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4. List of the "alphabet soup" New Deal agencies

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4. List of the "alphabet soup" New Deal agencies

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Click on them to see what they're all about.

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2. History.com video and article about the New Deal

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2. History.com video and article about the New Deal

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This one is not quite as good as the first video, but it's still pretty good info.

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New Deal for the American People

On March 4, 1933, during the bleakest days of the Great Depression, newly elected President Franklin D. Roosevelt delivered his first inaugural address before 100,000 people on Washington's Capitol Plaza.

"First of all," he said, "let me assert my firm belief that the only thing we have to fear is fear itself."

He promised that he would act swiftly to face the "dark realities of the moment" and assured Americans that he would "wage a war against the emergency" just as though "we were in fact invaded by a foreign foe." His speech gave many people confidence that they'd elected a man who was not afraid to take bold steps to solve the nation's problems.

Did you know? Unemployment levels in some cities reached staggering levels during the Great Depression: By 1933, Toledo, Ohio's had reached 80 percent, and nearly 90 percent of Lowell, Massachusetts, was unemployed.

The next day, Roosevelt declared a four-day bank holiday to stop people from withdrawing their money from shaky banks. On March 9, Congress passed Roosevelt's Emergency Banking Act, which reorganized the banks and closed the ones that were insolvent.

In his first " fireside chat " three days later, the president urged Americans to put their savings back in the banks, and by the end of the month almost three quarters of them had reopened.

The First Hundred Days

Roosevelt's quest to end the Great Depression was just beginning, and would ramp up in what came to be known as " The First 100 Days." Roosevelt kicked things off by asking Congress to take the first step toward ending Prohibition-one of the more divisive issues of the 1920s-by making it legal once again for Americans to buy beer. (At the end of the year, Congress ratified the 21st Amendment and ended Prohibition for good.)

In May, he signed the Tennessee Valley Authority Act into law, creating the TVA and enabling the federal government to build dams along the Tennessee River that controlled flooding and generated inexpensive hydroelectric power for the people in the region.

That same month, Congress passed a bill that paid commodity farmers (farmers who produced things like wheat, dairy products, tobacco and corn) to leave their fields fallow in order to end agricultural surpluses and boost prices.

June's National Industrial Recovery Act guaranteed that workers would have the right to unionize and bargain collectively for higher wages and better working conditions; it also suspended some antitrust laws and established a federally funded Public Works Administration.

In addition to the Agricultural Adjustment Act, the Tennessee Valley Authority Act and the National Industrial Recovery Act, Roosevelt had won passage of 12 other major laws, including the Glass-Steagall Act (an important banking bill) and the Home Owners' Loan Act, in his first 100 days in office.

Almost every American found something to be pleased about and something to complain about in this motley collection of bills, but it was clear to all that FDR was taking the "direct, vigorous" action that he'd promised in his inaugural address.

Second New Deal

Despite the best efforts of President Roosevelt and his cabinet, however, the Great Depression continued. Unemployment persisted, the economy remained unstable, farmers continued to struggle in the Dust Bowl and people grew angrier and more desperate.

So, in the spring of 1935, Roosevelt launched a second, more aggressive series of federal programs, sometimes called the Second New Deal.

In April, he created the Works Progress Administration (WPA) to provide jobs for unemployed people. WPA projects weren't allowed to compete with private industry, so they focused on building things like post offices, bridges, schools, highways and parks. The WPA also gave work to artists, writers, theater directors and musicians.

In July 1935, the National Labor Relations Act, also known as the Wagner Act, created the National Labor Relations Board to supervise union elections and prevent businesses from treating their workers unfairly. In August, FDR signed the Social Security Act of 1935, which guaranteed pensions to millions of Americans, set up a system of unemployment insurance and stipulated that the federal government would help care for dependent children and the disabled.

In 1936, while campaigning for a second term, FDR told a roaring crowd at Madison Square Garden that "The forces of 'organized money' are unanimous in their hate for me-and I welcome their hatred."

He went on: "I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match, [and] I should like to have it said of my second Administration that in it these forces have met their master."

This FDR had come a long way from his earlier repudiation of class-based politics and was promising a much more aggressive fight against the people who were profiting from the Depression-era troubles of ordinary Americans. He won the election by a landslide.

Still, the Great Depression dragged on. Workers grew more militant: In December 1936, for example, the United Auto Workers strike at a GM plant in Flint, Michigan lasted for 44 days and spread to some 150,000 autoworkers in 35 cities.

By 1937, to the dismay of most corporate leaders, some 8 million workers had joined unions and were loudly demanding their rights.

The End of the New Deal?

Meanwhile, the New Deal itself confronted one political setback after another. Arguing that they represented an unconstitutional extension of federal authority, the conservative majority on the Supreme Court had already invalidated reform initiatives like the National Recovery Administration and the Agricultural Adjustment Administration.

In order to protect his programs from further meddling, in 1937 President Roosevelt announced a plan to add enough liberal justices to the Court to neutralize the "obstructionist" conservatives.

This " Court-packing " turned out to be unnecessary-soon after they caught wind of the plan, the conservative justices started voting to uphold New Deal projects-but the episode did a good deal of public-relations damage to the administration and gave ammunition to many of the president's Congressional opponents.

That same year, the economy slipped back into a recession when the government reduced its stimulus spending. Despite this seeming vindication of New Deal policies, increasing anti-Roosevelt sentiment made it difficult for him to enact any new programs.

On December 7, 1941, the Japanese bombed Pearl Harbor and the United States entered World War II. The war effort stimulated American industry and, as a result, effectively ended the Great Depression.

The New Deal and American Politics

From 1933 until 1941, President Roosevelt's New Deal programs and policies did more than just adjust interest rates, tinker with farm subsidies and create short-term make-work programs.

They created a brand-new, if tenuous, political coalition that included white working people, African Americans and left-wing intellectuals. More women entered the workforce as Roosevelt expanded the number of secretarial roles in government. These groups rarely shared the same interests-at least, they rarely thought they did- but they did share a powerful belief that an interventionist government was good for their families, the economy and the nation.

Their coalition has splintered over time, but many of the New Deal programs that bound them together-Social Security, unemployment insurance and federal agricultural subsidies, for instance-are still with us today.

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New Deal - Programs, Social Security & FDR

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The New Deal was a series of programs and projects instituted during the Great Depression by President Franklin D. Roosevelt that aimed to restore prosperity to Americans. A Second New Deal was put in place shortly thereafter as a way to continue the country's economic recovery.

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It's okay to read.  You don't have to be scared.
If you just read the first few paragraphs, you'll learn the big ideas.

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The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938. Major federal programs and agencies, including the Civilian Conservation Corps (CCC), the Works Progress Administration (WPA), the Civil Works Administration (CWA), the Farm Security Administration (FSA), the National Industrial Recovery Act of 1933 (NIRA) and the Social Security Administration (SSA), provided support for farmers, the unemployed, youth, and the elderly. The New Deal included new constraints and safeguards on the banking industry and efforts to re-inflate the economy after prices had fallen sharply. New Deal programs included both laws passed by Congress as well as presidential executive orders during the first term of the presidency of Franklin D. Roosevelt.

