Economic policy review

What is a “Red Scare?” Why did the US experience a Red Scare after WWI? How did the US government restrict the rights of individuals during this time?

A “Red Scare” is when people in the U.S. became really scared of communism spreading in the country. It’s called “Red” because red is the color that was associated with communists, especially after the Russian Revolution in 1917.

After World War I, the U.S. experienced a Red Scare because people were worried that the ideas of communism and revolution might spread from Russia and Europe to America. There were a lot of strikes, bombings, and unrest at the time, and some people blamed immigrants or radicals for trying to start a communist uprising. The fear got worse because of events like the Russian Revolution, which overthrew the Russian government and made it communist.

During this time, the U.S. government started to restrict people’s rights. They arrested and deported immigrants who were suspected of being radicals, especially during the Palmer Raids. The government didn’t always have proof, but they still jailed people or kicked them out of the country. The First Amendment rights, like free speech and freedom of assembly, were often ignored if someone was thought to be a communist or supported those ideas.

Overall, it was a time of fear and suspicion, and a lot of innocent people were treated unfairly just because others were scared of communism.

Why was there a rise in nativism after World War I? What laws did the US government pass after the war that restricted the flow of immigration into the US? 

After World War I, there was a rise in nativism in the U.S. because many Americans were worried about immigrants taking jobs, changing American culture, or bringing dangerous political ideas like communism. Nativism is basically the belief that people born in the U.S. are better than immigrants, and that the country should protect itself from foreign influence.

There were a lot of changes and problems after the war—like economic struggles, strikes, and the Red Scare—which made people blame immigrants for some of the issues. Many Americans thought that immigrants, especially from Southern and Eastern Europe, couldn’t fully “fit in” or be trusted.

Because of these fears, the U.S. government passed laws to limit immigration. Two big ones were:

1. The Emergency Quota Act of 1921 – This law limited the number of immigrants from each country. It used a quota system based on the 1910 census, which favored immigrants from Northern and Western Europe.

2. The Immigration Act of 1924 (also called the Johnson-Reed Act) – This made the quotas even stricter and used the 1890 census instead, which further reduced immigration from places like Italy, Poland, and Russia. It also pretty much stopped immigration from Asia.

These laws showed how much Americans at the time wanted to slow down immigration and protect what they thought was the “traditional” American way of life.

Why did membership in the Ku Klux Klan grow dramatically after WWI?

Membership in the Ku Klux Klan grew a lot after World War I because many Americans were feeling afraid and unsure about all the changes happening in the country. There were a lot of immigrants coming in before the war, and after the war ended, people started to worry more about losing jobs, different cultures mixing, and new political ideas like communism.

The KKK took advantage of these fears. They didn’t just target Black Americans anymore—they also went after immigrants, Catholics, Jews, and anyone who they thought wasn’t “100% American.” The Klan said they were protecting traditional American values, and some people agreed with that, especially in small towns and rural areas.

Also, during this time, movies like The Birth of a Nation made the KKK look like heroes, which sadly helped their image and made more people want to join. At its peak in the 1920s, the Klan had millions of members across the country, not just in the South.

So basically, the KKK grew because people were scared of change, and the Klan promised to fight back against it—even though their methods were hateful and violent.

Many historians define the 1920’s by the clash between “old” and “new” values in the US. How do the Scopes Trial and the flapper phenomenon illustrate this clash?

The 1920s are often seen as a time when “old” and “new” values clashed in the U.S. This means that traditional beliefs and lifestyles were being challenged by more modern and changing ideas. Two big examples of this were the Scopes Trial and the flapper phenomenon.

The Scopes Trial in 1925 was about a teacher in Tennessee named John Scopes who was put on trial for teaching evolution in school, which went against a state law. People who supported “old” values, like religious beliefs and the Bible, didn’t want evolution taught. But others believed in science and modern education. The trial became a big national story and showed the conflict between religion and science, or old ways of thinking vs. new ideas.

The flapper phenomenon was about young women in the 1920s who started dressing differently, cutting their hair short, going out to dance clubs, and acting more independent. Flappers broke traditional rules about how women were supposed to act. Older generations thought they were wild or inappropriate, while younger people saw them as symbols of freedom and change.

Both the Scopes Trial and flappers showed how the country was split between holding on to traditions and moving forward with modern ideas. It was like a battle between the past and the future.

Define the Harlem Renaissance. Why do you think this movement happened in the 1920’s? What are some examples of artists, authors, musicians, etc that participated in the Harlem Renaissance?

