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New Deal

The New Deal was the name of President Franklin D. Roosevelt's legislative
agenda for rescuing the United States from the Great Depression. It was
widely believed that the depression was caused by the inherent instability
of the market and that government intervention was necessary to rationalize
and stabilize the economy.

The origins of the New Deal

The Great Depression and the elections of 1932

The Wall Street crash had ushered in a world-wide financial crisis. In the
United States between 1929 and 1933 unemployment soared from 3 percent of
the workforce to 25 percent, while manufacturing output collapsed by
one-third. Governments worldwide sought economic recovery by adopting
restrictive autarkic policies (high tariffs, import quotas, and barter
agreements) and by experimenting with new plans for their internal
economies. Britain adopted far-reaching measures in the development of a
planned national economy. In Nazi Germany economic recovery was pursued
through rearmament, conscription, and public works programs. In Mussolini's
Italy the economic controls of his corporate state were tightened. Observers
throughout the world saw in the massive program of economic planning and
state ownership of the Soviet Union what appeared to be a depression-proof
economic system and a solution to the crisis in capitalism. In the United
States, upon accepting Democratic nomination for president (July 2, 1932),
Roosevelt promised "a new deal for the American people," a phrase that has
endured as a label for his administration and its many domestic
achievements.

Origins of the New Deal

Unlike other many other world leaders in the 1930s, however, Roosevelt
entered office with no single ideology or plan for dealing with the
depression. This "new deal" would be often contradicting, pragmatic, and
experimental. What many considered incoherence of the New Deal's ideology,
however, was the presence of several competing ones, based on programs and
ideas not without precedents in the American political tradition.

The New Deal, drawing heavily on the experiences of its leaders, reflected
the ideas, and was influenced by the programs that Roosevelt and most of his
original associated had absorbed in their political youths early in the
progressive era, had absorbed while serving in the Wilson administration,
and had absorbed holding other offices in the 1920s. From the progressive
era, the New Dealers borrowed the era's opposition to monopoly and the move
toward government regulation of the economy, and were influenced by the
dispelling of age long notions that poverty was a personal moral failure
rather than a product of impersonal social and economic forces. From the
Wilson administration their ideas about government mobilization were shaped
by efforts to mobilize the economy for the Great War. And from the policy
experiments of the 1920s, New Dealers picked up ideas from efforts to
harmonize the economy by creating cooperative relationships among its
constituent elements.

The New Deal consisted of many different efforts to end the Great Depression
and reform the American economy. Most of them failed, but there were enough
successes to establish it as the most important episode of the twentieth
century in the creation of the modern American state.

The First Hundred Days

Roosevelt's ebullient public personality, conveyed through his declaration
that "the only thing we have to fear is fear itself? and "fireside chats" on
the radio did a great deal alone to help restore the nation's confidence.

The "bank holiday" and the Emergency Banking Act

The desperate economic situation, combined with the substantial Democratic
victories in the 1932 elections, gave Roosevelt unusual influence over
Congress in the first months of his administration. He used his leverage to
win rapid passage of a series of measure to prop up the tottering banking
system, reform the stock market, aid the unemployed, and induce industrial
and agricultural recovery. With the banking crisis looming and with Congress
desperate in a mood to do virtually anything the new president suggested,
Roosevelt might well have taken bold steps, such as nationalizing the
banking system. Instead, he worked to shore up the existing financial
institutions and to revive confidence in the economy.

On March 6, two days after taking office, he issued a proclamation closing
all American banks for four days until Congress could meet in a special
session. Ordinarily, such an action would cause widespread panic. But the
action created a general sense of relief. First, many states had already
closed down the banks before March 6. Second, Roosevelt astutely and
euphemistically described it as a "bank holiday." And third, the action
demonstrated that the federal government was stepping in to stop the
alarming pattern of bank failures.

Three days later, Roosevelt sent to Congress the Emergency Banking Act, a
generally conservative bill, drafted in large part by holdovers from the
Hoover administration, designed primarily to protect large banks from being
dragged down by the failing smaller ones. The bill provided for Treasury
Department inspection of all banks before they would be allowed to reopen,
for federal assistance to tottering large institutions, and for a thorough
reorganization of those in greatest difficulty. A confused and frightened
Congress passed the bill within four hours of its introduction.
Three-quarters of the banks in the Federal Reserve System reopened within
the next three days, and $1 billion in hoarded currency and gold flowed back
into them within a month. The immediate banking crisis was over.