The programs focused on what historians refer to as the "3 R's": relief for the unemployed and for the poor, recovery of the economy back to normal levels, and reform of the financial system to prevent a repeat depression. The New Deal produced a political realignment, making the Democratic Party the majority (as well as the party that held the White House for seven out of the nine presidential terms from 1933 to 1969) with its base in progressive ideas, the South, big city machines and the newly empowered labor unions, and various ethnic groups. The Republicans were split, with progressive Republicans in support but conservatives opposing the entire New Deal as hostile to business and economic growth. The realignment crystallized into the New Deal coalition that dominated presidential elections into the 1960s and the opposing conservative coalition largely controlled Congress in domestic affairs from 1937 to 1964.

Roosevelt was supportive of the idea of creating a progressive Democratic Party that could lure away progressives from the Republican Party. Indeed, Roosevelt had appealed to progressive Republicans for support for New Deal programs. As noted by one historian, however, there were limits "as to how far Roosevelt would go to establish a unified progressive party. He would not actively support progressive candidates in Senate and House electoral contests if the progressive was a Republican. The most notable example of this was his hands-off policy in a Pennsylvania Senate election despite an appeal by Gifford Pinchot, a prominent progressive and friend of Roosevelt, for help. Reluctant to alienate the conservative wing of the Democratic Party, Roosevelt at least made this minimal concession to party loyalty. He was willing to manage the tensions between ideology and party as long as progressives predominated in Congress and some Southern conservative Democrats were willing to trade their support for New Deal economic programs for federal tolerance of racial discrimination in the South. A prudent balancing of the conflicting demands of party and ideology at this time served the end of furthering his own reform agenda."

The First New Deal (1933-1934) dealt with the pressing banking crisis through the Emergency Banking Act and the 1933 Banking Act. The Federal Emergency Relief Administration (FERA) provided US$500 million (equivalent to $11.3 billion in 2022) for relief operations by states and cities, and the short-lived CWA gave locals money to operate make-work projects from 1933 to 1934. The Securities Act of 1933 was enacted to prevent a repeated stock market crash. The controversial work of the National Recovery Administration (NRA) was also part of the First New Deal.

The Second New Deal in 1935-1936 included the National Labor Relations Act to protect labor organizing, the Works Progress Administration (WPA) relief program (which made the federal government the largest employer in the nation), the Social Security Act and new programs to aid tenant farmers and migrant workers. The final major items of New Deal legislation were the creation of the United States Housing Authority and the FSA, which both occurred in 1937; and the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers. The FSA was also one of the oversight authorities of the Puerto Rico Reconstruction Administration, which administered relief efforts to Puerto Rican citizens affected by the Great Depression.

Roosevelt had built a New Deal coalition, but the economic downturn of 1937-1938 and the bitter split between the American Federation of Labor (AFL) and Congress of Industrial Organizations (CIO) labor unions led to major Republican gains in Congress in 1938. Conservative Republicans and Democrats in Congress joined the informal conservative coalition. By 1942-1943, they shut down relief programs such as the WPA and the CCC and blocked major progressive proposals. Noting the composition of the new Congress, one study argued

The Congress that assembled in January 1939 was quite unlike any with which Roosevelt had to contend before.

Since all Democratic losses took place in the North and the West, and particularly in states like Ohio and Pennsylvania, southerners held a much stronger position. The House contained 169 non-southern Democrats, 93 southern Democrats, 169 Republicans, and 4 third-party representatives. For the first time, Roosevelt could not form a majority without the help of some southerners or Republicans. In addition, the president had to contend with several senators who, having successfully resisted the purge, no longer owed him anything. Most observers agreed, therefore, that the president could at best hope to consolidate, but certainly not to extend, the New Deal. James Farley thought that Roosevelt's wisest course would be "to clean up odds and ends, tighten up and improve things [he] already has but not try [to] start anything new."

In any event, Farley predicted that Congress would discard much of Roosevelt's program.

As noted by another study, "the 1938 elections proved a decisive point in the consolidation of the conservative coalition in Congress. The liberal bloc in the House had been halved, and conservative Democrats had escaped 'relatively untouched'". In the House elected in 1938 there were at least 30 anti-New Deal Democrats and another 50 who were "not at all enthusiastic". In addition, "The new Senate was split about evenly between pro- and anti-New Deal factions." The Fair Labor Standards Act of 1938 was the last major New Deal legislation that Roosevelt succeeded in enacting into law before the conservative coalition won control of Congress. Though he could usually use the veto to restrain Congress, Congress could block any Roosevelt legislation it disliked.

Nonetheless, Roosevelt turned his attention to the war effort and won reelection in 1940-1944. Furthermore, the Supreme Court declared the NRA and the first version of the Agricultural Adjustment Act (AAA) unconstitutional, but the AAA was rewritten and then upheld. Republican President Dwight D. Eisenhower (1953-1961) left the New Deal largely intact, even expanding it in some areas. In the 1960s, Lyndon B. Johnson's Great Society used the New Deal as inspiration for a dramatic expansion of progressive programs, which Republican Richard Nixon generally retained. However, after 1974 the call for deregulation of the economy gained bipartisan support. The New Deal regulation of banking ( Glass-Steagall Act) lasted until it was suspended in the 1990s.

Several organizations created by New Deal programs remain active and those operating under the original names include the Federal Deposit Insurance Corporation (FDIC), the Federal Crop Insurance Corporation (FCIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest programs still in existence are the Social Security System and the Securities and Exchange Commission (SEC).

Economic collapse (1929-1933)

US annual real GDP from 1910 to 1960, with the years of the Great Depression (1929-1939) highlighted

From 1929 to 1933 manufacturing output decreased by one third, which economist Milton Friedman later called the Great Contraction. Prices fell by 20%, causing deflation that made repaying debts much harder. Unemployment in the United States increased from 4% to 25%. Additionally, one-third of all employed persons were downgraded to working part-time on much smaller paychecks. In the aggregate, almost 50% of the nation's human work-power was going unused.

Before the New Deal, USA bank deposits were not "guaranteed" by government. When thousands of banks closed, depositors temporarily lost access to their money; most of the funds were eventually restored but there was gloom and panic. The United States had no national safety net, no public unemployment insurance and no Social Security. Relief for the poor was the responsibility of families, private charity and local governments, but as conditions worsened year by year demand skyrocketed and their combined resources increasingly fell far short of demand.

The depression had psychologically devastated the nation. As Roosevelt took the oath of office at noon on March 4, 1933, all state governors had authorized bank holidays or restricted withdrawals-many Americans had little or no access to their bank accounts. Farm income had fallen by over 50% since 1929. Between 1930 and 1933, an estimated 844,000 non-farm mortgages were foreclosed on, out of a total of five million. Political and business leaders feared revolution and anarchy. Joseph P. Kennedy Sr., who remained wealthy during the Depression, recalled that "in those days I felt and said I would be willing to part with half of what I had if I could be sure of keeping, under law and order, the other half."

