The New Deal, Why, and How it Worked

The New Deal changed the way Americans perceived the presidency and social safety nets. Churches and private charities were unable to cope with the scale of hardship in a nation with a 25% unemployment rate, and an increasing number of people were unable to reconcile American values and social duty with the laissez-faire Social Darwinism that decreed that the destitute deserved their fate.1 Franklin Delano Roosevelt’s election campaign was to realign the Democratic and Republican parties, bringing progressives and reformers firmly onboard with the Democrats, and cementing Gilded Age conservatives on the Republican side.2

Franklin Delano Roosevelt’s privileged upbringing in a family with strong opinions about public service and the duty of the strong to aid and protect the weak had instilled in him a compassionate self-confidence and optimism combined with the energy to not only take on whatever problems the country might face, but actually find a way to solve them.3 Many wealthy Americans saw him as a class traitor for his insistence on dismantling the drastic wealth inequality which had been the hallmark of the Gilded Age. For everyone else, however, FDR was impossible to dislike, especially when his presidential campaign hinged on his intent to do something about the Depression. He vowed to help “the forgotten man at the bottom of the pyramid” by ensuring that the average American would have access to work and security.4 How he would do this was not explained, but his opponent was Herbert Hoover, who had killed his own prospects by being president during the stock market crash and by publicly stating that giving aid to the destitute was the business of private charities and church groups rather the federal government. Whatever Roosevelt’s “New Deal” might be, it had to be better than simply hoping that the economy would recover on its own. Roosevelt had the added benefit of being a northern Democrat with an understanding of Southern politics and social structure, due to his polio therapy at Warm Springs, GA.5

Roosevelt’s insistence that no one should be without food, clothing, and shelter, and that the government should provide them when employment failed, was nothing short of revolutionary in a nation that prided itself on capitalism and individualism. Capitalism seemed to be incompatible with it, as conservatives felt that poverty was punishment for worthlessness and that those who could not thrive had no place in society. Government aid would sap initiative and create a class of beggars and parasites, according to the prevailing view. Roosevelt did not have a compelling argument as to why this was not the case, but his compassion and optimism kept him certain that it wasn’t.6 After being elected, Roosevelt determined that he and his administration were to have three objectives: providing immediate relief for those out of work, programs and support for farms and businesses that would provide employment, and government reform to prevent future economic slumps and minimize the devastation they would cause. He turned to economists and social workers to determine the best way to see through these goals, and appointed prominent labour organizer Frances Perkins as secretary of labour, and the first woman cabinet member.7 Unlike what was happening overseas, Roosevelt and his collection of experts, his so-called Brains Trust, were determined to solve the Depression through capitalist means rather than through changes in the political structure that would eliminate private property and put resources under government control.8

The Brains Trust saw the problem as one of under-consumption caused by an unequal distribution of wealth, and sought to redistribute wealth so that a stable balance between production and consumption could be achieved. It was effectively socialism, but Roosevelt’s popularity kept it from being stained with the taboo that the word usually carries. Roosevelt’s “fire-side chats” provided a crucial PR campaign for his programs,9 calming people’s fears while he passed legislation to prop up the private banking system and bring it under regulation to prevent the sort of shady speculation that had led to the 1929 Crash. The New Deal’s agricultural policies were less successful, seeking to raise prices by cutting production and paying farmers compensation for land left idle and crops kept off the market. While large landowners and family farms were able to benefit from this, southern sharecroppers often found themselves evicted when the land they worked was taken out of production, and there was no relief for migratory farmworkers who were no longer needed. Better was the Farm Credit Act, which provided long-term credit on farm mortages and prevented foreclosures,10 but this too was to disproportionately benefit whites, as black and Chicano farmers were far less likely to own the land that they worked.

The Works Progress Administration was arguably the most immediately successful of the New Deal programs, and a clear product of the political winds of the day. Five billion dollars was approved for its creation in 1935, which at the time was more than the entire government revenues of the previous year.11 It established the federal government as the “employer of last resort”, providing gainful employment as an alternative to direct hand-outs. Around 75% of WPA workers were employed in building and repairing public infrastructure such as roads, bridges, public buildings, parks, and airports, but large numbers of artists, actors, writers, and musicians were able to benefit as well, and while by and large the programs tended to favour men as the social custom dictated, there were sewing rooms established that paid women to produce clothing for the needy, and WPA projects benefited far more than just those they employed. The WPA did, however, show significant discrimination against racial minorities.12

Further reaching effects of the New Deal were federal support for labour unions, which were seen as an important counterbalance for the power of corporations rather than a drain on production. Industrial workers were encouraged to organize and form unions, and existing skilled trade unions grew.13 Social Security sought to prevent poverty among the elderly by establishing publicly-funded pensions for many of the people who were excluded from private pension plans, though by excluding domestic and agricultural workers and those employed by religious and non-profit organizations, it quietly discriminated against women and racial minorities.14 Roosevelt’s tax reforms included a graduated income tax, though he had hoped for a tax on corporations and an inheritance tax to prevent the “great and undesirable concentration of control in [the hands of] relatively few individuals”.15 None of this would have been possible without Roosevelt’s charisma and energy, which brought the presidency greater power and responsibility than it had previously enjoyed, and the grass-roots popularity that allowed him to enact programs that were unpopular among the wealthy corporations who had previously controlled the political climate.

Bibliography:

Roark, James L., Michael P. Johnson, Patricia Cline Cohen, Sarah Stage, and Susan M. Hartmann. The American Promise: A History of the United States. Boston: Bedford/St. Martin’s, 2012.

1James L. Roark, et al., The American Promise (Boston: Bedford/St Martins, 2012)798.

2Roark, et al., The American Promise,790.

3Roark, et al., The American Promise,787.

4Roark, et al., The American Promise,790.

5Roark, et al., The American Promise,788.

6Roark, et al., The American Promise,789.

7Roark, et al., The American Promise,791.

8Roark, et al., The American Promise,792.

9Roark, et al., The American Promise,794.

10Roark, et al., The American Promise,797.

11Roark, et al., The American Promise,805.

12Roark, et al., The American Promise,806.

13Roark, et al., The American Promise,807-8.

14Roark, et al., The American Promise,808.

15Roark, et al., The American Promise,809.

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