The Harlem Renaissance was a cultural movement during the 1920s where African American writers, artists, musicians, and thinkers celebrated Black culture and creativity. It mostly took place in Harlem, a neighborhood in New York City, and it was the first time Black voices and talent got a lot of attention across the country.

This movement happened in the 1920s for a few reasons. After World War I, many African Americans moved from the South to the North during the Great Migration to escape racism and find better jobs. A lot of them ended up in big cities like New York. In Harlem, they formed a strong community and started expressing themselves through music, art, and writing. Also, the 1920s was a time of big change in America, and people were more open to new ideas and cultures, especially in cities.

Some famous people from the Harlem Renaissance include:

• Langston Hughes – a poet who wrote about the everyday lives and dreams of Black Americans.

• Zora Neale Hurston – an author known for writing about African American culture in the South.

• Duke Ellington and Louis Armstrong – famous jazz musicians who changed music forever.

• Jacob Lawrence – a painter who showed African American life through his art.

The Harlem Renaissance was important because it helped Black artists get recognition and inspired pride in African American culture.

What is Nativism? Why was it on the rise in the U.S. in the 1920’s?

Nativism is the belief that people born in the United States (native-born Americans) are better than immigrants, and that the country should protect its culture and jobs from foreign influence. Nativists often believed that immigrants were a threat to American values, traditions, and the economy.

Nativism was on the rise in the 1920s for a few reasons:

1. Fear of Communism – After the Russian Revolution and the Red Scare, people were afraid that immigrants from Europe might bring communist or anarchist ideas to the U.S.

2. Job Competition – After World War I, soldiers came home and needed jobs, so some Americans blamed immigrants for “taking” them.

3. Cultural Changes – America was changing fast in the 1920s. Cities were growing, and people were more open to new ideas, which made some traditional Americans nervous. They thought immigrants were changing the culture too much.

4. Racism and Prejudice – A lot of nativism was based on racism and negative stereotypes, especially against immigrants from Southern and Eastern Europe, as well as Asia.

Because of all this, the U.S. passed strict immigration laws like the Emergency Quota Act (1921) and the Immigration Act of 1924 to limit the number of immigrants coming into the country.

The 1920’s are often referred to as the “Roaring 20’s”? Why is that the case? What arguments can be made that the 1920’s was really a period of “false prosperity?

The 1920s are called the “Roaring 20s” because it was a time of big change, excitement, and growth in the U.S. The economy was booming, people were spending money on new things like cars, radios, and movies, and there were lots of social changes. Jazz music became super popular, young people went to clubs and dance halls, and women started wearing shorter dresses and acting more freely (like flappers). It felt like a fun and modern time, especially in the cities.

But even though it looked like everything was great, some people say the 1920s was really a time of “false prosperity.” That means things seemed better than they really were underneath. Here’s why:

1. Credit and Debt – A lot of people were buying things using credit (installment plans), which means they were going into debt. They looked rich, but they weren’t actually able to afford what they bought.

2. Farmers Struggled – While cities were booming, farmers were having a hard time. After WWI, food prices dropped, and many farmers went into debt or lost their land.

3. Stock Market Risks – People were investing in the stock market like crazy, often without understanding the risks. Some even borrowed money to buy stocks, which was super risky.

4. Wealth Gap – Most of the wealth went to the rich, while many Americans were still poor. So not everyone was enjoying the “Roaring” part of the decade.

5. It All Crashed – In 1929, the stock market crashed, leading to the Great Depression. That showed that the economy wasn’t as strong or stable as people thought.

So, even though the 1920s seemed like an exciting and rich time, there were a lot of problems building up that people didn’t notice until it was too late.

Explain how many Americans were investing in the stock market and why the market eventually crashed?

In the 1920s, a lot of Americans started investing in the stock market because it seemed like an easy way to get rich. Stock prices kept going up, so people thought it was a guaranteed way to make money. Even regular, middle-class people who had never invested before started buying stocks.

One big reason this became a problem was because many people were buying stocks “on margin.” That means they borrowed money from a broker to buy stocks, only paying a small part up front. For example, they might pay $10 to buy a $100 stock, hoping the stock would go up and they could sell it for a profit, then pay back the loan and keep the rest. This worked as long as stock prices kept rising.

But the stock market wasn’t actually based on real value—it was full of speculation (guessing and hoping prices would go up). Eventually, people realized the companies weren’t always worth the high stock prices.