The phrase "New Deal" was coined by an adviser to Roosevelt, Stuart Chase, who used A New Deal as the title for an article published in the progressive magazine The New Republic a few days before Roosevelt's speech. Speechwriter Rosenman added it to his draft of FDR's speech at the last minute.

Upon accepting the 1932 Democratic nomination for president, Roosevelt promised "a new deal for the American people", saying:

First New Deal (1933-1934)

Roosevelt entered office without a specific set of plans for dealing with the Great Depression-so he improvised as Congress listened to a very wide variety of voices. Among Roosevelt's more famous advisers was an informal " Brain Trust", a group that tended to view pragmatic government intervention in the economy positively. His choice for Secretary of Labor, Frances Perkins, greatly influenced his initiatives. Her list of what her priorities would be if she took the job illustrates: "a forty-hour workweek, a minimum wage, worker's compensation, unemployment compensation, a federal law banning child labor, direct federal aid for unemployment relief, Social Security, a revitalized public employment service and health insurance".

The New Deal policies drew from many different ideas proposed earlier in the 20th century. Assistant Attorney General Thurman Arnold led efforts that hearkened back to an anti-monopoly tradition rooted in American politics by figures such as Andrew Jackson and Thomas Jefferson. Supreme Court Justice Louis Brandeis, an influential adviser to many New Dealers, argued that "bigness" (referring, presumably, to corporations) was a negative economic force, producing waste and inefficiency. However, the anti-monopoly group never had a major impact on New Deal policy. Other leaders such as Hugh S. Johnson of the NRA took ideas from the Woodrow Wilson Administration, advocating techniques used to mobilize the economy for World War I. They brought ideas and experience from the government controls and spending of 1917-1918. Other New Deal planners revived experiments suggested in the 1920s, such as the TVA. The "First New Deal" (1933-1934) encompassed the proposals offered by a wide spectrum of groups (not included was the Socialist Party, whose influence was all but destroyed). This first phase of the New Deal was also characterized by fiscal conservatism (see Economy Act, below) and experimentation with several different, sometimes contradictory, cures for economic ills.

Roosevelt created dozens of new agencies. They are traditionally and typically known to Americans by their alphabetical initials.

The First 100 Days (1933)

The American people were generally extremely dissatisfied with the crumbling economy, mass unemployment, declining wages, and profits, and especially Herbert Hoover's policies such as the Smoot-Hawley Tariff Act and the Revenue Act of 1932. Roosevelt entered office with enormous political capital. Americans of all political persuasions were demanding immediate action and Roosevelt responded with a remarkable series of new programs in the "first hundred days" of the administration, in which he met with Congress for 100 days. During those 100 days of lawmaking, Congress granted every request Roosevelt asked and passed a few programs (such as the Federal Deposit Insurance Corporation to insure bank accounts) that he opposed. Ever since, presidents have been judged against Roosevelt for what they accomplished in their first 100 days. Walter Lippmann famously noted:

The Economy Act, drafted by Budget Director Lewis Williams Douglas, was passed on March 15, 1933. The act proposed to balance the "regular" (non-emergency) federal budget by cutting the salaries of government employees and cutting pensions to veterans by fifteen percent. It saved $500 million per year and reassured deficit hawks, such as Douglas, that the new president was fiscally conservative. Roosevelt argued there were two budgets: the "regular" federal budget, which he balanced; and the emergency budget, which was needed to defeat the depression. It was imbalanced on a temporary basis.

New Dealers never accepted the Keynesian argument for government spending as a vehicle for recovery. Most economists of the era, along with Henry Morgenthau of the Treasury Department, rejected Keynesian solutions and favored balanced budgets.

At the beginning of the Great Depression, the economy was destabilized by bank failures followed by credit crunches. The initial reasons were substantial losses in investment banking, followed by bank runs. Bank runs occur when a large number of customers withdraw their deposits because they believe the bank might become insolvent. As the bank run progressed, it generated a self-fulfilling prophecy: as more people withdrew their deposits, the likelihood of default increased and this encouraged further withdrawals.

Milton Friedman and Anna Schwartz have argued that the drain of money out of the banking system caused the monetary supply to shrink, forcing the economy to likewise shrink. As credit and economic activity diminished, price deflation followed, causing further economic contraction with disastrous impact on banks. Between 1929 and 1933, 40% of all banks (9,490 out of 23,697 banks) failed. Much of the Great Depression's economic damage was caused directly by bank runs.

On March 9, 1933, Roosevelt sent to Congress the Emergency Banking Act, drafted in large part by Hoover's top advisors. The act was passed and signed into law the same day. It provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed. Three-quarters of the banks in the Federal Reserve System reopened within the next three days. Billions of dollars in hoarded currency and gold flowed back into them within a month, thus stabilizing the banking system. By the end of 1933, 4,004 small local banks were permanently closed and merged into larger banks. Their deposits totaled $3.6 billion. Depositors lost $540 million (equivalent to $12,207,609,254 in 2022) and eventually received on average 85 cents on the dollar of their deposits.

The Glass-Steagall Act limited commercial bank securities activities and affiliations between commercial banks and securities firms to regulate speculations. It also established the Federal Deposit Insurance Corporation (FDIC), which insured deposits for up to $2,500, ending the risk of runs on banks. This banking reform offered unprecedented stability because throughout the 1920s more than five hundred banks failed per year, and then it was less than ten banks per year after 1933.

Under the gold standard, the United States kept the dollar convertible to gold. The Federal Reserve would have had to execute an expansionary monetary policy to fight the deflation and to inject liquidity into the banking system to prevent it from crumbling-but lower interest rates would have led to a gold outflow. Under the gold standards, price-specie flow mechanism countries that lost gold, but nevertheless wanted to maintain the gold standard, had to permit their money supply to decrease and the domestic price level to decline ( deflation). As long as the Federal Reserve had to defend the gold parity of the dollar it had to sit idle while the banking system crumbled.

The dollar was allowed to float freely on foreign exchange markets with no guaranteed price in gold. With the passage of the Gold Reserve Act in 1934, the nominal price of gold was changed from $20.67 per troy ounce to $35. These measures enabled the Federal Reserve to increase the amount of money in circulation to the level the economy needed. Markets immediately responded well to the suspension in the hope that the decline in prices would finally end. In her essay "What ended the Great Depression?" (1992), Christina Romer argued that this policy raised industrial production by 25% until 1937 and by 50% until 1942.

Before the Wall Street Crash of 1929, securities were unregulated at the federal level. Even firms whose securities were publicly traded published no regular reports, or even worse, rather misleading reports based on arbitrarily selected data. To avoid another crash, the Securities Act of 1933 was passed. It required the disclosure of the balance sheet, profit and loss statement, and the names and compensations of corporate officers for firms whose securities were traded. Additionally, the reports had to be verified by independent auditors. In 1934, the U.S. Securities and Exchange Commission was established to regulate the stock market and prevent corporate abuses relating to corporate reporting and the sale of securities.