The Economy Act

On the morning after passage of the Emergency Banking Act, Roosevelt sent to
Congress the Economy Act, which was designed to convince the public, and
moreover the business community, that the federal government was in the
hands of no radical. The act proposed to balance the federal budget by
cutting the salaries of government employees and reducing pensions to
veterans by as much as 15 percent.

Otherwise, Roosevelt warned, the nation faced a $1 billion deficit. The bill
revealed clearly what Roosevelt had always maintained: that he was at heart
as fiscally conservative as his predecessor. And, like the banking bill, it
passed through Congress almost instantly—despite heated protests by
some congressional progressives.

At least until after the Second World War, New Dealers never fully
recognized the value of government spending as a vehicle for recovery, and
their efforts along other lines never succeeded in ending the Depression.
Most economists of the era rejected this idea and favored balanced budgets.
In fact, in the 1932 presidential election, Franklin D. Roosevelt had
blasted Herbert Hoover for running a deficit, and dutifully promised he
would balance the budget if elected.

The Agricultural Adjustment Act (AAA)

The celebrated first Hundred Days of the new administration also produced a
federal program to protect American farmers from the uncertainties of the
market through subsides and production controls, the Agricultural Adjustment
Administration (Agricultural Adjustment Act), which Congress passed in May
1933. The AAA reflected the desires of leaders of various farm organizations
and Roosevelt's secretary of agriculture, Henry A. Wallace.

Relative farm incomes had been falling for decades. The AAA included
reworkings of many long-touted programs for agrarian relief, which had been
demanded for decades. The most important provision of the AAA was the
provision for crop reductions—the "domestic allotment" system of the
act, which was intended to raise prices for farm commodities. Under this
system, producers of seven basic commodities (corn, cotton, dairy products,
hogs, rice, tobacco, and wheat) would decide on production limits for their
crops. The government would then, through the AAA, tell individual farmers
how much they should plant would plant and would pay them subsides for
leaving some of their land idle. A tax on food processing would provide the
funds for the new payments. Farm prices were to be subsidized up to the
point of parity.

The most controversial component of the anti-deflationary domestic allotment
system was the large-scale destruction of existing crops and livestock to
reduce surpluses. At a time in which many families were suffering from
malnutrition and downright starvation, it was a difficult measure. However,
gross farm incomes increased by half in the first three years of the New
Deal and the relative position of farmers improved significantly for the
first time in twenty years.

The AAA was the first program on such a scale on behalf of the troubled
agricultural economy, and it established an important and long-lasting
federal role in the planning on the entire agricultural sector of the
economy.

Other initiatives

The First Hundred Days also saw the creation of a new federal regulatory
agency to oversee the stock market, the Securities and Exchange Commission
(SEC), a reform of the banking system that included a system of insurance
for deposits. But the most successful in alleviating the miseries of the
Great Depression were a series of relief measures to aid some of the 15
million unemployed Americans, among them the Civilian Conservation Corps
(CCC), the Civil Works Administration (CWA), and the Federal Emergency
Relief Administration (FERA). The early New Deal also began the Tennessee
Valley Authority (TVA), an unprecedented experiment in flood control, public
electric power, and regional planning.

Roosevelt also moved in his first days in office to put to rest one of the
divisive cultural issues of the 1920s, supporting and then signing a bill to
legalize the manufacture and sale of beer—an interim measure pending
the repeal of prohibition, for which a constitutional amendment (the
Twenty-first) was already in process. The amendment was ratified later in
1933.

The National Industrial Recovery Act (NIRA)

Roosevelt realized that these initial actions were nothing but stopgaps,
that more comprehensive government programs would be necessary. In the
roughly three years between the Great Crash and Roosevelt's First Hundred
Days, the industrial economy had been suffering from a vicious cycle of
deflation. Since 1931, the US Chamber of Commerce, then and now the voice of
the nation's organized business, had been urging the Hoover administration
to adopt an anti-deflationary scheme that would permit trade associations to
cooperate in stabilizing prices within their industries. While existing
antitrust laws clearly forbade such practices, organized business found a
receptive ear in the Roosevelt administration.

