On p. 799, the textbook gives us an analysis of the New Deal and how historians have evaluated FDR’s program.
1. Some historians feel that a reform movement like the New Deal would have happened whether there was a depression or not. This is because of the cycles of reform that America has endured throughout its history. A new reform movement would have tried to address the huge gap between rich and poor, the strong grip that business had on the American government, and the abuses of the stock market. Stronger measures were needed than what was done during the Progressive Era (1900-1915).
2. Contemporary historians who wrote during the 1940s – 1960s believed that the New Deal was a “revolutionary response to a revolutionary situation” and that only World War II was able to pull the country out of the Depression. FDR broke from the laissez-faire government tradition and pushed reforms through a Democratic Congress to reform America. Except for a few historians who called the New Deal “socialistic”, most historians praised the program and its accomplishments.
3. Leftist historians felt that FDR didn’t go far enough to redistribute the wealth of the nation, improve race relations, and control giant corporations and their power. For the most part, FDR left big businesses relatively alone in order to transform a “corrupt capitalist order.” It appears that leftist historians would have been happier if FDR has presided over a more socialist government and economy with some central planning. Businessmen had vilified FDR because of the effects that the New Deal had on American business – seeing him as a traitor to “his class,” essentially, that he’s rich and he’s not taking care of the wealthy interests in the country.
4. Historians in the last 40 years, including the authors of our textbook, felt that FDR acted within the American political and economic system to fix the country. When FDR overreached with the Supreme Court and tried to add 6 new Supreme Court justices after they had overturned the AAA and the NRA in 1935, public opinion and Republican Congressmen pushed back to foil his plans. Afterwards, laws were written by Congress that had to conform to existing political traditions – like the Wagner Act, the Social Security Act, and the Fair Labor Standards Act. Americans saw that something was very wrong, and that they wanted “to reform capitalism, not overthrow it.” A sign that these laws have worked has been their longevity. New Deal / FDR historian William Luechtenburg has called this time period a “half-way revolution,” neither radical or conservative, but somewhere in between that reflected what the American people wanted.
Your job: which assessment do you agree with and why? Try to keep in mind that we should judge the New Deal from the time period and not from our time period. Was the New Deal radical, too radical or not radical enough?
Use examples from the textbook, notes, and films we’ve watched.
250 words minimum response. Due Tuesday 3/26 by class.
The main thing that I want to address is the New Deal and its legacy – how Americans changed their views about government, from being laissez-faire about many things (including help during tough economic times to regulating businesses) to lending a helping hand and keeping big business under control/ intruding in private lives and hindering businesses.
The reason I wrote this new outlook as two different things is b/c there has been a on-going fight ever since the New Deal began in 1933 (and probably even before that if you want to go back as far as the Progressive Era) as to how much power the federal, state and local governments should have. Teddy Roosevelt, Taft and Wilson all increased the power of the federal government with their anti-trust lawsuits, union and worker protections, business regulations, progressive income tax, and political reforms. Harding, Coolidge and to a much lesser extent Hoover (along with the Supreme Court at the time) worked to lessen the power of the federal government or return it back to the laissez-faire times of the late 19th Century. As we know, Treasury Secretary Mellon decreased taxes on the rich, banks and stock market trading were unregulated, farmers floundered in an economic depression during the 1920s, and people had to rely on private charities, etc. for relief when they were hungry or out of work. “Hoover’s belief in the power of volunteerism and reliance on the “wisdom of the market” simply didn’t work.”
Since the 1930s, there has been a constant struggle over how much control the government will have over businesses and wages with regulation, and how big the size of the social programs will be that are created to be used as a safety net for the poor.
Starting with FDR’s New Deal programs that limited insider trading with the Securities and Exchange Commission (SEC), to the Fair Labor Standards Act which set a national minimum wage at 25 cents an hour, to the Wagner Act which for the first time ever in American history guaranteed union rights and created a commission to examine unfair labor practices, to the Social Security Act which created 1.) an old-age pension; 2.) unemployment insurance; 3.) disability insurance for those who can’t work, the size and scope of the American government ballooned like never before.
Yet, FDR’s critics felt that either he wasn’t doing enough to help the poor (like Upton Sinclair, Huey Long, and others) or that the President was a traitor to his upbringing or upper class (literally the title of a book, Traitor to His Class by H.W. Brands) like the Liberty League. Many of FDR’s strongest and most vocal critics have lately been champions of the free market or deregulation, laissez-faire business policies, cut taxes on the rich, and reducing or destroying the “American welfare state.” They accuse FDR’s New Dealers as having Socialist ties or taking their inspiration from Soviet Russia (he had 2), and also opposed President Johnson’s expansion of the New Deal in his Great Society programs like Medicare, food stamps, the creation of PBS and NPR, Head Start education programs, and other government programs created in the 1960s.
During the past 30 years or so, especially since the election of President Reagan, some New Deal and Great Society programs have been reduced or dismantled. During the 1980 campaign, Reagan campaigned against big government and promised to reduce the size of it “Government is not the solution to the problem. Government IS the problem” – Reagan’s inaugural address, Jan. 20, 1981. With the size of the government increasing, we were at risk of losing our liberties, something that former president Hoover warned about in his 1934 book, A Challenge to Liberty. A quote from the book:
“We have to determine,” Hoover wrote with surprising heat, “whether under the pressure of the hour, we must cripple or abandon the heritage of liberty for some new philosophy which must mark the passing of freedom.”
Welfare was reduced by a Republican Congress and a centrist Democratic president, Bill Clinton in 1995. President George W. Bush tried to privatize Social Security in 2005 by allowing younger workers to invest small portions in the stock market, but that idea was shot down. And currently, the Republican House wants to cut funding for social welfare programs.
On the other hand, President Obama and the 2010 Democratic Congress expanded the size and cost of the government dramatically by creating a health insurance program for all Americans who might need it (something President Clinton attempted in 1993 but failed). Also, President Bush and the Republican Congress of 2005 expanded prescription drug coverage for seniors.
And, though President Reagan railed against the size of the government, he along with Congress added $3 trillion to the National Debt during his 2 terms in office, mainly from tax cuts for the wealthy and increased military spending.
So, what gives? Is this New Deal legacy just about Republicans vs. Democrats? Or is it about who has the power in government? When the government creates spending programs, sometimes these programs don’t just help out the poor and needy; they help out the middle-class and wealthy too (who soon become dependent on the government $$). Maybe President Hoover was right about the government not giving handouts to anybody – people or businesses.
And if government leaves businesses and banks alone in a free-market atmosphere, what keeps them from bankrupting the system like they did in 2008? How can we trust businesses to be honest when we have seen a legacy of greed and corruption in the past few decades?
My questions: Where is there a perfect balance between government taxing and spending and regulation? Explain. Is a perfect balance even possible? Why or why not?
250 words total. Due Friday, April 15.
Inequality in America: http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
Why is it so hard to raise taxes on the rich? http://www.salon.com/news/politics/barack_obama/index.html?story=/politics/war_room/2011/04/14/obama_budget_income_inequality
The fight that just won’t die: http://www.salon.com/news/politics/war_room/2011/04/10/hoover_roosevelt_rapaport/index.html