To prime the pump and cut unemployment, the NIRA created the Public Works Administration (PWA), a major program of public works, which organized and provided funds for the building of useful works such as government buildings, airports, hospitals, schools, roads, bridges, and dams. From 1933 to 1935, PWA spent $3.3 billion with private companies to build 34,599 projects, many of them quite large. The NIRA also contained a provision for the "construction, reconstruction, alteration, or repair under public regulation or control of low-cost housing and slum-clearance projects".

Many unemployed people were put to work under Roosevelt on a variety of government-financed public works projects, including the construction of bridges, airports, dams, post offices, hospitals, and hundreds of thousands of miles of road. Through reforestation and flood control, they reclaimed millions of hectares of soil from erosion and devastation. As noted by one authority, Roosevelt's New Deal "was literally stamped on the American landscape".

The rural U.S. was a high priority for Roosevelt and his energetic Secretary of Agriculture, Henry A. Wallace. Roosevelt believed that full economic recovery depended upon the recovery of agriculture and raising farm prices was a major tool, even though it meant higher food prices for the poor living in cities.

Many rural people lived in severe poverty, especially in the South. Major programs addressed to their needs included the Resettlement Administration (RA), the Rural Electrification Administration (REA), rural welfare projects sponsored by the WPA, National Youth Administration (NYA), Forest Service and Civilian Conservation Corps (CCC), including school lunches, building new schools, opening roads in remote areas, reforestation and purchase of marginal lands to enlarge national forests.

Roosevelt was keenly interested in farm issues and believed that true prosperity would not return until farming was prosperous. Many different programs were directed at farmers. The first 100 days produced the Farm Security Act to raise farm incomes by raising the prices farmers received, which was achieved by reducing total farm output. The Agricultural Adjustment Act created the Agricultural Adjustment Administration (AAA) in May 1933. The act reflected the demands of leaders of major farm organizations (especially the Farm Bureau) and reflected debates among Roosevelt's farm advisers such as Secretary of Agriculture Henry A. Wallace, M.L. Wilson, Rexford Tugwell and George Peek.

The AAA aimed to raise prices for commodities through artificial scarcity. The AAA used a system of domestic allotments, setting total output of corn, cotton, dairy products, hogs, rice, tobacco, and wheat. The farmers themselves had a voice in the process of using the government to benefit their incomes. The AAA paid land owners subsidies for leaving some of their land idle with funds provided by a new tax on food processing. To force up farm prices to the point of "parity", 10 million acres (40,000 km ²) of growing cotton was plowed up, bountiful crops were left to rot and six million piglets were killed and discarded.

The idea was to give farmers a "fair exchange value" for their products in relation to the general economy ("parity level"). Farm incomes and the income for the general population recovered fast since the beginning of 1933. Food prices remained still well below the 1929 peak. The AAA established an important and long-lasting federal role in the planning of the entire agricultural sector of the economy and was the first program on such a scale for the troubled agricultural economy. The original AAA targeted landowners, and therefore did not provide for any sharecroppers or tenants or farm laborers who might become unemployed.

A Gallup poll printed in The Washington Post revealed that a majority of the American public opposed the AAA. In 1936, the Supreme Court declared the AAA to be unconstitutional, stating, "a statutory plan to regulate and control agricultural production, [is] a matter beyond the powers delegated to the federal government". The AAA was replaced by a similar program that did win Court approval. Instead of paying farmers for letting fields lie barren, this program subsidized them for planting soil-enriching crops such as alfalfa that would not be sold on the market. Federal regulation of agricultural production has been modified many times since then, but together with large subsidies is still in effect.

A number of other measures affecting rural areas were introduced under Roosevelt. The Farm Credit Act of 1933 authorized farmers "to organize a nationwide system of local credit cooperatives -- production credit associations -- to make operating credit readily accessible to farmers throughout the country." The Farm Mortgage Foreclosure Act of 1934 provided for debt reduction and the redemption of foreclosed farms, and the Homestead Settler's Act of 1934 liberalized homestead residence requirements. The Farm Research Act of 1935 included various provisions such as the development of cooperative agricultural extension, and the Commodity Exchange Act of 1936 enabled "the Commodity Credit Corporation to better serve the needs of farmers in orderly marketing, and provided credit and facilities for carrying surpluses from season to season". The Farmers Mortgage Amendatory Act of 1936 authorized the Reconstruction Finance Corporation to make loans to drainage, levee, and irrigation districts, while under the Soil Conservation and Domestic Allotment Act of 1936 payments to farmers to encourage conservation were authorized. In 1937, the Water Facilities Act was enacted "to provide loans for individuals and association farm water systems in 17 Western states where drought and water shortage were familiar hardships."

The Bankhead-Jones Farm Tenant Act of 1937 was the last major New Deal legislation that concerned farming. It created the Farm Security Administration (FSA), which replaced the Resettlement Administration.

The Food Stamp Plan, a major new welfare program for urban poor, was established in 1939 to provide stamps to poor people who could use them to purchase food at retail outlets. The program ended during wartime prosperity in 1943 but was restored in 1961. It survived into the 21st century with little controversy because it was seen to benefit the urban poor, food producers, grocers, wholesalers, and farmers, so it gained support from both progressive and conservative Congressmen. In 2013, Tea Party activists in the House nonetheless tried to end the program, now known as the Supplemental Nutrition Assistance Program, while the Senate fought to preserve it.

Recovery was the effort in numerous programs to restore the economy to normal levels. By most economic indicators, this was achieved by 1937-except for unemployment, which remained stubbornly high until World War II began. Recovery was designed to help the economy bounce back from depression. Economic historians led by Price Fishback have examined the impact of New Deal spending on improving health conditions in the 114 largest cities, 1929-1937. They estimated that every additional $153,000 in relief spending (in 1935 dollars, or $1.95 million in the year 2000 dollars) was associated with a reduction of one infant death, one suicide, and 2.4 deaths from infectious diseases.

NRA "Blue Eagle" campaign

Manufacturing employment in the U.S. from 1920 to 1940[74]

Roosevelt's advisors believed that excessive competition and technical progress had led to overproduction and lowered wages and prices, which they believed lowered demand and employment ( deflation). He argued that government economic planning was necessary to remedy this. New Deal economists argued that cut-throat competition had hurt many businesses and that with prices having fallen 20% and more, "deflation" exacerbated the burden of debt and would delay recovery. They rejected a strong move in Congress to limit the workweek to 30 hours. Instead, their remedy, designed in cooperation with big business, was the National Industrial Recovery Act (NIRA). It included stimulus funds for the WPA to spend and sought to raise prices, give more bargaining power for unions (so the workers could purchase more), and reduce harmful competition.