The Roosevelt administration, packed with reformers aspiring to forge all
elements of society into a cooperative unit (a reaction to the worldwide
specter of "class struggle"), was fairly amenable to the idea of cooperation
among producers. Desperate for salvation, many businesspeople even demanded
that the government enforce such trade associate agreements on pricing and
production. But the administration insisted on additional provisions that
would deal with other economic problems as well. Many, after all, remembered
that in the 1920s wages increased at a rate that was a fraction of the rate
at which productivity increased, remembering that production costs were
falling while wages were rising slowly and prices remained constant.

The Roosevelt administration, under increasing pressure to do more to
alleviate unemployment, and alarmed at the increasing militancy of the trade
union movement and the political pressures of radical, dissident challenges
as Huey Long, Father Charles E. Coughlin, and even the Communist Party,
insisted that business would have to ensure that the incomes of workers
would rise along with their prices. Against this backdrop, the product of
all these impulses and pressures the National Industrial Recovery Act
(NIRA), the most important undertaking of the first Hundred Days, which
Congress passed in June 1933.
[Image:BlueEagle.jpeg]

It guaranteed to workers of the right of collective bargaining and helped
spur major union organizing drives in major industries. And responding to
business clamor for anti-deflationary trade associate agreements, the NIRA
established the most important, but ultimately least successful provision:
the a new federal agency known as the National Recovery Administration
(NRA), which attempted to stabilize prices and wages though cooperative
"code authorities" involving government, business, and labor.

In case consumer buying power lagged behind—thereby defeating the
administration's initiatives—the NIRA created the Public Works
Administration (PWA), a major program of public works spending designed to
alleviate unemployment, and moreover to pump needed funds into the economy.

The new program was hailed at its inception as a miracle. Indeed, it had
something for everyone. Just as business leaders hailed it as the beginning
of a new era of cooperation between government and industry, labor leaders
hailed it as a "Magna Carta" for trade unions.

At the center of the NIRA was the National Recovery Administration (NRA),
headed by the flamboyant former general and businessman Hugh S. Johnson, who
sought to generate public enthusiasm for the NRA. He called on every
business establishment in the nation to accept a stopgap "blanket code": a
minimum wage of between 20 and 40 cents an hour, a maximum workweek of 35 to
40 hours, and the abolition of child labor. Johnson and Roosevelt contended
that the "blanket code" would raise consumer purchasing power and increase
employment. Social reformers were won over by the elimination of notorious,
exploitative sweatshops and the abolition of child labor. To generate
enthusiasm for the blanket code, Johnson devised a symbol—the NRA Blue
Eagle, to be proudly displayed in commercial establishments by employers who
accepted the provisions of the blanket code. Blue Eagle flags, posters, and
stickers, with the slogan "We Do Our Part," rapidly became visible in every
part of the country.

The massive mobilization behind the NRA had practical motivations: Johnson
needed extraordinary public and corporate support for enough bargaining
strength to negotiate the codes with business and labor. As the campaign was
going on, Johnson had to negotiate specific sets of codes with leaders of
the nation's major industries; the most significant of which were which were
anti-deflationary floors below which no company would lower prices or wages
and agreements on maintaining employment and production. However,
cooperation was a great burden; a firm could, after all, violate such codes
in search for a competitive advantage. In the short run, enough support
among key sectors of society was generated. Thus, in a remarkably short
time, Johnson won agreements from almost every major industry in the nation.

These and other early initiatives created broad popular support for the
Roosevelt administration and halted the rapid unraveling of the financial
system. They did not, however, end, or even significantly abate, the Great
Depression.

