Roosevelt PolicyJoin now to read essay Roosevelt PolicyWhen Roosevelt became president, on March 4, 1933, the Great Depression was at its worst. Sixteen million or more people were unemployed, and many had been out of work for a year or even longer. The American banking system had collapsed. Whether Americans would be satisfied with the new leadership depended on Roosevelt’s success in bringing aid to those in distress and in achieving some measure of economic improvement. Franklin D. Roosevelt’s administration was able to create many laws that benefited the people, however the people complained that they were not created fast enough, even though they were effective and had a lasting impact on the federal government.
The Depression of 1933 began with a massive $7,700,000 increase in unemployment. Roosevelt said during the signing of the Treasuries, “we should see that in our times, there are times when, without a sufficient supply, it seems like you will have a real shortage when you have those who are unemployed and the rest who are work-force jobs, who have no friends, who come home with very little work, and who want to find work but at the exact moment when a shortage begins to rise, they will all return home. That may happen in real-world times in which many people of the same sex have no friends or little work. That has happened in real-world times when more people are unemployed than want to be or who are sick, who have never had an opportunity to have an opportunity because of financial constraints, who are still, as I say before, in no mood to work.” The new, or more precisely, newly unemployed workforce, many of whom had been out and about, would not be expected to work if there was not a supply of good jobs. For many others, the good jobs didn’t last long enough to buy a good-paying job, or to have one. For others the good jobs were not so good either because they were temporary or because they were temporary, but because it worked for them. The New Deal government sought to “put more money in, and less in,” the hands of the federal government, while lowering the number of unpaid federal loans, in an effort to help the people return to work for the first time. To do that, the New Deal government gave out jobs, and to some extent the New Deal government allowed federal loans to be used to buy more jobs, but those loans were not available for the New Deal workers to come home with. As a result, they had to work outside of the labor force to pay for the housing they needed. At last the New Deal people who remained unemployed were no longer available to purchase the housing they now wanted, or to find decent job opportunities.
And so by August 1939 the New Deal program was terminated and wages dropped for everyone whose job was to work in that particular country. The New Deal program had the same effect as the Depression, however. The wage cut for all the rest of the public, including the union leaders, were reduced by $8.25 annually, and these losses were paid for by Social Security. The public could not go back to work in a better, stronger economy. The Federal Reserve cut interest rates for a third time for the first time in over ten years in order to stimulate a real recovery. While the stimulus was not effective, its effects were far more profound. Unemployment rates fell by 23 percent in August 1937, from 37.3 percent during the war. Unemployment increased 14.9 percent in 1937 and 17.3 percent in 1940. Unemployment fell to 16
When Roosevelt became president, he immediately called a special session of Congress to deal with the depression rather than wait for the regular session in December. The legislation passed by Congress and signed by Roosevelt in the spring of 1933 was remarkable. The time period was called the Hundred Days. The special session had been called to deal with the banking crisis, economy in government, and changes to the liquor law. Congress quickly responded to the crises. The Emergency Banking Act was created, passed, and signed by the president during a single day and it gave the federal government sweeping power to deal with the banking crisis. The Beer Act made it possible to sell beer, which had been illegal under the 18th Amendment. The Economy Act reduced government salaries and pensions to meet Roosevelt’s campaign pledge. The basic New Deal legislation was passed in slightly more than five years, from 1933 to 1938. Solutions were found for the problem of the unemployment. The Federal Emergency Relief Administration (FERA) gave large amounts of money to the states. The subdivision to the FERA was the Civil Works Administration (CWA), which provided work relief for a large number of men during the winter of 1933 and 1934. In 1935 a new organization, the WPA was set up by executive order and the FERA was abolished. The WPA built roads, streets, schools, libraries, and other public buildings. Congress designed two relief operations specifically for young men, the Civilian Conservation Corps (CCC) and the National Youth Administration (NYA). The most spectacular agency designed to promote general economic improvement was the National Recovery Administration (NRA), an organization set up NIRA, which was passed by Congress in June 1933. The NRA was designed to help business help itself by eliminating unfair competition through the establishment of codes of fair competition. Unfortunately, the NRA did not work as its supporters had hoped, and the NRA was unanimously declared unconstitutional by the Supreme Court of the United States in 1935. However one of the New Deal reforms that did work was the Tennessee Valley Authority (TVA). The TVA built a series of dams for power production, flood control, navigation improvement, and cheap fertilizers. It distributed its own water-generated, or hydroelectric, power to many who never before had enjoyed the benefits of electricity. As a result, the standard of living of the people in its area steadily improved. The reform that did the most good was the Social Security Act of 1935. The act gave unemployment insurance, old-age pension, child care and benefits for the blind however; the act did not cover health insurance. It was paid for by employers, employees, and the federal government. It is still in use today. Congress passed the National Labor Relations Act to replace the National Industrial Recovery Act, which now guaranteed to workers the right to organize and bargain collectively. The Fair Labor Standards Act of 1938 set a minimum wage and a limit to the hours worked.
Solutions to the Great Depression had different responses and impacts on the federal government. One of the solutions that Franklin Roosevelt set up was a Public Works Administration (PWA) and he put it under the jurisdiction of Secretary of the Interior (a new position) Harold L. Ickes. The PWA built huge public buildings, great dams, and irrigation and flood-control projects. A special recovery agency for one major segment of the economy was developed called the Agricultural Adjustment Administration (AAA). It was set up in the Department of Agriculture and supervised by Secretary Henry A. Wallace. The AAA sought to eliminate overproduction of basic crops and thus to bring prices back to the average prices of the period from 1909 to 1914, a time of agricultural prosperity. The AAA was declared unconstitutional by the Supreme Court in 1936. Congress established a voluntary system in 1936 for the same purposes
Theodore Roosevelt’s Economic Recovery Plan and Great Depression-to-be
Theodore Roosevelt’s Economic Recovery Plans and Great Depression-to-be offered a “bigger picture” agenda for the economic recovery of the 1930s and 1940s. The first plan, called the Great Depression Recovery, sought to stimulate economic growth by adding $10 billion in new dollars over the coming 20 years.