At the center of the NIRA was the National Recovery Administration (NRA), headed by former General Hugh S. Johnson, who had been a senior economic official in World War I. Johnson called on every business establishment in the nation to accept a stopgap "blanket code": a minimum wage of between 20 and 45 cents per hour, a maximum workweek of 35-45 hours and the abolition of child labor. Johnson and Roosevelt contended that the "blanket code" would raise consumer purchasing power and increase employment. To mobilize political support for the NRA, Johnson launched the "NRA Blue Eagle" publicity campaign to boost what he called "industrial self-government". The NRA brought together leaders in each industry to design specific sets of codes for that industry-the most important provisions were anti-deflationary floors below which no company would lower prices or wages and agreements on maintaining employment and production. In a remarkably short time, the NRA announced agreements from almost every major industry in the nation. By March 1934, industrial production was 45% higher than in March 1933.

NRA Administrator Hugh Johnson was showing signs of a mental breakdown due to the extreme pressure and workload of running the National Recovery Administration. Johnson lost power in September 1934, but kept his title. Roosevelt replaced his position with a new National Industrial Recovery Board, of which Donald Richberg was named Executive Director.

On May 27, 1935, the NRA was found to be unconstitutional by a unanimous decision of the U.S. Supreme Court in the case of A.L.A. Schechter Poultry Corp. v. United States. After the end of the NRA, quotas in the oil industry were fixed by the Railroad Commission of Texas with Tom Connally's federal Hot Oil Act of 1935, which guaranteed that illegal "hot oil" would not be sold. By the time NRA ended in May 1935, well over 2 million employers accepted the new standards laid down by the NRA, which had introduced a minimum wage and an eight-hour workday, together with abolishing child labor. These standards were reintroduced by the Fair Labor Standards Act of 1938.

Historian William E. Leuchtenburg argued in 1963:

Other labor measures were carried out under the First New Deal. The Wagner-Peyser Act of 1933 established a national system of public employment offices, and the Anti-Kickback Act of 1934 "established penalties for employers on Government contracts who induce employees to return any part of pay to which they are entitled". That same year, the Railway Labor Act of 1926 was amended "to outlaw company unions and yellow dog contracts, and to provide that the majority of any craft or class of employees shall determine who shall represent them in collective bargaining". In July 1933, Secretary of Labor Frances Perkins held at the Department of Labor what was described as "a very successful conference of 16 state minimum wage boards (some of the states had minimum wage laws long before the Federal Government)". The following year she held a two-day conference on state labor legislation in which 39 states were represented. According to one study, "State officials in attendance were gratified that the U.S. Department of Labor was showing interest in their problems. They called on Perkins to make the labor legislation conferences an annual event. She did so and participated actively in them every year until she left office. The conferences continued under Labor Department auspices for another ten years, by which time they had largely accomplished their goal of improving and standardizing state labor laws and administration." As a means of institutionalizing the work she tried to achieve with these conferences, Perkins established the Division of Labor Standards (which was later redesignated a bureau) in 1934 as a service agency and informational clearinghouse for state governments and other federal agencies. Its goal was to promote (through voluntary means) improved conditions of work, and the Division "offered many services in addition to helping the states deal with administrative problems". It offered, for instance, training for factory inspectors, and drew national attention "to the area of workers' health with a series of conferences on silicosis. This wide-spread lung disease had been dramatized by the 'Gauley Bridge Disaster' in which hundreds of tunnel workers died from breathing silica-filled air. The Division also worked with unions, whose support was needed in passing labor legislation in the States."

The New Deal had an important impact on the housing field. The New Deal followed and increased President Hoover's lead-and-seek measures. The New Deal sought to stimulate the private home building industry and increase the number of individuals who owned homes. The New Deal implemented two new housing agencies: Home Owners' Loan Corporation (HOLC) and the Federal Housing Administration (FHA).

Alongside other discriminatory housing policy, this meant in practice is that Black Americans were denied federally backed mortgages locking most out of the housing market and all Americans were denied backing for any loans within black neighborhood. Lastly, for the other policies in place meant for neighborhood building projects, the federal government required they be explicitly segregated to be backed. The federal government's financial backing also required the use of racially restrictive covenants, that banned white homeowners from reselling their house to any black buyers.

HOLC set uniform national appraisal methods and simplified the mortgage process. The Federal Housing Administration (FHA) created national standards for home construction. In 1934 the Alley Dwelling Authority was established by Congress "to provide for the discontinuation of the use as dwellings of the buildings situated in alleys in the District of Columbia". That year, a National Housing Act was approved which was aimed at improving employment while making private credit available for repairing and homebuilding. In 1938 this act was amended and as noted by one study "provision was made renewing the insurance on repair loans, for insuring mortgages up to 90 percent of the value of small-owner -occupied homes, and for insuring mortgages on rental property".

Reform was based on the assumption that the depression was caused by the inherent instability of the market and that government intervention was necessary to rationalize and stabilize the economy and to balance the interests of farmers, business, and labor. Reforms targeted the causes of the depression and sought to prevent a crisis like it from happening again. In other words, this sought to financially rebuild the U.S. while ensuring not to repeat history.

Most economic historians assert that protectionist policies, culminating in the Smoot-Hawley Act of 1930, worsened the Depression. Roosevelt already spoke against the act while campaigning for president during 1932. In 1934, the Reciprocal Tariff Act was drafted by Cordell Hull. It gave the president power to negotiate bilateral, reciprocal trade agreements with other countries. The act enabled Roosevelt to liberalize American trade policy around the globe and it is widely credited with ushering in the era of liberal trade policy that persists to this day.

Second New Deal (1935-1936)

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, New Dealers passed important new initiatives. Historians refer to them as the "Second New Deal" and note that it was more progressive and more controversial than the "First New Deal" of 1933-1934.

Until 1935, only a dozen states had implemented old-age insurance, and these programs were woefully underfunded. Just one state (Wisconsin) had an insurance program. The United States was the only modern industrial country where people faced the Depression without any national system of social security. The work programs of the "First New Deal" such as CWA and FERA were designed for immediate relief, for a year or two.

The most important program of 1935, and perhaps of the New Deal itself, was the Social Security Act. It established a permanent system of universal retirement pensions ( Social Security), unemployment insurance and welfare benefits for the handicapped and needy children in families without a father present. It established the framework for the U.S. welfare system. Roosevelt insisted that it should be funded by payroll taxes rather than from the general fund - he said: "We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program".

The National Labor Relations Act of 1935, also known as the Wagner Act, finally guaranteed workers the rights to collective bargaining through unions of their own choice. The Act also established the National Labor Relations Board (NLRB) to facilitate wage agreements and to suppress the repeated labor disturbances. The Wagner Act did not compel employers to reach agreement with their employees, but it opened possibilities for American labor. The result was a tremendous growth of membership in the labor unions, especially in the mass-production sector, led by the older and larger American Federation of Labor and the new, more radical Congress of Industrial Organizations. Labor thus became a major component of the New Deal political coalition. However, the intense battle for members between the AFL and the CIO coalitions weakened labor's power.