Roosevelt's second term

Historians on the right and left have generally been disappointed with
Roosevelt's second term. On the right, there have been charges of an
executive dictatorship since the 1930s. Since the 1960s, New Left
historians, on the other hand, have chronicled a series of missed
opportunities and inadequate responses to problems in the New Deal, which
they argue might have saved capitalism from itself, but failed to
help—and in many cases actually harmed by squandering a historic
opportunity—those groups most in need of assistance. However, the
liberal accomplishments of the 1930s can be understood only in the context
of the often-crippling, rigid constraints of the time within which the New
Deal was operating. And indeed the New Deal was not just a product of its
liberal backers, but also a product of the pressures of its conservative
opponents.

Although Roosevelt's landslide reelection in 1936 produced large Democratic
majorities in both houses of Congress and predictions, which led to
predictions of great new achievements from the president's supporters, the
administration encountered a long string of frustrations. Ambitious reform
ideas often floundered because of bureaucratic constraints, such as the
absence of a government bureaucracy with sufficient strength and expertise
to administer them.

Political constraints were crippling both in Congress and among the public
at large, where conservative inhibitions remained strong. However, the
Supreme Court would perhaps be the most formidable opponent. Several crucial
New Deal programs, moreover, violated conservative constitutional theory;
the NRA, the AAA, and others were invalidated by the Supreme Court, which
was dominated by conservatives with a narrow view of the interstate commerce
clause of the Constitution, the basis of much New Deal legislation.

In the spring of 1935, responding to the setbacks in the Court, a new
skepticism in Congress, and the growing popular clamor for more dramatic
action, the administration proposed or endorsed several important new
initiatives. The National Labor Relations Act (July 5), also know as the
Wagner Act, revived and strengthened the protections of collective
bargaining contained in the original (and now invalidated) NIRA. New relief
programs, of which the most prominent was the Works Progress Administration
(WPA), created hundreds of thousands of jobs for the unemployed. But the
most important achievement of 1935, and perhaps the New Deal as a whole, was
the Social Act (August 14), which established a system of old-age pensions,
unemployment insurance, and welfare benefits for such protected groups as
dependent children and the handicapped. It established a framework that
shaped the American welfare system through the remainder of the country.

Roosevelt, however, emboldened by the triumphs of his first term, set out in
1937 to consolidate authority within the government in ways that provoked
powerful opposition. Early in the year, he asked Congress to expand the
number of justices so as to allow him to appoint members sympathetic to his
ideas and hence tip the ideological balance of the Court. In one sense the
proposal succeeded; two of the existing justices, almost certainly in
response to the threat, switched positions and began voting to uphold New
Deal measures (West Coast Hotel Co. v. Parrish, 300 U.S. 379, March 29,
1937; N.L.R.B. v. Jones & Laughlin Steel Corporation, 301 U.S. 1, April 12,
1937) , effectively creating a liberal majority. But the "court packing
plan," as it was known, did lasting political damage to Roosevelt and was
finally rejected by Congress in July. At about the same time, the
administration proposed a plan to reorganize the executive branch in ways
that would significantly increase the president's control over the
bureaucracy. Like the Court-packing plan, executive reorganization from
those who feared a "Roosevelt dictatorship" and failed in Congress; a
watered-down version of the bill finally won passage in 1939.

The New Deal and the "broker state"

Government, labor, and business arbitration

Despite the dismal record in aiding marginal farmers and African Americans,
among others—contrasted with its often frequent generosity toward
certain business interests—the effect of the New Deal was to elevate
and strengthen new interest groups so as to allow them to compete more
effectively for the interests by having the federal government
evolve—albeit in an ad hoc, perhaps unintentional manner—into an
arbitrator in competition among all elements and classes of society, acting
as a force that could mediate when necessary to help some groups and limit
the power of others. By the end of the 1930s, American business found itself
competing for influence with an increasingly powerful labor movement, one
that was engaged in mass mobilization and sometimes militant action; with an
organized agricultural economy, due to decades of agrarian organization and
agitation dating back to the farmers associations and populist revolt of the
late nineteenth century; and with aroused consumers. The New Deal
accomplished this by creating a series of state institutions that greatly,
and permanently, expanded the role of the federal government in American
life. The government was now committed to providing at least minimal
assistance to the poor and unemployed; to protecting the rights of labor
unions; to stabilizing the banking system; to building low-income housing;
to regulating financial markets; to subsidizing agricultural production; and
to doing many other things that had not previously been federal
responsibilities.

