What Was the New Deal?
Let me explain to you what the New Deal really was. It was a broad collection of government programs and reforms that President Franklin Delano Roosevelt rolled out in the early 1930s to pull the United States out of the Great Depression. I see it as an effort to strengthen the economy, cut down on unemployment, build a social safety net, and show people that the government could actually protect them.
Key Takeaways
- The New Deal consisted of domestic programs by President Franklin D. Roosevelt aimed at ending the Great Depression's economic damage.
- It sought to control unchecked capitalism with policies like minimum wages, work regulations, union support, and retirement security.
- The New Deal elevated the government's importance in managing the economy.
Understanding the New Deal
You need to know that the stock market crash started on October 24, 1929, known as Black Thursday, which ended a period of rapid growth. Companies and banks failed nationwide, and unemployment surged by nearly 200% by 1930.
When President Franklin Roosevelt took office in 1933, he initiated the New Deal with various government-funded programs to reemploy people, plus laws and orders to support farmers and boost business.
The New Deal stirred controversy with its radical reforms and expanded government involvement in the economy. The U.S. Supreme Court declared several programs unconstitutional, including major ones like the National Recovery Administration (NRA), which set wages, hours, and collective bargaining rights, and the Agricultural Adjustment Administration (AAA) for farm price stability.
Public support for the New Deal was strong, so in February 1937, Roosevelt attempted to add more Supreme Court justices to safeguard future programs. He didn't succeed in that court-packing plan, but it worked in a way—by May 1937, the Court upheld the Social Security Act 5-4 after a justice shifted views, and no more New Deal programs were invalidated.
Important Note
Remember, the New Deal came in two phases: the first in 1933 and the second in 1935.
History of the New Deal
We often divide the New Deal into two parts. The first New Deal started in 1933 during Roosevelt's early presidency. Besides the NRA and AAA, it included stabilizing banks via the Emergency Banking Act, securing deposits with the Banking Act of 1933 (Glass-Steagall Act), and building stock market confidence through the Securities Act of 1933.
The second New Deal in 1935 brought what I consider its most lasting impact: government retirement plans through Social Security. It also expanded government jobs with the Works Progress Administration and set minimum wages under the Fair Labor Standards Act.
Was the New Deal a Success?
Historians give the New Deal credit for some success in turning things around. The economy recovered gradually in the 1930s, banking confidence returned with federal deposit insurance, working conditions improved, and unions empowered workers.
But it was World War II that truly got America back to full employment. The massive global spending on military production achieved what the New Deal couldn't do alone, despite its efforts.
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