To help agricultural labor, the 1934 Jones-Costigan Act included provisions such as the prohibition of child labor under the age of 14, limited the working hours of children aged 14-16, and the granting to the USDA "the authority to fix minimum wages, but only after holding public hearings 'at a place accessible to producers and workers'". In addition, the Act called for farmers "to pay their workers 'promptly' and 'in full' before collecting their benefit payments as a way to deal with the historic inequalities embedded in staggered payments and hold-back clauses". This Act was replaced by the 1937 Sugar Act after the Supreme Court ruled the AAA unconstitutional. In passing the Act, Congress not only followed Roosevelt's advice by continuing the previous Act's labor provisions but strengthened them. As noted by one study, the Act "once again prohibited child labor and made the 'fair, reasonable and equitable' minimum wage determinations mandatory". The Public Contracts (Walsh-Healey) Act of 1936 established labor standards on government contracts, "including minimum wages, overtime compensation for hours in excess of 8 a day or 40 a week, child and convict labor provisions, and health and safety requirements". The Anti-Strikebreaker (Byrnes) Act from that same year declared it unlawful "to transport or aid in transporting strikebreakers in interstate or foreign commerce".

The Davis-Bacon Act Amendment (Public Act 403) was approved in August 1935, "Establishing prevailing wages for mechanics and laborers employed on public buildings and public works". Under the Miller Act of 1935, as noted by one study, "every construction worker or person who furnished material on a covered contract has the right to sue the contractor or surety if not fully paid within 90 days after performing labor or furnishing such material". The Motor Carrier Act of 1935, as noted by one study, "authorized the Interstate Commerce Commission to limit the hours of service and to prescribe other measures to safeguard motor carrier employees and passengers, as well as the users of highways generally". The Merchant Marine Act of 1936 directed the Maritime Commission "to investigate and specify suitable wage and manning scales and working conditions with respect to subsidized ships". Public Act 783 of March 1936 sought to extend "the facilities of the Public Health Service to seamen on Government vessels not in the military or Naval establishments". The Railway Labor Act Amendment (Public Act 487) was approved in April 1936, "Extending protection of Railway Labor Act to employees of air transportation companies engaged in interstate and foreign commerce".

The Bituminous Coal Act of 1937 contained various labor provisions such as prohibiting "requiring an employee or applicant for employment to join a company union". A national Railroad Retirement program was introduced that year, which in 1938 also introduced unemployment benefits. The Randolph-Sheppard Act provided for "licensing of blind persons to operate vending stands in Federal buildings". Public Law No. 814 of the 74th Congress, as noted by one study, conferred jurisdiction "upon each of the several states to extend the provisions of their State workmen's compensation laws to employments on Federal property and premises located within the respective States". The National Apprenticeship Act of 1937 established standards for apprenticeship programs. The Chandler Act of 1938 allowed wage earners "to extend debt payments over longer periods of time." That same year the Interstate Commerce Commission "issued an order regulating the hours of drivers of motor vehicles engaged in interstate commerce". The Wagner-O'Day Act in 1938 set up a program "designed to increase employment opportunities for persons who are blind so they could manufacture and sell their goods to the federal government".

Various laws were also passed to advance consumer rights. In 1935 the Public Utility Holding Company Act of 1935 was passed "to protect consumers and investors from abuses by holding companies with interests in gas and electric utilities". The Federal Power Act of 1935 sought "to protect customers and to assure reasonableness in the provision of a service essential to life in modern society". The Natural Gas Act of 1938 sought protect consumers "against exploitation at the hands of natural gas companies". The Food, Drug and Cosmetic Act of 1938 granted to the Food and Drug Administration "the power to test and license drugs and to test the safety of cosmetics, and to the Department of Agriculture the authority to set food quality standards." In addition, the Wheeler-Lea Act "gave the Free Trade Commission, an old Progressive agency, the power to prohibit unfair and deceptive business acts or practices."

Roosevelt nationalized unemployment relief through the Works Progress Administration (WPA), headed by close friend Harry Hopkins. Roosevelt had insisted that the projects had to be costly in terms of labor, beneficial in the long term and the WPA was forbidden to compete with private enterprises-therefore the workers had to be paid smaller wages. The Works Progress Administration (WPA) was created to return the unemployed to the workforce. The WPA financed a variety of projects such as hospitals, schools, and roads, and employed more than 8.5 million workers who built 650,000 miles of highways and roads, 125,000 public buildings as well as bridges, reservoirs, irrigation systems, parks, playgrounds and so on.

Prominent projects were the Lincoln Tunnel, the Triborough Bridge, the LaGuardia Airport, the Overseas Highway and the San Francisco-Oakland Bay Bridge. The Rural Electrification Administration used cooperatives to bring electricity to rural areas, many of which still operate. Between 1935 and 1940, the percentage of rural homes lacking electricity fell from 90% to 40.% The National Youth Administration was another semi-autonomous WPA program for youth. Its Texas director, Lyndon B. Johnson, later used the NYA as a model for some of his Great Society programs in the 1960s. The WPA was organized by states, but New York City had its own branch Federal One, which created jobs for writers, musicians, artists and theater personnel. It became a hunting ground for conservatives searching for communist employees.

The Federal Writers' Project operated in every state, where it created a famous guide book-it also catalogued local archives and hired many writers, including Margaret Walker, Zora Neale Hurston and Anzia Yezierska, to document folklore. Other writers interviewed elderly ex-slaves and recorded their stories.

One Federal Art Project paid 162 trained woman artists on relief to paint murals or create statues for newly built post offices and courthouses. Many of these works of art can still be seen in public buildings around the country, along with murals sponsored by the Treasury Relief Art Project of the Treasury Department. During its existence, the Federal Theatre Project provided jobs for circus people, musicians, actors, artists, and playwrights, together with increasing public appreciation of the arts.

In 1935, Roosevelt called for a tax program called the Wealth Tax Act ( Revenue Act of 1935) to redistribute wealth. The bill imposed an income tax of 79% on incomes over $5 million. Since that was an extraordinarily high income in the 1930s, the highest tax rate actually covered just one individual- John D. Rockefeller. The bill was expected to raise only about $250 million in additional funds, so revenue was not the primary goal. Morgenthau called it "more or less a campaign document". In a private conversation with Raymond Moley, Roosevelt admitted that the purpose of the bill was "stealing Huey Long's thunder" by making Long's supporters of his own. At the same time, it raised the bitterness of the rich who called Roosevelt "a traitor to his class" and the wealth tax act a "soak the rich tax".

A tax called the undistributed profits tax was enacted in 1936. This time the primary purpose was revenue, since Congress had enacted the Adjusted Compensation Payment Act, calling for payments of $2 billion to World War I veterans. The bill established the persisting principle that retained corporate earnings could be taxed. Paid dividends were tax deductible by corporations. Its proponents intended the bill to replace all other corporation taxes-believing this would stimulate corporations to distribute earnings and thus put more cash and spending power in the hands of individuals. In the end, Congress watered down the bill, setting the tax rates at 7 to 27% and largely exempting small enterprises. Facing widespread and fierce criticism, the tax deduction of paid dividends was repealed in 1938.

