New Deal

Imposition of Tariffs:
- In 1930, Hoover imposed tariffs on imported agricultural goods.
- Aim: To raise agricultural prices and protect American industries.
- Outcome: Tariff did not successfully raise prices for agricultural goods due to already decreased American purchasing power; led to inflation for imported goods.
Established Organizations:
- Reconstruction Finance Corporation (RFC):
- Provided loans to failing businesses to stabilize the economy.
- Federal Home Loan Bank System:
- Aimed at providing relief to homeowners facing foreclosure.
Infrastructure Funding:
- Earmarked $2 billion for infrastructure projects.
- No direct relief for rising unemployment.

Introduction to FDR:
- A Democrat who responded to the Great Depression with reforms known as the New Deal.
Two Phases of the New Deal:
- First New Deal: Focused on economic planning and regulation rather than dismantling large corporations.
- Rationale: Breaking up big businesses would lead to job losses during fragile economic times.
Key Components of the First New Deal:
- National Industrial Recovery Act (NIRA):
- Established the National Recovery Administration (NRA).
- Goals: Regulate production, working conditions, prices—a move away from unrestrained competition.
- Controversy: Favoritism towards large companies in writing regulatory codes; minimal support for unions.
- Emergency Banking Act:
- Funded vulnerable banks and established the Federal Deposit Insurance Corporation (FDIC) for deposit insurance.
- Glass-Steagall Act:
- Prevented banks from buying/selling stocks, protecting depositor assets.

The Dust Bowl:
- Environmental disaster led to severe agricultural decline exacerbating economic issues.
- Caused by drought and mechanized farming techniques leading to soil erosion.
Government's Job Creation Efforts:
- Civilian Conservation Corps (CCC):
- Provided jobs in natural resource conservation.
- Public Works Administration (PWA):
- Contracted public works, enhancing infrastructure.
- Agricultural Adjustment Act (AAA):
- Set production quotas to manage agricultural supply and stabilize prices.
- Farmers incentivized not to use all land through subsidies.

Rise of New Labor Movements:
- Formation of the Congress of Industrial Organizations (CIO):
- Umbrella organization of unions that advocated for workers' rights.
- Engaged in collective bargaining with big companies.
Union Dynamics:
- CIO differed from the older American Federation of Labor (AFL):
- CIO accepted government intervention in labor issues, while AFL favored minimal government involvement.

Shift in Focus:
- Transitioned from planning and regulation to redistribution of wealth.
Social Security Act:
- Introduced unemployment insurance, pensions for the elderly, and aid to the disabled.
- Funded through federal tax revenue and paychecks, creating a substantial government bureaucracy.
Consequences of the New Deal:
- Redefinition of freedom from a focus on individual contracts to ensuring a base standard of living for all citizens.
- Emergence of a significant leftist political movement influenced by economic equity concerns.

Exclusions in Social Security:
- Domestic workers and agricultural workers often excluded, leading to significant gaps in coverage, particularly affecting women and minorities.
- Dependency on welfare programs created stigmas against marginalized communities.
Political Backlash:
- Conservative Supreme Court deemed key elements of the New Deal, like the NRA, unconstitutional.
- Roosevelt's response was an attempt at court packing to ensure favorable rulings for New Deal programs.
Final Note on the Great Depression:
- Unemployment remained high (over 15%) until World War II spurred economic recovery through wartime production efforts.