The Great Depression, 1929

The Great Depression, 1929

The Great Depression

• At the lowest point of the Great Depression (in 1933), the national unemployment rate was:– 4%– 10%– 15%– 25%


• The Great Depression, which really began in 1929, lasted for:– 2 years– 4 years– 12 years– 15 years


• Between 1929 and 1931, what fraction of the nation’s private charity agencies were forced to close due to lack of funds?– 5%– 10%– 20%– 30%


• At the lowest point of the Great Depression (in 1933), the national unemployment rate was:– 4%– 10%– 15%– 25%


• The Great Depression, which really began in 1929, lasted for:– 2 years– 4 years– 12 years– 15 years


• Between 1929 and 1931, what fraction of the nation’s private charity agencies were forced to close due to lack of funds?– 5%– 10%– 20%– 30%


• In 1933, one-quarter of the US labor force was unemployed

• The Depression lasted for 12 years, until the beginning of WWII

• Between 1929 and 1931, 30% of nation’s private charities forced to close

• GNP dropped from $103 billion in 1929 to $55.6 billion in 1933

What was the Great Depression?

• Speculation of 1920s led to sudden and severe stock market crash in Oct 1929

• Banking panic• Also severe drought throughout the 1930s

devastated agricultural areas – known as “The Dust Bowl”

Initial Response to the Great Depression

• President Herbert Hoover slow to respond• Distrust of Federal government• Thought crisis would be short-lived

A Changing View of Poverty and of Government

• Catastrophic scale of the Depression shifted views of many to see that one could be poor as a result of a problem with the system rather than as a result of an individual character flaw

• Only the Federal Government seen as able to respond to crisis of this magnitude, and criticism of Hoover was sharp

Franklin Delano Roosevelt

• In 1932 election campaign, FDR ran on the promise of a “New Deal” for the American people

• Elected in a landslide victory and began to implement a set of programs that came to be known as the “New Deal”

New Deal programs

• Financial reform and regulation• Price controls in agriculture and industry• Federal provision of direct relief• Large scale public works programs

• In 1935, Social Security Act passed to provide permanent social safety net

The New Deal• Financial reform and regulation

– Emergency Banking Bill (1932)– Retreat from gold standard

• Price controls in agriculture and industry– Agricultural Adjustment Act (1933)– Labor laws to further limit child labor, maximum hours to

workweek

• Federal provision of direct relief– Federal Emergency Relief Administration (1933)

• Public Works Programs– Tennessee Valley Authority (1933)– Civilian Conservation Corps (1935)– Works Progress Administration (1935)

Why Federal intervention?

• Scale of crisis overwhelmed local and state authorities as well as private charities

• Despite prevalence since the Poor Laws of seeing poverty as rooted in individual failure – this crisis led to a shift toward understanding systemic causes of poverty

Premises of New Deal policy

• Belief in efficacy of the market system• Importance of balanced budget• Keynesian theory of effective demand (as

opposed to supply-side economics)

Social Security Act, 1935

Social Security Act, 1935

• Old Age Insurance– Funded by designated tax pool– Universal safety net for all workers

• Unemployment Benefits– Funded by employers– Time delimited relief to those who left jobs involuntarily

• Aid to Dependent Children– Based on “Mother’s Pensions” programs in states– Intended to provide relief to families who had lost a

“breadwinner” father– Basis of what we most often call “welfare” – a very small part of

the whole system of social welfare – reformed by FSA

World War II and Postwar Prosperity

• Full employment due to war effort marked real end of depression

• Elimination of New Deal work programs such as CCC and WPA

• G.I. Bill of Rights, 1944

Postwar Prosperity: Attack on public welfare

• Shifting perception of adult recipients as unworthy

• Shift from cash programs to service approach

• Public Welfare Amendments, 1962

1960s: Battles for Rights and War on Poverty

• Economic Opportunity Act, 1964• Community Mental Health Act, 1964• Food Stamp Act, 1964• Social Security Amendments to add

Medicare and Medicaid, 1965

Review of History

• Civil War: First federal intervention in Social Welfare Policy

• Progressive Era (1900-1930): Regulation to protect people from the risks of industrial work

• New Deal (1933-1935): Immediate relief and work programs for large scale systematic problems; continuation of regulation

Review of History

• Social Security Act (1935): Creation of a permanent safety net to protect people from risks of industrial society

• War on Poverty (1960s): Creation of system of services to address individual deficiencies of the poor

Review of History

• Reagan Revolution (1980s): Limiting role of federal government to avoid negative consequences of individual dependency and economic stagnation

1970s-1980s:Economic stagnation and the Reagan Revolution

• Shift to seeing government as the problem rather than the solution

• Reagan fiscal policy based on tax cuts for wealthy and increased private investment (supply side or trickle down economics)

• Overall diminishing role of federal government in social welfare provision

• Retreat from rights based language

1990s: Bill Clinton

• Attempt to create universal health care coverage failed

• Personal Work Opportunity and Responsibility Act (1996)– Work requirements– Time limits– Shift from grant-in-aid to block grant

Barack Obama: Change or More of the Same?

• American Recovery and Reinvestment Act (2009)– Tax cuts– Federal relief, especially unemployment– Infrastructure projects – contract system

rather than public works per se

Barack Obama: Change or More of the Same?

• Affordable Care Act (2010)– Individual mandate – Expanded public options– Employer mandate– Insurance companies required to cover

people with pre-existing conditions and expand to young adults

Today?

1. How do we see the role of the federal government in social welfare provision? Do we see government as the solution or the problem?

2. What are the major social problems of our time?

3. Do we think of poverty as rooted in individual character flaws or in systemic problems?

4. Which groups do we see as deserving of help?

5. How are gender/race/class ideologies connected to our social policy debates?

Documents

The Great Depression, 1929