In October 1929, the market started to drop, and people panicked. They tried to sell their stocks all at once, which caused prices to fall even more. Those who bought on margin couldn’t pay back what they owed because their stocks were now worthless. This became known as the Stock Market Crash of 1929, and it helped lead to the Great Depression.

So basically, too many people were borrowing money to buy stocks they didn’t really understand, and when the prices fell, everything came crashing down.

What were the major causes of the Great Depression? Be able to explain why these causes led to the Great Depression.

ChatGPT said:

The Great Depression was the worst economic crisis in U.S. history, and it started in 1929. There were a bunch of reasons why it happened, and they all added up to cause major problems. Here are the major causes and why they mattered:

1. Stock Market Crash of 1929 – This was the big event that kicked it off. People had invested too much money (often borrowed) into the stock market, and when prices started falling, everyone panicked and tried to sell. The crash caused people to lose all their savings and trust in the economy.

2. Bank Failures – After the crash, many banks went out of business. People ran to get their money out, but the banks didn’t have enough cash. When banks closed, people lost their savings, and businesses couldn’t get loans to stay open.

3. Overproduction – Factories and farms were making more goods than people could afford to buy. There were too many products and not enough customers, so companies had to cut back, lay off workers, and close.

4. Uneven Distribution of Wealth – A lot of the money was in the hands of a few rich people, and most Americans didn’t have enough to buy all the stuff being produced. That hurt the economy because people couldn’t spend enough to keep businesses going.

5. Too Much Buying on Credit – People were buying cars, appliances, and even stocks using credit. When they couldn’t pay off their debt, businesses didn’t get their money back, and that hurt the economy even more.

6. Decline in World Trade – After WWI, other countries were also struggling. Then the U.S. passed high tariffs like the Hawley-Smoot Tariff, which made imported goods expensive. Other countries responded with their own tariffs, and global trade slowed down, hurting businesses everywhere.

All of these problems built up over time. When one thing failed, it caused a chain reaction. People lost jobs, had no money to spend, businesses shut down, and the economy basically collapsed. That’s how the Great Depression started and got worse.

What was Herbert Hoover's response to the Great Depression? Was it effective?

Herbert Hoover was president when the Great Depression started, and his response was mostly to encourage people to stay calm and believe that the economy would fix itself. He believed in something called “rugged individualism,” which meant people should work hard and solve their problems without depending on the government.

At first, he didn’t want the government to get too involved. He thought giving people direct help (like money or jobs) would make them lazy. Instead, he tried to help businesses and banks with programs like the Reconstruction Finance Corporation (RFC), which gave loans to big companies, hoping that would create jobs and help the economy grow again.

He also started a few public works projects, like the building of the Hoover Dam, to create jobs. But overall, he didn’t do enough to help the average person who was struggling to eat or find a job.

His response wasn’t very effective. The Depression kept getting worse while people were losing their jobs, homes, and savings. Many Americans blamed Hoover for not doing more, and things like “Hoovervilles” (shantytowns where homeless people lived) were named after him to show their anger.

Because of this, people were ready for a big change, and in 1932, they elected Franklin D. Roosevelt, who promised a “New Deal” and more government action to help people.

How were Americans impacted by the Great Depression? Include a description of the Dust Bowl.

The Great Depression had a huge impact on Americans’ lives. Millions of people lost their jobs because businesses closed or cut back. Without jobs, many families couldn’t pay rent or buy food, so a lot of people became homeless or had to move in with relatives. People waited in long lines at soup kitchens to get free food, and many felt hopeless or really stressed about their future.

Banks also failed, so some people lost their life savings overnight. This made things even worse because they didn’t have money to start over. Kids often had to drop out of school to help their families, and families sometimes got separated because they had to move around looking for work.

The Dust Bowl made things even harder for people, especially farmers in the Great Plains states like Oklahoma, Texas, Kansas, and Nebraska. The Dust Bowl happened in the 1930s when a mix of bad farming practices and a long drought caused the soil to dry up and turn to dust. Strong winds blew this dust around in huge storms called “black blizzards,” which ruined crops and made it impossible to farm.

Because of the Dust Bowl, many farmers lost their land and homes. Thousands of families, called “Okies” (named after Oklahoma), packed up and moved west to places like California, hoping to find work and a better life. But life was still really tough for them there.

Overall, the Great Depression and the Dust Bowl caused a lot of suffering, changed how people lived, and showed how fragile the economy and environment could be.

How was FDR’s New Deal different from the economic strategies of Hoover?

ChatGPT said:

FDR’s New Deal was really different from Hoover’s approach to fixing the Great Depression. While Hoover mostly believed in “rugged individualism” and thought the government shouldn’t get too involved in people’s lives, FDR believed the government had to take big, active steps to help people and fix the economy.

