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After the Great Depression, the United States required a speedy relief and recovery from the collapse of the economic foundation. As a result, President Roosevelt administration prioritized relief, recovery and reform of the U.S. economic foundation to ensure faster recovery and non-recurrence of an economic turmoil of such magnitude (Edsforth 145). A dominant theme in the Roosevelt’s New Deal was helping the common person underneath the economic pyramid. From Roosevelt’s perspective, the New Deal involved the use of government authority as an orderly form of self-help for people in all economic classes and regions. The New Deal refers to the numerous economic programs adopted during 1933-1936 under Roosevelt administration (Fitzgerald, Shouba, and Sluys 89). The New Deal based on 3Rs including relief of the underprivileged and unemployed; recovery of the United States economy back to normalcy; and reform of the U.S. financial system to prevent a recurrence of the depression. The New Deal resulted in a political alignment by increasing Democratic Party’s dominance during 1933-1969. As a result, the opposition of the New Deal, either entirely or parts of it, resulted in the splitting of the Republican Party. The Republicans were of the opinion that the New Deal was not friendly for business and economic growth, while some accepted the policies with the aim of increasing their efficiency. This political realignment created a New Deal Coalition and a Conservative Coalition (Scott 96). The New Deal Coalition was dominant in most U.S. presidential elections until the 1960s, while Conservative Coalition mostly controlled the Congress during 1937-1963. The New Deal ignited a revolution in the United States regarding the relationship between the citizens and the federal government.
Origins of the New Deal
The New Deal imposed significant shifts in politics and internal policies of the U.S. A notable impact of the New Deal is the increased regulation of the economy by the federal government. It also paved the way for the establishment of social programs and powerful labor unions. The impacts of the New Deal are a subject of contention for historians and economists. During 1929-1933, the unemployment rate rose from 4% to 25%, while the manufacturing output reduced by 33% (Milkis and Mileur 147). Prices reduced by 20%, resulting in debt repayments difficulties. The Great Depression imposed devastating effects on the United States. When President Roosevelt took the oath on March 4, 1933, state governors had subjected all banks in the U.S. to closure, implying that members of the public were not able to access their savings. The rate of unemployment had increased by 25% in mining and industrial sectors. There was a significant decline in farm income, by at least 50 percent, accompanied by a foreclosure of approximately 844,000 non-farm mortgages during 1930-1933 (Milkis and Mileur 125). There was fear of potential revolution and anarchy among political and business leaders. Roosevelt assumed office devoid of specific plans to addressing the devastating effects of the Great Depression. Therefore, he embarked on improvising while the Congress listened to numerous ideas.
The First New Deal (1933-1934) entailed numerous proposals by various groups except the Socialist Party. Fiscal conservatism and experimentation of several cures for economic ills were typical characteristics of the first phase. There were uneven outcomes with programs such as National Recovery Administration and the Silver Program failing in achieving their objectives. Other reforms and programs lasted for only ten years, while other remained permanently (Hamen 78). There was an upward recovery of the economy, with the first term of FDR’s presidency setting the record of the fastest GDP growth in the U.S. history. The 1937-1938 economic downturns raised concerns regarding the effectiveness of the policies in achieving its objectives. Most historians and economists agree that the benefits of the New Deal Policies outweighed their drawbacks.
The framework for the New Deal programs drew from numerous ideas suggested during early 20th century. The policies drew on anti-monopoly traditions in the U.S. politics through prominent political figures like Thomas Jefferson and Andrew Jackson (Fitzgerald, Shouba, and Sluys 189). Brandeis Louis, an Associate Justice on the Supreme Court, was an influential advisor to the proponents of the New Deal. Brandeis held the view that bigness was a negative economic force because of the waste-production and inefficiency. The leaders of successful programs like the NRA used ideas from the Woodrow Wilson administration through advocacy for policies used in mobilizing the economy after the First World War. Such policies used the experience of government expenditure and control used during 1917-1918. Other programs under the New Deal aimed at reviving the experiments proposed during the 1920s; an example is the TVA (Flynn and Polese 205). Proponents of the New Deal argued that a nationally planned economy was the most effective solution to the Great Depression. Despite this, there was vocal conservative opposition to the New Deal policies. The American Liberty League, under the leadership of conservative democrats, was the first to oppose the New Deal officially. Another opponent was the Old Right, a group that comprised of politicians, writers, and classical liberals and conservatives from both Republican and Democrat parties.
Challenges That Faced the Implementation of the New Deal
During the early months of implementing the New Deal policies, the continuing economic distress and opposition on the FDR’s policies imposed significant doubts on the effectiveness of the New Deal. The first indicator of challenges facing the New Deal was the troubles that the NRA faced when the conservative Supreme Court affirmed the agency was unauthorized. The court’s decision capsized most policy elements of the New Deal (Edsforth 78).
