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Histoty of The New Deal

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    In the 1930s the USA was in a dyer situation the country was stuck in a deep depression. The US economy’s prior prestige had been scuttled with the Wall Street crash of 1929. This capitalist economy held the rich in an advantageous position and the poor in a terrible position when this economy collapsed the poor did not bear the hardship it was the rich. Unemployment and various other effects of depression hit the US hard as a result. The main cause of this depression can be attributed to the Wall Street crash, tariffs on foreign goods, a massive poverty gap, overproduction and speculation and other factors. By 1932 when the abrupt recession of the US economy had levelled off Unemployment stood at over 25 million. The objectives of Roosevelt’s new deal were alleviating the hardships caused by the great depression, bring unemployment down and to rehabilitate the US economy.

    Roosevelt also wanted to give women and black people more rights, positive discrimination was even introduced to do so. The new deal changed the model of southern society to some extent, now black farmers were sharecroppers. To mitigate the hardships that caused widespread unemployment and turned “rugged individualism” into “ragged individualism” he introduced alphabet agencies. These alphabet agencies provided jobs to the unemployed and aided the building of roads, power stations, infrastructure, the building of hospitals and schools. The alphabet agencies (so called because of their three letter abbreviations) were a benefit to the US the TVA for example built hydroelectric plants they bought electricity to Tennessee. The PWA built 70% of schools, 35% of hospitals and many warships including 2 aircraft carriers; this targeted skilled unemployment. In 1933, over 5 million were employed by these agencies this bought money to the people. Some jobs were even provided to women and blacks, which were disadvantaged. The idea of these alphabet agencies was to alleviate poverty, reduce unemployment and improve the economy. In 1933 unemployment stood at 20.6 million though four years later unemployment falls to 9.1 million. These unemployment figures show there was a drastic fall in unemployment during the first four years of the new deal (note these figures include those employed by the WPA).

    The depression had an impact on US politics now the democrats turned more left with regard to policy. More powers were given to the president, in Roosevelt’s inaugurals speech he said he was at war with depression and so he acquired war president powers. On March 9th 1933 he declared a national state of emergency which given him even more power, this state of emergency still exists today. This led to the government being wrongly labelled communist, totalitarians due to the government’s interventionist policies and a dictatorship. One of the pioneers of the pump priming idea Harry Hopkins said “hell they’ve got to eat just like other people” after being accused of boondoggling. This turn to the left manifested in the passing of the social security act in august 1935, which like the pump priming idea given more money to the people and actively financially supported the poor. To regenerate the US economy the government spent money on these alphabet agencies in the hope more jobs would lead to more spending therefore an increase in demand for goods this will rejuvenate the secondary industry and more jobs will be available here. The democrats called this “pump priming”. The social security act also provided people with more money. The US wanted to provide the people with more money to spend, which would lead to a multiplier effect providing jobs in industry, banking and stabilising the nation. The new deal taken steps to help the US economy for example there were three times less business failures in 1934 than in 1932. After over 4000 banks failed in 1933, almost no banks failed in 1934.

    Production In the USA in 1937 was twice what it had been in 1932. On the other hand the new deal was a misadventure, which rather than aid recovery wasted a lot of taxpayers money, farfetched as it sounds tax payers money was squandered paying the unemployed to scare birds and par take in drama. These alphabet agencies did not provide proper jobs instead they provided mainly menial jobs especially the WPA, which held the bulk of workers working for alphabet agencies. Alphabet agencies like the TVA and PWA was fruitful to the US and worth spending the money however most of the money was going to the WPA which employed the most out of all alphabet agencies and was a total and utter waste. The money pumped in was for no avail as most saved the money. It was World War 2 that bought women and blacks more rights as more jobs needed to be replaced, with men going to war. Women proven their use doing less menial jobs, women were encouraged to do these jobs by posters for example “Rosie the riveter”. Black men were taken into the army and replaced jobs left by service men. Roosevelt was totally unable to gain enough support to make any laws to protect black peoples employment rights. Nor was he able to end the Jim Crow laws, which segregated blacks and disallowed them from voting in the south; a basic civil right, which every citizen of any democratic state should have. His encouragement of positive descrimination was not adhered to either. Black farmers were now becoming sharecroppers because the white supremacists of the south saw them as a smaller threat because from 1915 onward bullied blacks migrated north. This is shown by the apparent reduction of lynching of blacks from 1915 onwards.

    The idea of these alphabet agencies was to alleviate poverty, reduce unemployment and improve the economy yet this was not caused by the alphabet agencies in 1933, 24.9 million were unemployed by 1938 it had fallen to 19 million this is merely the natural recovery of a nation after a recession not the affect of alphabet agencies. In 1939 unemployment stood at 17.2 million this then fell to 1.9 million in 1945 (these figures exclude those working for the WPA as these cant be taken seriously). This shows that World War 2 is what finally consumed the unemployment problem; this manifests itself that a year after the USA declares war all the alphabet agencies are closed because the unemployment problem has ceased. Had the unemployment problem ensued the alphabet agencies would of continued. The US industry and employment was already reincarnated with the advent of the lend lease act signed in March 1941. Had the US not joined World War 2 its unemployment worries would be finished by weapons production for warring Europe. The new deal did alleviate poverty to some extent with the social security act playing a part but nothing in comparison to the poverty World War 2 alleviated. During World War 2 and beyond the GDP of the US rose sharply. The authenticity and validity of unemployment figures including WPA workers are questionable and highly unreliable since some may have even been employed to scare birds.

    The depression did have an impact on US politics turning it more left, the US government did resort to more socialist policies but that gives no excuse to brand the government as communist. Roosevelt did abuse his 9th March emergency powers using it to bypass congress to pass laws; this directly contradicts his party’s name. Those saying he is dictatorial bear some weight as Hitler used a state of emergency under article 48 of the German constitution to make Germany a one party state. The social security act was successful bringing money effectively to the people. There were three times less business failures in 1934 than in 1933 because after every recession, be it the 1937 recession or the credit crunch today there is always a recovery afterwards. In 1934 the banks were solvent and only established banks remained that had survived the depression and these banks were not going to fall. After 1932 the US was in recovery so businesses were less likely to fail. Those that argue 4000 banks failed in 1933 and almost none in 1934 should know there is a natural recovery after an economic slump. In addition these remaining banks are established. The fact that an economy naturally recovers after a recession thwarts all the data showing the new deal took steps and improved the economy.

    The production in 1937 (though it was a recession year) was twice that of 1932 was because the USA was recovering and the 1937 recession was small. In conclusion the new deal clearly brought some changes for the better in the USA. The objectives of the new deal were to alleviate the hardships caused by the great depression, bring unemployment down and to rehabilitate the US economy. Roosevelt also wanted to give women and black people more rights. All of these objectives were not achieved by Roosevelt; on the contrary they were achieved by World War 2 and this for a man who hated war. The apparent deficiencies of the new deal were glaring Roosevelt in the face this was embodied in the 19 million unemployed in 1938, and that was 5 years after the new deal begun. The new deal was an act of desperation to end bitter years of depression that is unmistakably visible when one looks at the menial jobs offered such as scaring birds.

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