Here are some key differences:

• Government Role: Hoover wanted businesses and charities to help people, but FDR’s New Deal had the government create programs to provide jobs, money, and support directly to Americans who were struggling.

• Relief Programs: FDR started programs like the Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA) that put millions of people to work building roads, schools, and parks. Hoover didn’t do anything on that big of a scale.

• Social Safety Nets: FDR created agencies like Social Security to help older people and the unemployed, which was new at the time. Hoover didn’t set up anything like that.

• Banking: After lots of banks failed, FDR closed all banks temporarily with a bank holiday and then made new rules to make banks safer. Hoover tried to help banks but didn’t do a bank holiday or make big changes.

In short, FDR’s New Deal was about direct government action to help people right away and fix the economy, while Hoover mostly hoped things would get better on their own and avoided too much government involvement. Many people thought FDR’s approach was much better during such a big crisis.

Please list and explain 8-10 New Deal programs. 

1. Civilian Conservation Corps (CCC)
   This program gave jobs to young men planting trees, building parks, and helping with conservation projects. It helped both the environment and people who needed work.

2. Works Progress Administration (WPA)
   The WPA put millions of unemployed people to work building roads, schools, bridges, and even helped artists and writers find jobs.

3. Social Security Act
   This created a system where older people, disabled people, and unemployed workers could get money from the government to help them survive.

4. Federal Deposit Insurance Corporation (FDIC)
   The FDIC made sure people’s bank deposits were safe. If a bank failed, people wouldn’t lose all their money anymore.

5. Tennessee Valley Authority (TVA)
   The TVA built dams and power plants in the Tennessee Valley to provide electricity, control flooding, and create jobs in a poor area.

6. National Recovery Administration (NRA)
   The NRA tried to help businesses by setting fair prices and wages and making sure workers had better conditions. It was meant to stop companies from cheating customers and workers.

7. Agricultural Adjustment Act (AAA)
   This program helped farmers by paying them to grow less food so prices would go up and farmers could make more money.

8. Securities and Exchange Commission (SEC)
   The SEC was created to regulate the stock market and prevent the risky and unfair practices that caused the 1929 crash.

9. Federal Emergency Relief Administration (FERA)
   FERA gave money to state and local governments to help people who were starving or homeless during the Depression.

10. Public Works Administration (PWA)
    The PWA funded big construction projects like bridges, dams, and schools to create jobs and improve the country’s infrastructure.

These programs helped millions of people get jobs, protect their money, and improve their lives during the tough times of the Great Depression.

Why did FDR attempt to “pack the court” in 1937? Why was he unsuccessful?

FDR tried to “pack the court” in 1937 because some of the Supreme Court justices were saying that parts of his New Deal were unconstitutional. They were stopping him from doing some of the things he thought were needed to help the country during the Great Depression.

So, FDR wanted to add more justices to the Supreme Court—up to six more—who would agree with his ideas. This way, he hoped the court would stop blocking his programs.

But many people, including members of Congress and the public, thought this was unfair and a way for FDR to get too much power. They worried it would mess up the system of checks and balances that keeps the government balanced.

Because of this opposition, FDR’s plan failed and didn’t pass in Congress. Even though he didn’t get to add new justices, the Court eventually started approving New Deal programs on its own.

Explain the arguments for and against the New Deal.

Arguments For the New Deal:

• The New Deal helped millions of people who were suffering during the Great Depression by creating jobs and providing financial support.

• It saved the banking system and made it safer so people wouldn’t lose their money again.

• Programs like Social Security helped protect older people and the unemployed.

• It improved the country’s infrastructure by building roads, schools, and parks.

• The New Deal showed that the government could step in to help during a crisis and protect regular Americans.

Arguments Against the New Deal:

• Some people thought the New Deal gave the government too much power and interfered too much in people’s lives and businesses.

• Critics said it was too expensive and increased the national debt a lot.

• Some believed it didn’t end the Great Depression and that it slowed down economic recovery.

• Business owners and conservatives argued that programs like the minimum wage and regulations made it harder for companies to make money.

• Others felt that the New Deal didn’t do enough to help African Americans and women.

So, while the New Deal helped a lot of people and changed how the government worked, some thought it went too far or didn’t do enough in certain ways.

What was the GI Bill? How did it help Americans get on more stable financial ground?

The GI Bill was a law passed in 1944 that helped World War II veterans get back to normal life after the war. It gave them benefits like money for college, training for jobs, and loans to buy houses or start businesses.