A combination of the Agricultural Adjustment Act (AAA) efforts and the continuing drought resulted in diminishing farm outputs causing an increase in prices. Whereas the AAA concentrated its efforts in helping commercial farmers and large landowners, it directed little efforts to the landless laborers and the tenant farmers in the rural Midwest. The dustbowl imposed devastating effects on the landless farmers, who in turn embarked on western migration towards California to seek for employment and land. The broadening of the plight of peasant farmers questioned the effectiveness of the AAA program in meeting its objectives. The Supreme Court pronounced that the AAA was unconstitutional because it enforced unlawful taxation (Hamen 74).
The second source of criticism towards the New Deal came from the American Liberty League, a group comprised of elites who proclaimed that the New Deal imposed significant restrictions on the autonomous freedoms to obtain property, and earn and save capital. The New Deal also faced significant challenges from those interest groups and individuals, who were appealing to the ignored middle and lower class populations such as Huey Long and Father Charles Coughlin (Flynn and Polese 159). They claimed that the New Deal had not done much to alleviate poverty. One of the most famous political opposition movements for the New Deal was Long Share Our Wealth program, which advocated for increased income redistribution and widened government assistance towards the poor.
The New Deal managed to overcome these challenges with the 1934 mid-term elections. Irrespective of the vocal minority nonconformists, Roosevelt dominated the presidential elections because of his charismatic leadership, increased efforts at relief, and his intimate relationship with the public. Roosevelt used radio broadcasts frequently to gather support from the public and assure them of economic recovery. An increase in Roosevelt’s popularity and the confidence of the public towards the New Deal played an integral role in approving the program after the 1934 elections. As a result, Democrats attained seats in the House and Senate (Fitzgerald, Shouba, and Sluys 147).
The Second New Deal
The assurance by the overwhelming victory of the Democrats in the midterm elections, motivated Roosevelt to implement his programs for the second chapter of the New Deal in the State of The Union Address during January 1935. FDR outlined six strategies that his administration would use to renew and intensify the policies and programs implemented under the first New Deal (Flynn and Polese 78). Some of the plans implemented under the second New Deal included a widened unemployment relief program; increased government support for the rural poor; government support for organized welfare labor; and social welfare benefits for the aged and disadvantaged persons. In addition, the administration aimed at intensifying its efforts to regulate business and finance and increase taxation among the wealthy.
The U.S. Congress enacted the Emergency Relief Appropriation Act in April 1935, which allocated $5 billion for FDR to use on the programs of his choice. The Works Progress Administration (WPA) received most of the funding. In the following eight years, WPA supplied $77 billion into the United States economy and increased its support towards the underemployed from all economic statuses and industries. An outcome of the program was a fall in the unemployment rate by 5% during the period 1935-1937, partly attributed to the efforts initiated by the WPA. In order to achieve economic regulation, Roosevelt gave the Federal Reserve Board the mandate to heighten the control of currency supply. In addition, FDR advocated for a strict implementation of the Securities Exchange Act of 1934. The Act required companies issuing stocks on the market to publish their prospectus publicly, truthfully, and in detail (Edsforth 128).
The establishment of social security benefits for the aged under the Social Security Act of 1935 was one of the permanent achievements of the Second New Deal. The passing of the Act was in response to the elderly rights movements outlined in the New Deal emphasis on the provision of social services. It is arguably evident that the best-documented achievement of the New Deal was the endorsement of the Social Security Act of 1935, which paved the way for the present day Social Security program in the United States (Milkis and Mileur 78).
Increased government support for organized labor was the next significant characteristic of the Second New Deal. Roosevelt’s administration widened its support towards unionization and collective bargaining through the enactment of the National Labour Relations Act of 1935, commonly referred to as the Wagner Act. This Act offered a foundation for collective bargaining and granted employees the right to form and join unions and participate in collective bargaining. The Act also forbade employers from interfering with the union rights. As a result, trade unions increased their membership, power and political influence by supporting the Democrats; this alliance exists in the present day political sphere. Strikes were prevalent during the 1930s with employees increasingly winning concessions (Flynn and Polese 78). This saw the establishment of the Committee for Industrial Organization under the American Federation of Labor (AFL), which later, in 1938, became the autonomous Congress of Industrial Organizations. The CIO increased its membership to at least 4 million in less than two years. The most prevailing and thriving trade unions during 1930s and 1940s were the CIO and AFL, which later merged to form AFL-CIO (Hamen 74).