By 1936, the term " progressive" was typically used for supporters of the New Deal and " conservative" for its opponents. Roosevelt was assisted in his endeavors by the election of a liberal Congress in 1932. According to one source "We recognize that the best liberal legislation in American history was enacted following the election of President Roosevelt and a liberal Congress in 1932. After the midterm congressional election setbacks in 1938, labor was faced with a hostile congress until 1946. Only the presidential veto prevented the enactment of reactionary anti-labor laws." In noting the composition of the Seventy-Third Congress, one study has stated: "Though much of the Democratic congressional leadership remained old-guard, southern, agrarian, and conservative, the rank-and-file Democratic majorities in both houses were largely made up of fresh, northern, urban-industrial representatives of at least potentially liberal bent. At a minimum they were impatient with inaction, and not likely to be silenced by appeals to tradition. They were, as yet, an unformed and reckoned force, one that Roosevelt might mould to his purposes of remaking his party - or one whose very strength and impetuosity might force the president's hand." As stated by another study, in regards to the gains the Democrats made in the 1932 midterm elections, "The party gained ninety seats in the house and thirteen in the Senate. Even more significant, from the standpoint of potential support for urban programs, was that non-Southern Democrats represented a working majority in the House for the first of what would be only a few times in the twentieth century. Roosevelt's political instincts mood paralleled the mood of Congress, and he sought policies to tie the party's new urban supporters into a permanent majority coalition behind the Democratic Party." As noted by another study, "President Roosevelt's extraordinary legislative accomplishments between 1933 and 1938 owed much to his personal political qualities, but ideologically favourable large partisan majorities in the House and the Senate were a prerequisite of success."

As one journal reflected in 1950

"Look back to the 1930's and you can see how winning in mid-terms years affects the kind of laws that are passed. A tremendous liberal majority was swept in with Franklin Roosevelt in 1932. In the 1934 mid-term races that liberal majority was increased. After 1936 it went even higher."

From 1934 to 1938, there existed a "pro-spender" majority in Congress (drawn from two-party, competitive, non-machine, progressive and left party districts). In the 1938 midterm election, Roosevelt and his progressive supporters lost control of Congress to the bipartisan conservative coalition. Many historians distinguish between the First New Deal (1933-1934) and a Second New Deal (1935-1936), with the second one more progressive and more controversial.

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 that continued through most of 1938. Production and profits declined sharply. Unemployment jumped from 14.3% in May 1937 to 19.0% in June 1938. The downturn could have been explained by the familiar rhythms of the business cycle, but until 1937 Roosevelt had claimed responsibility for the excellent economic performance. That backfired in the recession and the heated political atmosphere of 1937.

The U.S. reached full employment after entering World War II in December 1941. Under the special circumstances of war mobilization, massive war spending doubled the gross national product (GNP). Military Keynesianism brought full employment and federal contracts were cost-plus. Instead of competitive bidding to get lower prices, the government gave out contracts that promised to pay all the expenses plus a modest profit. Factories hired everyone they could find regardless of their lack of skills-they simplified work tasks and trained the workers, with the federal government paying all the costs. Millions of farmers left marginal operations, students quit school and housewives joined the labor force.

The emphasis was for war supplies as soon as possible, regardless of cost and inefficiencies. Industry quickly absorbed the slack in the labor force and the tables turned such that employers needed to actively and aggressively recruit workers. As the military grew, new labor sources were needed to replace the 12 million men serving in the military. Propaganda campaigns started pleading for people to work in the war factories. The barriers for married women, the old, the unskilled-and (in the North and West) the barriers for racial minorities-were lowered.

In 1929, federal expenditures accounted for only 3% of GNP. Between 1933 and 1939, federal expenditures tripled, but the national debt as a percent of GNP showed little change. Spending on the war effort quickly eclipsed spending on New Deal programs. In 1944, government spending on the war effort exceeded 40% of GNP. These controls shared broad support among labor and business, resulting in cooperation between the two groups and the U.S. government. This cooperation resulted in the government subsidizing business and labor through both direct and indirect methods.

Conservative domination of Congress during the war meant that all welfare projects and reforms had to have their approval, which was given when business supported the project. For example, the Coal Mines Inspection and Investigation Act of 1941 significantly reduced fatality rates in the coal-mining industry, saving workers' lives and company money. In terms of welfare, the New Dealers wanted benefits for everyone according to need. However, conservatives proposed benefits based on national service-especially tied to military service or working in war industries-and their approach won out.

The Servicemen's Dependents Allowance Act of 1942 provided family allowances for dependents of enlisted men. Emergency grants to states were authorized in 1942 for programs for day care for children of working mothers. In 1944, pensions were authorized for all physically or mentally helpless children of deceased veterans regardless of the age of the child at the date the claim was filed or at the time of the veteran's death, provided the child was disabled at the age of sixteen and that the disability continued to the date of the claim. The Public Health Service Act, which was passed that same year, expanded federal-state public health programs and increased the annual amount for grants for public health services.

The Emergency Maternity and Infant Care Program (EMIC), introduced in March 1943 by the Children's Bureau, provided free maternity care and medical treatment during an infant's first year for the wives and children of military personnel in the four lowest enlisted pay grades. One out of seven births was covered during its operation. EMIC paid $127 million to state health departments to cover the care of 1.2 million new mothers and their babies. The average cost of EMIC maternity cases completed was $92.49 for medical and hospital care. A striking effect was the sudden rapid decline in home births as most mothers now had paid hospital maternity care.

Under the 1943 Disabled Veterans Rehabilitation Act, vocational rehabilitation services were offered to wounded World War II veterans and some 621,000 veterans would go on to receive assistance under this program. The G.I. Bill ( Servicemen's Readjustment Act of 1944) was a landmark piece of legislation, providing 16 million returning veterans with benefits such as housing, educational and unemployment assistance and played a major role in the postwar expansion of the American middle class.

In response to the March on Washington Movement led by A. Philip Randolph, Roosevelt promulgated Executive Order 8802 in June 1941, which established the President's Committee on Fair Employment Practices (FEPC) "to receive and investigate complaints of discrimination" so that "there shall be no discrimination in the employment of workers in defense industries or government because of race, creed, color, or national origin".

In 1941, 40% of all American families lived on less than the $1,500 per year defined as necessary by the Works Progress Administration for a modest standard of living. The median income stood at $2,000 per year, and 8 million workers earned below the legal minimum. From 1939 to 1944, wages and salaries more than doubled, with overtime pay and the expansion of jobs leading to a 70% rise in average weekly earnings during the course of the war. Membership in organized labor increased by 50% between 1941 and 1945 and because the War Labor Board sought labor-management peace, new workers were encouraged to participate in the existing labor organizations, thereby receiving all the benefits of union membership such as improved working conditions, better fringe benefits, and higher wages. As noted by William H. Chafe, "with full employment, higher wages and social welfare benefits provided under government regulations, American workers experienced a level of well-being that, for many, had never occurred before". According to one study over 60% of Americans lived in poverty in 1933, and under 40% did so by 1945.