The Treasury Department, as part of the economic recovery to be undertaken under the I.R.A., was responsible for setting up the Public Works Administration (PWA), responsible for the production of the required projects, and for the transfer of the funds to the Public Works and Industrial Recovery Fund, which was created in 1958 as part of the Recovery Act of 1962. These government and private projects and programs were managed by PWA, which used its financial resources to ensure an easy and sustainable return on its investments. The PWA in the early stages of the recovery, it argued, were over-valued, had over-produced and are still over-valued. Roosevelt suggested, “The Government must use its resources more wisely on the part of the public because of the problem of unprofitable public sector enterprises.”
But FDR, the PWA chairwoman who would later become President-elect Bill Clinton, wrote the Economic Recovery Administration (EII) proposal to stimulate the economy by hiring and spending public sector workers to solve its growing economic problems and improve the welfare of the elderly, children and the poor. This new program would bring total employment back in 1928 to about 20 million and cover a three percent increase in unemployment rate over the next three years, it claimed.
The Federal Reserve Board’s Committee on Monetary Policy decided to implement the plan. It sent monetary policy experts to the central bank’s office in New York in May 1938—the same year the PWA proposal was enacted, at the very same time that many of the reforms to government spending and spending were being revised under the Federal Reserve Board’s supervision. The central bank’s Office of Rate Control then met with Bank of New York Governor Robert S. Furman, who called it “a great day in the history and history of the monetary system for a long time.” SAC Chairman William L. Shilts wrote in a letter to SAC chairman Eugene K. Domenici that there had been “two previous attempts to implement [the PWA] program.” SAC approved the program on its own merits, but it required the Governor to sign any such order. The Supreme Court had held that it was unconstitutional to make it the law and that Roosevelt was entitled to appeal.
Rising Income, the Great Depression’s Overvaluation of Debt and the Great Depression’s Great Depression-to-be, 1939–present
The Great Depression created a significant number of job openings in the economic recovery. This also raised overall economic growth. While the actual labor force participation rate per million persons grew from 2 percent in 1920 to 7 percent in 1941, this percentage fell to 4 percent in 1942, where it remained until the late 1980s when a decrease of less than one percentage point occurred by 1977, and even then fell precipitously thereafter; while the employment rate for every thousand people in the labor force went up by about 20 percent over the same period. Economic growth accelerated, as did other factors. The National Labor Relations Act of 1948 prohibited the use of contracts by employers to replace union leaders in the form of salary checks; the National Labor Relations Act of 1957 required employer-employee unions to use a one-time method for hiring union members.
The Economic Times: While the public didn’t see a surge in job growth from 1919 to 1927, unemployment shot up from 2.2 percent an hour in 1929 to 5.6 percent in 1932. Meanwhile, a steady increase in people’s jobs allowed job creation to continue, and wages stagnated. From 1946 to 1955, the economy grew at a rate of 3.7 percent per week, but unemployment soared to 10 percent in July 1958. Over the next 40 years, the unemployment rate averaged a whopping 14.7 percent. The federal unemployment insurance program provided relief with an estimated 1 million more workers than needed to take the country’s nation’s unemployment rate up to 10 percent. Though this rate is much lower than the federal program itself, there’s a big difference, especially in the form of the federal workers’ health benefits. Nearly all private firms in the country now are covered by this generous program, but employers have more flexibility to add, and even expand, workers over age 30 as the benefits age. The Affordable Care Act has cut the annual premium for workers 25 to 34, or those under age 40, by 28 percent, and those 65 and older now receive up to 6.1 million coverage. In all, over the next ten years, 4.3 million workers nationwide now receive health coverage for their dependents under the Affordable Care Act ($20 billion in lost benefits over that threshold for a family of four, and 1.3 million on an individual market plan).
Job Growth, Workers Compensation, Education, and the Poor
The New Deal produced the largest increase in the working population in a generation, and many of its policies created a new job market in the United States. These policies helped create a new class of workers–the middle class–that was able to take jobs in industries that had existed long before the New Deal. This class was more concentrated in New Deal areas and had much more mobility with family. These policies helped people to get the goods they needed. They also provided employment and paid wages. The “goods” weren’t available in the traditional ways that job creators had envisioned, such as in factories or mines or for restaurants—just as in the old days of the old days. To provide these new workers with skills, these new forms of work created the kind of new jobs that we know today: in manufacturing and in construction.
In the 1980’s, the minimum wage didn’t help the poor; in many cases, the job creation rate fell and the poor’s participation declined. The Federal Reserve used its “job-creation theory” to find jobs in the 1980s and 1990s but, for better or worse, neither did the Federal Reserve help or hurt the poor. Inflation also caused the wages of the middle class to rise faster and the benefits stagnated. The unemployment rate rose to nearly 16 percent after 1994. The rate of job loss was twice as high as the rate for people with incomes under $40,000. At the same time, this continued to increase the economy. The New Deal created a middle class with good skills–for better or worse–that could find jobs by making the work available for everybody. This middle caste brought up new, hard questions in the trade-off between government and the work of other professionals, from lawyers to lawyers and teachers.
How many people could get married and start a new household? One way people could buy a mortgage to help pay for the kids they were going to birth–the cost of child care that we now have now in the U.S.–