Political Alignments Imposed By the New Deal
Roosevelt’s landslide victory in the 1936 presidential elections affirmed the success of his party in representing the disadvantaged and oppressed. For instance, farmers appreciated the consistent efforts initiated by Roosevelt to adopt an effective and efficient agricultural plan; urban voters and organized laborers noted the significance of FDR’s support towards union rights and efforts to address the increasing unemployment rates in the United States. Most women acknowledged that the New Deal programs and policies helped in alleviating inequality since FDR appointed the first woman in the cabinet, Frances Perkins, who was the Secretary of Labor. African Americans, the group mostly affected by the high unemployment rates, gained significantly from the New Deal policies and programs (Edsforth 45). As a result, African Americans began directing their support towards Roosevelt and the Democratic Party. The Republicans Party began losing the African American votes that it had constantly won since the late 19th century. It is apparent that the 1936 election gave birth to a new Democratic Coalition comprising of urban employees, farmers, women and African Americans. This coalition played a vital role in ensuring the FDR’s landslide victory in the 1936 election. Therefore, Roosevelt’s presidency and the New Deal resulted in political realignments to Democratic and Republic parties. As Democrats gained the support of African Americans, farmers, women and urban workers, they lost the support of the conservative Democratic stronghold from the white South. Meanwhile, the Republican Party lost its African American vote (Edsforth 147).
The End of the New Deal
Persistent political challenges hindered a further implementation of the policies and programs of the New Deal. FDR’s connection with the Court Packing Scheme was a significant downturn towards further implementation of the New Deal. Roosevelt suggested a court reform bill in the early 1937 that gave the president the permission to appoint an additional Supreme Court Justice for every existing justice over seventy years. Roosevelt asserted that the move aimed at addressing the concerns posed by the workloads of the Supreme Court justices. However, it was apparent that the bill aimed at reducing the power of the conservative Supreme Court justices, who had maintained their hostility towards the New Deal. The conservative justices had declared the AAA and NRA as unconstitutional (Edsforth 78). The senate passed the bill in July 1937. The outcome was an increased resignation of several justices resulting in a reduced resistance during the last phase of the New Deal from the Supreme Court. The Court Packing Scheme faltered the progress of the New Deal policies and programs.
The second direct factor that resulted in the slump of the Second New Deal was the failure of the programs and policies to revive the United States economy. In August 1937, the U.S. faced another depression, commonly referred to as the “Roosevelt Depression”. The further increase of unemployment rates in 1938 by 20% was an indicator of the ineffectiveness of the New Deal in reviving the economy. The ultimate obstacle towards the progress of the Second New Deal arose from the U.S. Congress due to an increasing power from FDR critics. A conservative coalition enacted legislations to reduce expenditure in relief programs and resisted further legislation advocated by the supporters of the New deal (Milkis and Mileur 149). As a result, Roosevelt suggested new reform policy measures and programs during his second tenure in office. Roosevelt did not propose new domestic programs during the 1939 State of Union Address, marking the end of the New Deal. It is apparent that the New Deal ended in 1939 due to the embarrassing Court Packing Scheme, increasing congressional resistance, and the 1937 recession.
Significance of the New Deal in the U.S. History
The permanent significance of the New Deal in the history of the United States is that it altered the relationship between the public and their government. It is arguable that the New Deal played an essential part in the founding of the present day expanded government. Before the inception of the New Deal, the expectation from the American government by its citizens was limited in terms of the impacts that government policies and programs had on the lives of common people. Despite the fact that government involvement has been in existence since the progressive era, it is evident that the level of involvement was minimal. The inception of the New Deal resulted in an increase in government involvement with its citizens. Presently, American citizens expect more from government regulation in the economy than in the period before the adoption of the New Deal. For example, Americans look forward to the government in subsidizing agriculture; they expect and demand government assistance during retirement years; and expect the government to control and regulate working conditions and hours. Such expectations from the public after the New Deal resulted in the creation of an expanded federal government (Fitzgerald, Shouba, and Sluys 135).
In relation to the present U.S. political sphere, it is evident that the New Deal is responsible for the establishment of the current Tea Party Movement. This is because an increase in government size and expenditure that began with the New Deal played a vital role in causing the Reagan Revolution of the 1980s. This is evident in the Tea Party opposition to the government policies of the present day.
Despite the fact that the New Deal did not achieve much in stimulating economic recovery, it is evident that it established a course for the U.S. in terms of controlled currency supply and Federal Reserve policies. Its significant implications in the course of U.S. history involve an alteration of the relationship between the government and public. The New Deal increased the public expectations from the government, which resulted to an expansion of the federal government. Some of the programs introduced during the New Deal are still evident in the present; such as Social Security assistance. Roosevelt’s presidency and the New Deal resulted in political realignments to both Democratic and Republic parties. As the Democrats gained the support of the African Americans, farmers, women, and urban workers, they lost the support of the conservative Democratic stronghold from the white South. Meanwhile, the Republican Party lost its African American vote.