America: Back to the Drawing Board

October 29, 1929 – “Black Tuesday”

Crash

• $10 billion disappears in 1 day• Banks fail• Families lose savings• 25% unemployment by 1932

The Bonus Army under attack in DC

Global Phenomenon

• Each deals with crisis in own way• Turbulent 1920s for Germany• Hyperinflation• Adolf Hitler comes to power (1933)• Benito Mussolini (1922)• Conservatives in power in France, UK

America’s Path

• America pursues center-left option• Preserve capitalism• FDR landslide in 1932• Actually campaigns as fiscal conservative

Franklin Delano Roosevelt

• FDR was patrician• 5th cousin of TR• Ran for VP in 1920• Got polio, lost use of legs• Amazingly, people didn’t know• Gained insight into suffering

No Real Plan

“The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something”

The New Deal

• Swift action• “All we have to fear is fear itself”• Wanted to stabilize economy• 1933 was the low point

First 100 Days

• Closed the banks• Provided funds to banks in trouble• Set up Federal Deposit Insurance Corporation

(FDIC)• Took US off gold standard

Major policy: the National Recovery Administration

– Goal was partnership between business and govt– Set regulations for wages, prices across industries

to reduce cutthroat competition and keep businesses afloat

– Recognized right of workers to unionize– Rules were difficult to enforce and many

businesses disregarded

• Other agencies built roads, bridges• Tennessee Valley Authority (TVA) – govt

agency to build dams and provide hydroelectric power to rural Americans

Agricultural Adjustment Act (AAA)

• Shore up crop prices by paying farmers not to grow

• Unintentionally benefited larger landowners and pushed tenants off land

• Promoted mechanization

Federal Housing Administration (FHA)

government-backed loans to make homeownership affordable for working class and middle class Americans

The Pivot: 1935

• Supreme Court struck down NRA and other programs

• Still dominated by conservatives• Workers organize and become more militant• Congress of Industrial Organizations (CIO) • FDR realizes he needs to take stronger action

The “Second New Deal”

Social Security Act of 1935

– old-age pensions– disability– unemployment insurance– Aid to Dependent Children (i.e. welfare)

Wagner Act of 1935

• Right to organize• National Labor Relations Board

Works Progress Administration

• Built bridges, pools, post offices, etc • Hires painters, actors, writers

The “New Deal Coalition”

• Populist FDR wins 1936 on wave of working class support– African Americans in the North– Jewish voters– The urban middle class– Farmers– White Democrats in the South– Unions

• Opposed by small business and big business• Attack on “economic royalists”• Economy revives in 1936

FDR’s Mistakes

• Blunders by cutting government spending, causing recession

• Tries to “pack court” with new Justices – Unpopular policy rejected– But court did move in his direction– Upheld minimum wage, Social Security, right to

organize

Roosevelt’s Record on Race

• Indian New Deal– Actually beneficial– Stopped dividing and selling off Indian land– Ended boarding schools– Improved healthcare– But still in awful shape

Africans American benefited less from New Deal than others

– Southern Democrats influence– Domestic workers and farmworkers left out of Soc

Sec– FDR did not really champion civil rights issues– But many in his admin opposed immigration,

supported anti-lynching laws– Housing policies left in local hands– Racist practices of red-lining kept blacks and

Latinos from getting loans

Jews and other white ethnics increasingly included in American society

The Popular Front

• Communist Party only radical organization able to mobilize at start of Depression

• Adopts ideal of Americanism• Operates through “front” organizations• Broad alliance with Socialists and New Deal

liberals against fascism

• Communists fought for civil rights• Fought against Jim Crow and lynching the

South, tried to organize black and white workers

• Influence on Hollywood, drama, literature of period

• Celebrated “the people,” folk traditions, labor

• Communists less maligned then• But later having ties with CP causes trouble

Bottom Line

• Roosevelt prevents collapse of capitalism• Labor unions organize• Americans reject fascism and communism• But New Deal changes relationship between

people and government