The New Deal
The stock market in America collapsed on Tuesday 29th October 1929 after having been flourishing for sometimes. This was followed by severe economic downturns whose proportions had not been experienced before. This marked the beginning of the Great Depression which left many people jobless since most companies became bankrupt. Herbert Hoover was the president at that time. He saw these events as simple shocks and he expected the economy to self-regulate after a while. On taking over the presidency in 1933, Roosevelt aimed at prescribing solutions to this economic crisis. The administration that he led implemented several programs with aim of reviving the economy. The programs were called the New Deal. The focus of this paper is on exploring the details of the New Deal. It indicates why this deal improved government –citizens’ relations despite being unsuccessful.
President Hoover is looked at as a progressive leader. He maintained that giving the citizens aid directly would not solve the depression crisis. He supported the volunteerism notion strongly in order to raise money and he extended assistance to public projects and financial institutions although indirectly. He upheld the idea that the government was not in a position to manipulate currency and control prices.
The government implemented several initiatives under the New Deal. On taking office, President Roosevelt directed that all unstable banks be closed in the country as a way of protecting the economy against further losses of its savings. The congress supported this move by passing the Emergency Banking Act as well as forming the Federal Deposit Insurance Corporation (FDIC). This protected the savings of the Americans against uncertainties. The citizens’ faith in banks was restored by this measure. After a short while, there were more deposits than withdrawals and this led to reopening of most banks.
Allocating funds to aid agencies locally was the next initiative. This was done on the basis of the Federal Emergency Relief Administration (FERA). However, commentators opposed this move by arguing that issuing relief aid was unhealthy for the US economy. Regardless of the criticism, this measure kept resurrecting relief programs.
Civil Works Administration (CWA) was the other intervention. This created jobs for the jobless via the repair and building of infrastructure. This gave 4 million workers hope. Civilian Conservation Corps that started in 1934 provided employment to women and men in the beaches, parks and forests. This restored the Americans’ self-esteem while incorporating the values of independent living.
The May 1933’s Federal Securities Act was very important for the long term success of businesses’ operations since the congress provided the Federal Research Board powers to regulate sales and purchases of stocks. Cheap electricity was provided by the Tennessee Valley Authority by re-establishing the hydroelectric power system in the valley. Work Progress Administration offered more employment opportunities to Americans by constructing airports, hospitals and schools.
The Wagner Act or the National Labor Relations was a legislation that Roosevelt administration established in order to prevent interference with the labor unions by the employers as well as protests of the workers in addition to arbitration of disputes between employees and employers. It is still a vital legislation that offers protection to the rights of workers even today.
Efforts of the business sector and the government were combined by the National Recovery Administration to prevent the economic crisis from escalating. This included continued publicity campaigns that incorporated fair conduct codes such as wages determination and pricing by businessmen and government recognition of the unions.
A pension payment framework was laid down by the Social Security Act. This also provided compensation to workers who sustained injuries during industrial accidents. It also offered unemployment insurance to cater for those who were physically disabled and the jobless. To most people, the Fair Labor Standard Act acted as the triumph for social reformers since it illegalized child labor while setting the standards of minimum wage for employees.
There were setbacks of the programs of the new deal. These were seen from political opponents’ perspective. Conservatives of the Supreme Court considered these programs unconstitutional since they appeared as an extension of the Federal Authority. Implementing new programs became hard for Roosevelt due to the combined efforts of opponents and conservatives in the congress. Regardless of the promises, the programs of the new deal realized short-term objectives only. They were unable to address the main causes of the Depression. Thus, the Great Depression continued. It ended when the Second World War started because the industrial sector was stimulated.
Although the new deal failed, the approach taken by Roosevelt was viewed at as having been better than those taken by the previous administrations. This government was interventionist which was different from that of Hoover which waited for depression to disappear. Americans were also united by the new deal. Many programs that were established at that time including agricultural subsidies, social security and unemployment insurance exist today.