Thus, perhaps the strongest legacy of the New Deal, in other words, was to
make the federal government a protector of interest groups and a supervisor
of competition among them. As a result of the New Deal, American political
and economic life became much more competitive than before, with workers,
farmers, consumers, and others now able to press their demands upon the
government in ways that in the past had been available only to the corporate
world. Hence the frequent description of the government the New Deal created
as the "broker state," a state brokering the competing claims of numerous
groups.

The liberal assumptions that the New Deal acted as the foe of private
business interests have been challenged. After all, in many cases New Deal
efforts were intended to enhance the position of private
entrepreneurs—especially their concerns over inflation—even, at
times, at the cost of some of the liberal reform goals that some
administration officials espoused. The New Deal also did little to enhance
the positions of some previously disadvantaged groups, but did little or
nothing for many others, especially blacks, sharecroppers, and the urban
poor.

Thus, it did not transform American capitalism in any genuinely radical way.
Except in the field of labor relations, corporate power remained nearly as
free from government regulation or control in 1945 as it had been in 1933.
But the New Deal did create the rudiments of the American welfare state,
though its many relief programs and above all through the Social Security
system. The conservative inhibitions New Dealers brought to this task
ensured that the welfare system was limited. Even the most progressive New
Dealers were somewhat great suspicions about federal power, expansive
welfare benefits, and large-scale government expenditures.

The "broker state" and marginalized interests

However, this so-called "broker state" would offer much less influence to
those groups either too weak to demand assistance or not visible enough to
arouse widespread public support. But it did lay the ground work for the
"broker state" to be expanded in the future, mostly through the work of the
next wave of liberal reform—the civil rights movement and the Great
Society—to embrace groups marginalized in the New Deal coalition,
especially racial and ethnic minorities.

The most notable group to receive much less influence than others in the
broker state was African Americans. The Roosevelt administration did not see
American blacks as a potent interest group capable of seriously challenging
the discriminatory forces against them. While the Roosevelt administration,
unlike that of the previous Democratic president—Woodrow Wilson
—did not move to increase government discrimination against African
Americans, it did relatively little to help lift the social standing of
African Americans.

To the administrations credit, Roosevelt appointed an unprecedented number
of African Americans to second-level positions in his administration,
perhaps due to the influence of his wife, Eleanor, a vocal advocate of
easing discrimination. And African Americans did benefit in significant
though limited ways from New Deal relief programs, due, in large measure, to
the efforts of Harold Ickes, who sought to ensure that such programs did not
exclude blacks. As a result, by 1936 more the vast majority were voting
Democratic; this was a stark change from 1932, just four years earlier, when
the vast majority of African Americans were voting Republican. The New Deal
thus established a political alliance between African Americans and the
Democratic Party that survives to this day.

However, Roosevelt, not viewing African Americans as a critical interest
group, believed that other matters were far more pressing than racial
discrimination. Never willing to lose the support of Southern Democrats, he
declined to support legislation making lynching while—perhaps
hypocritically—denouncing lynching in speeches. He declined to
advocate banning the poll tax. Aside from this measure he refused to use the
relief agencies to challenge local patterns of discrimination; the NRA
tolerated widespread practices of paying blacks less than whites; blacks
were largely excluded form employment at the TVA; the FHA refused to provide
mortgages to blacks moving into white neighborhoods; and the AAA was
ineffectual in protecting the interests of black sharecroppers and tenant
farmers.

The New Deal and economic relief

Deepening depression

John Maynard Keynes coined a term—"the paradox of thrift"—to
describe the deepening of the Great Depression after 1929. The paradox of
thrift indicates that when people decide to save more this may end up
causing people to save less. The increased savings (reduced spending) due to
the panic following the stock market crash of 1929 left markets saturated,
contributing to price deflation, perpetuating the Great Depression. When
people decided to save more (spend less) businesses responded by cutting
back on production and laying off workers. Businesses, cutting back on
investment spending because they were pessimistic about the future as well,
were also doing their share of causing a reduction in aggregate
expenditures, reducing their investments, setting in motion a dangerous
cycle: less investment, fewer jobs, less consumption and even less reason
for business to invest. The lower aggregate expenditures in the economy
contributed to a multiple decline in income well below full employment. The
economy may reach perfect balance, but at a cost of high unemployment and
social misery. At the lower income levels during the Great Depression
savings was much lower than before—hence, the paradox of thrift. As a
result, economists were increasingly calling for government to avoid the
pain in the first place by taking up the slack.

