - Increased income - Preserved resources - Cushion for elderly/sick - Supported unions - Ensured bank safety

CONS

- National debt increased - Doubled fed. Bureaucracy - Didn ’ t increase small business activity

Set a precedent that the federal government is responsible for the economic welfare of the people

“

You have nothing to fear, except fear itself

”

 Evaluate the effectiveness of FDR ’ s NEW DEAL legislation. Look at: impact both short and long term. What should have been done differently? Are there any lessons that Barack Obama should specifically learn from FDR, in your opinion? How has this recession impacted or how will impact you in the long run?