The GI Bill helped veterans get on more stable financial ground by:

• Paying for their college education or technical training, so they could get better jobs.

• Helping them buy homes with low-cost loans, which made it easier to own a house.

• Giving money for things like starting a business or getting medical care.

Because of this, a lot of veterans were able to get good jobs and buy homes, which helped build a strong middle class in America after the war. The GI Bill helped many people have a better future and the economy grow.

What was the goal of the Great Society? What specific programs were launched to fight the “War on Poverty”?

The goal of the Great Society was to make America a better place by fighting poverty, improving education, and making sure everyone had equal rights and opportunities. It was President Lyndon B. Johnson’s plan in the 1960s to help poor people and create a fairer society.

To fight the “War on Poverty,” the government started several programs, including:

1. Medicare and Medicaid – These programs helped provide health care for elderly people and low-income families who couldn’t afford doctors or hospitals.

2. Head Start – A program that gave preschool education to poor kids so they could start school ready to learn.

3. Job Corps – This gave job training and education to young people who didn’t have many opportunities.

4. Food Stamps (now called SNAP) – Helped poor families buy food so they wouldn’t go hungry.

5. Economic Opportunity Act – This created programs to help people find jobs, get education, and improve their communities.

Overall, the Great Society programs tried to reduce poverty and give more people a chance to succeed in life.

What was Reaganomics? What specifically did Reagan do to change the economy in the 1980’s?

Reaganomics was President Ronald Reagan’s plan to fix the economy in the 1980s. It was based on the idea that if the government cut taxes and made rules easier for businesses, the economy would grow, create jobs, and help everyone.

Here’s what Reagan did to change the economy:

1. Cut taxes — He lowered taxes, especially for rich people and businesses, hoping they would invest more money and create jobs.

2. Reduced government spending — He tried to cut back on some government programs, especially social welfare programs, to reduce the size of the government.

3. Deregulation — Reagan reduced government rules on businesses, letting companies operate more freely.

4. Increased military spending — Even though he cut other government programs, he spent a lot more on the military during the Cold War.

5. Fought inflation — His administration worked with the Federal Reserve to control inflation (which is when prices go up too fast).

Supporters say Reaganomics helped the economy grow and created jobs, but critics say it made the gap between rich and poor bigger and hurt some people who needed government help.

Explain NAFTA.

NAFTA stands for the North American Free Trade Agreement. It was a deal made in 1994 between the United States, Canada, and Mexico. The goal of NAFTA was to make trade easier between these three countries by removing taxes (called tariffs) on things they buy and sell from each other.

Because of NAFTA, companies could sell goods and services across the borders without extra costs, which helped businesses grow and made some products cheaper for consumers.

But some people didn’t like NAFTA because they thought it caused American jobs to move to Mexico, where workers were paid less. Others said it hurt the environment or didn’t do enough to protect workers’ rights.

So, NAFTA was meant to help the economy by encouraging trade between the U.S., Canada, and Mexico, but it also caused some arguments about jobs and fairness.

How did the Obama administration respond to the Great Recession?

The Obama administration responded to the Great Recession (which started in 2008) by trying to fix the economy and help people who were struggling. One of the first things they did was pass a big law called the American Recovery and Reinvestment Act in 2009. This law gave money to create jobs, build roads and schools, and help people keep their homes.

Obama’s government also helped bail out the auto industry so companies like Ford and General Motors wouldn’t go bankrupt, which saved a lot of jobs.

They also worked to fix the banking system and prevent another crash by making new rules on banks with the Dodd-Frank Act.

Plus, Obama passed the Affordable Care Act (Obamacare) to help more people get health insurance during tough times.

Overall, the Obama administration’s goal was to help the economy recover faster and protect people from losing everything during the recession.

Please make sure you understand the difference between trickle down/laissez faire economic policy and direct relief/stimulus based economic policy.

Got it! Here’s the difference between the two in simple terms:

• Trickle-down economics (also called laissez-faire) is the idea that if the government helps big businesses and rich people by cutting their taxes and letting them do what they want, then the money will “trickle down” to everyone else. The hope is that businesses will grow, create jobs, and people lower down will benefit.

• Direct relief or stimulus-based economics is when the government spends money directly to help regular people by creating jobs, giving money to the poor, or building things like roads and schools. This way, people get money right away and can spend it to help the economy.

So basically, trickle-down waits for money to slowly reach everyone through business growth, while direct relief gives money straight to the people who need it to keep the economy going.