The New Deal and Keynesian economics

In the early 1930s, before Keynes wrote The General Theory of Employment,
Interest, and Money, he was advocating public works programs and deficits as
a way to get the British economy out of the Depression. Although Keynes
never mentions fiscal policy in The General Theory, and instead advocates
the need to socialize investments, Keynes ushered in more of a theoretical
revolution than a policy one. Keynes's basic idea was simple. In order to
keep people fully employed, governments have to run deficits when the
economy is slowing because the private sector won't invest enough. Many
politicians, however, failed to understand his idea.

As the Depression wore on, Roosevelt tried public works, farm subsidies and
other devices to restart the economy, but he never completely gave up trying
to balance the budget. As a result, unemployment remained high throughout
the New Deal years; consumption, investment, and net exports—the
pillars of economic growth—remained low. With fiscal policy, however,
government could provide the needed increased spending by decreasing taxes,
increasing government spending, increasing individuals' incomes. As
individuals incomes would increase, they would spend more. As they spent
more, the multiplier process would take over and expand the effect on the
initial spending. Expansionary fiscal policy thus involves decreasing taxes
or increasing government spending to counteract cyclical unemployment and
slow growth during a recession.

Keynes's visit to the White House in 1934 to urge Roosevelt to do more
deficit spending was a debacle. A dazed, overwhelmed Roosevelt complained to
Labor Secretary Frances Perkins, "He left a whole rigmarole of figures ...
he must be a mathematician rather than a political economist." Keynes,
equally frustrated with the encounter, later told Secretary Perkins that he
had "supposed the President was more literate, economically speaking."

The recession of 1937 and recovery

But Keynes would perhaps be vindicated. The Roosevelt administration was
under assault during Roosevelt's second term, which presided over a new dip
in the Great Depression in the fall of 1937 and continuing through most of
1938. It was, in the largest measure, a result of a premature effort by the
administration to balance the budget by reducing federal spending. The
administration reacted by launching a rhetorical campaign against monopoly
power, which was cast as the cause of the new dip. The president appointed
an aggressive new direction of the antirust division of the Justice
Department, but this effort lost its effectiveness once World War II, a far
more pressing concern, began.

But the administration's other response to the 1937 deepening of the Great
Depression had more tangible results. Ignoring the vitriolic pleas of the
Treasury Department and responding to the urgings of the converts to
Keynesian economics and others in his administration, Roosevelt embarked on
an antidote to the depression, reluctantly abandoning his efforts to balance
the budget and launching a $5 billion spending program in the spring of
1938, an effort to increase mass purchasing power. In 1938 Roosevelt thus
embraced the only new idea he had not yet tried—program put forward to
him by that that bewildering British "mathematician." Although few Americans
were much aware yet of the ideas of Keynes, the economist whose theories
would soon transform economic thought throughout much of the world, they
were gradually seeing that the spending program of 1938 was yielding
results. Roosevelt explained his program in a fireside chat in which he
finally acknowledged that it was therefore up to the government to "create
an economic upturn" by making "additions to the purchasing power of the
nation." This shift in administration policy was a huge milestone helping to
legitimize Keynesian economics. Although the New Dealers themselves did not
realize it at the time, the administration helped establish the basis for
new forms of federal fiscal policy, which would in the postwar years give
the government a series of important tools for promoting and regulating
economic growth.

