Discussion 5

Prompt: Describe FDR's response to the Great Depression during the 1930s. What made up the New Deal?

The Great Depression began in 1929 and significantly impacted the United States economy, causing widespread poverty and unemployment for one out of every four people. Although not the sole cause of the Depression, the Stock Market Crash of 1929 started a ripple effect in the economy that resulted in the disastrous economic conditions of the 1930s. The American economy in the late 1920s lacked diversity, being primarily focused around real estate and automobiles. In addition, the middle class was small due to unequal wealth distribution that favored the upper class and wealthy business owners. These factors made economic recovery difficult as the majority of people did not have stable income sources or enough confidence to spend their money and stimulate the economy.

During the Presidential Election of 1932, the Democratic nominee Franklin D. Roosevelt promised a solution to the Great Depression, which built support from voters and secured him the presidency. His promised plan was known as the New Deal, and although the details of the plan were vague, the American people were desperate for the crisis to end and elected him as the 32nd president of the United States. After being elected, FDR brought in economists, social activists, and other professionals to help bring his New Deal to fruition. Before FDR, the U.S. government was largely conservative with a hands-off stance towards the economy. However, FDR increased the federal government’s involvement in the economy to provide relief to workers and help the nation recover.

FDR’s first three months in office are known as the Hundred Days, and were characterized by large amounts of legislature. During his first week in office, Roosevelt closed the nation’s banks temporarily to assess their conditions and provide stability to the economy. He communicated with the public through the use of radio broadcasts and when the banks were reopened people had confidence in the banking system, resulting in more deposits than withdrawals. In addition to stabilizing banks, he established the National Recovery Administration, which aimed to help the economy recovery by promoting better labor rights for workers and stabilizing industrial prices. The Supreme Court eventually declared the NRA unconstitutional in 1935, but FDR also created millions of government jobs through initiatives such as the Federal Emergency Relief Administration and the Civilian Conservation Corps. Roosevelt’s administration also dealt with public-works projects, agriculture, and the housing market to provide economic relief. FDR faced criticism from people who believed that the federal government should not have as much power as it did, but his policies ultimately strengthened the nation and helped lead the country out of the Great Depression.