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Impact of the Great Depression on Modern AmericaNicole Bloomfield
Keynesian Economics
Keynesian Economics❏ Conceived by a British economist in an attempt to explain the Great
Depression❏ Divergence from popular economic thought-Economy wouldn’t return to state of equilibrium -demand v supply side, classical❏ Output remained low while unemployment remained high❏ ‘One person’s spending would go to another’s earnings’❏ Theory that government should pull market out of crisis
In Modern Economics❏ Birth of macroeconomics ❏ Reflected in the short run how economic output is strongly
influenced by aggregate demand❏ Shift from classical to keynesian economics (somewhat
conservative v liberal)❏ Modern economics mix of these schools of thought❏ Keynes vs haynek
22nd AmendmentRatified in 1951
22nd Amendment“No personal shall be elected to the office of the President more than
twice and no person who has already held office—or acted as the president of the United States—for more than two years of a term shall
be elected President more than once.”
Modern Impact➔ Limits executive branch and abuse of power➔ Most presidents unaffected, but clinton and obama are thought to
have been ➔ Prevents presidents from having impact on elections like Roosevelt
and Grant➔ Some believe people would naturally vote out people
Eleanor Roosevelt
‘First Lady of the World’● Drafted Universal Declaration of Human Rights in 1948
● Women’s suffrage advocate
Progress in Women’s Rights● Significant progress for women in the workplace● If she was a “feminist” or not is debated● Held press conferences only w/ women reporters
Changing the role of First Lady★ Jackie Kennedy - historical restoration★ Claudia “Lady Bird” Johnson- cleaning communities★ Nancy Reagan - “Just Say No”★ Betty Ford- Reduced alcoholism stigma★ Hillary Rodham Clinton - health care system, became secretary of state and
presidential candidate★ Michelle Obama - Children/Health
Changes in Minorities
During the Depression● Wage setting programs allowed unequal pay● New Deals● Many minorities fired first● Hostility/violence increased as whites competed for jobs
normally occupied by minorities● Women left at home● Moved north to escape southern racial violence● Demand for latinos to be deported to Mexico● Anti-immigrant sentiment
Changes● Change in policy towards Native
Americans-promoting tribal individualism, etc (IRA)● Policies to counteract
discrimination, favored by people such as eleanor roosevelt
-led to african american vote shifting democratic for roosevelt, leavin g lincoln’s party after 70+ years
● FDR consulted black governors and created Black Cabinet- this would leader integrate into the american cabinet
● Work progress administration established● Social activism in government● 1960s civil rights
Migration● Europeans fled from totalitarianism ,
including many revolutional scientists, musicians, directors and actors
● Migration to california during dust bowl
Liberalism vs Conservatism
Impact on Government’s role● Shift away from pure free market
capitalism● New expectation for government to save
people in economic crisis● Sympathy for socialism● Mixed economy
Safety Nets● Medicare and medicaid● Labor unions● Modern liberalism
Income Inequality
Economic Disparity❏ Economic boom of the 20s and industrialization by
people such as Henry Ford❏ Gap growing between wealthiest and poorest❏ High income inequality before recessions
Generational● Tendency to save● Less faith in the future● Children grew up quickly
Social Security and Welfare❖ Social Security Act of 1935 one of the most important in
history❖ Federal aid for the most vulnerable❖ Elderly security upon retirement❖ Welfare now possesses negative connotation and has
been through various reforms
Recent Recessions
1980s● 70s oil and energy crisis● Fed caused - raised interest rates to fight
inflation● High levels of income inequality
US GDP growth
Analogies to Recent Recessions● Massive federal spending● Tax rates raised● Spending fails● Causation● Scapegoats
OPCVL
Origin: By Casey Orr, Chicago Tribune and published November 17, 1935Purpose: To criticize the New Deal and the government’s involvement in economic policyValue: Portrays reaction to New Deals at the time that they were in effect and highlights the mistrust of the people towards a strong governmentLimitation: Shows only one side, or opinion regarding New Deal. Does not appeal to people who were in favor
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