World War II and the end of the Great Depression

But it was not until the US entered World War II, however, did Roosevelt try
Keynes' idea on a scale necessary to pull the nation out of the Great
Depression; Roosevelt, of course, had little choice now. Even granted the
special circumstances of war mobilization, it seemed to work exactly as
Keynes predicted, winning over even many Republicans. When the Great
Depression was brought to an end by the Second World War, business had been
reinforced by government expenditures. In 1929 federal expenditures were
only 3 percent of GDP. Between 1933 and 1939, federal expenditure tripled,
and Roosevelt's critics charged that he was turning America into a socialist
state. However, spending on the New Deal was far smaller than on the war
effort. In the first peacetime year of 1946, federal spending still amounted
to $62 billion, or 30 percent of GDP. In short, federal expenditures went
from 3 percent of GDP in 1929 to about a third in 1945. The big surprise was
just how productive America became: spending financially cured the
depression. Between 1939 and 1944 (the peak of wartime production), the
nation's output almost doubled. Consequently, unemployment
plummeted—from 14 percent in 1940 to less than 2 percent in 1943 as
the labor force grew by ten million. The war economy was not so much a
triumph of free enterprise as the result of government/business
sectionalism, of government bankrolling business. While unemployment
remained high throughout the New Deal years, consumption, investment, and
net exports—the pillars of economic growth—remained low.

It was World War II, not the New Deal, which finally ended the crisis. Nor
did the New Deal substantially alter the distribution of power within
American capitalism; and it had only a small impact on the distribution of
wealth among the population.

Conclusions: the legacies of the New Deal

Although the New Deal did not end the depression, all in all it helped to
prevent the economy from decaying further by increasing the regulatory
functions of the federal government in ways that helped stabilize previous
trouble areas of the economy: the stock market, the banking system, and
others. It also produced a new political coalition that sustained the
Democrats as the majority party in national politics for more than a
generation after its own end. Also laying the foundations for the postwar
era, Roosevelt and the New Deal helped enhance the power of the federal
government as a whole. Roosevelt also established the presidency as the
preeminent center of authority within the federal government. By creating a
large array of protections for various groups of citizens—workers,
farmers, and others—who suffered from the crisis, enabling them to
challenge the powers of the corporations, the Roosevelt administration
generated a set of political ideas—known to later generations as New
Deal liberalism—that remained a source of inspiration and controversy
for decades and that help shape the next great experiments in liberal
reform, the civil rights movement and Great Society of the 1960s.

A list of New Deal programs

The New Deal was composed of a countless number of programs, called an
"alphabet soup" by its distractors. Among the New Deal acts were the
following, most of which were passed within the first 100 days of his
administration:

   * United States Bank Holiday, 1933 -- closed all banks until they became
     certified by federal reviewers
   * Abandonment of gold standard, 1933 -- allowed more money to be put in
     circulation to create a mild inflation
   * Civilian Conservation Corps (CCC), 1933 -- employed young adults to
     perform unskilled work for the federal government
   * Tennessee Valley Authority (TVA), 1933 -- a government program that ran
     a series of dams built on the Tennessee River
   * Federal Emergency Relief Administration (FERA), 1933 -- provided
     breadlines and other aid to the unemployed
   * Agricultural Adjustment Act (AAA), 1933 -- paid farmers to not grow
     crops
   * National Recovery Act (NRA), 1933 -- created fair standards in favor of
     labor unions
   * Civil Works Administration
   * Public Works Administration (PWA), 1933 -- employeed middle-aged
     skilled workers to work on public projects, cost $4 billion
   * Federal Depositor's Insurance Corporation (FDIC) / Glass-Stegall Act --
     insures deposits in banks in order to restore public confidence in
     banks
   * Securities Act of 1933, created the Security Exchange Commission (SEC),
     1933 -- codified standards for sale and purchase of stock, required
     risk of investments to be acccurately disclosed
   * Indian Reorganization Act, 1934
   * Social Security Act (SSA), 1935 -- provided financial assistance to:
     elderly, handicapped, delinquent, unemployed; paid for by employee and
     employer payroll contributions
   * Works Progress Administration (WPA), 1935 -- a reiteration of the PWA,
     created useful work for middle-aged skilled workers
   * National Labor Relations Act (NLRA) / Wagner Act, 1935 -- granted right
     of labor unions to exist
   * Judiciary Act 1937 -- FDR requested power to appoint a new Supreme
     Court judge for every judge 70 years or older; failed to pass
   * Fair Labor Standards Act (FLSA), 1938 -- established a maximum normal
     work week of 40 hours, and a minimum pay of 40 cents/hour
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