As a result of the new prosperity, consumer expenditures rose by nearly 50%, from $61.7 billion at the start of the war to $98.5 billion by 1944. Individual savings accounts climbed almost sevenfold during the course of the war. The share of total income held by the top 5% of wage earners fell from 22% to 17% while the bottom 40% increased their share of the economic pie. In addition, during the course of the war, the proportion of the American population earning less than $3,000 (in 1968 dollars) fell by half.

According to the Encyclopædia Britannica, "perhaps the greatest achievement of the New Deal was to restore faith in American democracy at a time when many people believed that the only choice left was between communism and fascism".

Analysts agree the New Deal produced a new political coalition that sustained the Democratic Party as the majority party in national politics into the 1960s. A 2013 study found, "an average increase in New Deal relief and public works spending resulted in a 5.4 percentage point increase in the 1936 Democratic voting share and a smaller amount in 1940. The estimated persistence of this shift suggests that New Deal spending increased long-term Democratic support by 2 to 2.5 percentage points. Thus, it appears that Roosevelt's early, decisive actions created long-lasting positive benefits for the Democratic party... The New Deal did play an important role in consolidating Democratic gains for at least two decades".

However, there is disagreement about whether it marked a permanent change in values. Cowie and Salvatore in 2008 argued that it was a response to Depression and did not mark a commitment to a welfare state because the U.S. has always been too individualistic. MacLean rejected the idea of a definitive political culture. She says they overemphasized individualism and ignored the enormous power that big capital wields, the Constitutional restraints on radicalism and the role of racism, antifeminism and homophobia. She warns that accepting Cowie and Salvatore's argument that conservatism's ascendancy is inevitable would dismay and discourage activists on the left. Klein responds that the New Deal did not die a natural death-it was killed off in the 1970s by a business coalition mobilized by such groups as the Business Roundtable, the Chamber of Commerce, trade organizations, conservative think tanks and decades of sustained legal and political attacks.

Historians generally agree that during Roosevelt's 12 years in office there was a dramatic increase in the power of the federal government as a whole. Roosevelt also established the presidency as the prominent center of authority within the federal government. Roosevelt created a large array of agencies protecting various groups of citizens-workers, farmers, and others-who suffered from the crisis and thus enabled them to challenge the powers of the corporations. In this way, the Roosevelt administration generated a set of political ideas-known as New Deal Progressivism-that remained a source of inspiration and controversy for decades. New Deal liberalism lay the foundation of a new consensus. Between 1940 and 1980, there was the progressive consensus about the prospects for the widespread distribution of prosperity within an expanding capitalist economy. Especially Harry S. Truman's Fair Deal and in the 1960s Lyndon B. Johnson's Great Society used the New Deal as inspiration for a dramatic expansion of progressive programs.

The New Deal's enduring appeal on voters fostered its acceptance by moderate and progressive Republicans.

A 2016 review study of the existing literature in the Journal of Economic Literature summarized the findings of the research as follows:

The studies find that public works and relief spending had state income multipliers of around one, increased consumption activity, attracted internal migration, reduced crime rates, and lowered several types of mortality. The farm programs typically aided large farm owners but eliminated opportunities for share croppers, tenants, and farm workers. The Home Owners' Loan Corporation's purchases and refinancing of troubled mortgages staved off drops in housing prices and home ownership rates at relatively low ex-post cost to taxpayers. The Reconstruction Finance Corporation's loans to banks and railroads appear to have had little positive impact, although the banks were aided when the RFC took ownership stakes.

Historians debating the New Deal have generally been divided between progressives who support it, conservatives who oppose it, and some New Left historians who complain it was too favorable to capitalism and did too little for minorities. There is consensus on only a few points, with most commentators favorable toward the CCC and hostile toward the NRA.

Consensus historians of the 1950s, such as Richard Hofstadter, according to Lary May:

[B]elieved that the prosperity and apparent class harmony of the post-World War II era reflected a return to the true Americanism rooted in liberal capitalism and the pursuit of individual opportunity that had made fundamental conflicts over resources a thing of the past. They argued that the New Deal was a conservative movement that built a welfare state, guided by experts, that saved rather than transformed liberal capitalism.

The most common arguments can be summarized as follows:

Harmful

Neutral

Beneficial

Allowed the nation to come through its greatest depression without undermining the capitalist system (Billington and Ridge)[195]

Made the capitalist system more beneficial by enacting banking and stock market regulations to avoid abuses and providing greater financial security, through, for example, the introduction of Social Security or the Federal Deposit Insurance Corporation (David M. Kennedy)[200]

Created a better balance among labor, agriculture, and industry (Billington and Ridge)[195]

Produced a more equal distribution of wealth (Billington and Ridge)[195]

Help conserve natural resources (Billington and Ridge)[195]

Permanently established the principle that the national government should take action to rehabilitate and preserve America's human resources (Billington and Ridge)[195]

National debt as gross national product climbs from 20% to 40% under President Herbert Hoover; levels off under Roosevelt; and soars during World War II from Historical States US (1976)

Julian Zelizer (2000) has argued that fiscal conservatism was a key component of the New Deal. A fiscally conservative approach was supported by Wall Street and local investors and most of the business community-mainstream academic economists believed in it as apparently did the majority of the public. Conservative southern Democrats, who favored balanced budgets and opposed new taxes, controlled Congress and its major committees. Even progressive Democrats at the time regarded balanced budgets as essential to economic stability in the long run, although they were more willing to accept short-term deficits. As Zelizer notes, public opinion polls consistently showed public opposition to deficits and debt. Throughout his terms, Roosevelt recruited fiscal conservatives to serve in his administration, most notably Lewis Douglas the Director of Budget in 1933-1934; and Henry Morgenthau Jr., Secretary of the Treasury from 1934 to 1945. They defined policy in terms of budgetary cost and tax burdens rather than needs, rights, obligations, or political benefits. Personally, Roosevelt embraced their fiscal conservatism, but politically he realized that fiscal conservatism enjoyed a strong wide base of support among voters, leading Democrats, and businessmen. On the other hand, there was enormous pressure to act and spending money on high visibility work programs with millions of paychecks a week.

Revenues were so low that borrowing was necessary (only the richest 3% paid any income tax between 1926 and 1940). Douglas, therefore, hated the relief programs, which he said reduced business confidence, threatened the government's future credit and had the "destructive psychological effects of making mendicants of self-respecting American citizens". Roosevelt was pulled toward greater spending by Hopkins and Ickes, and as the 1936 election approached he decided to gain votes by attacking big business.

Morgenthau shifted with Roosevelt, but at all times tried to inject fiscal responsibility-he deeply believed in balanced budgets, stable currency, reduction of the national debt, and the need for more private investment. The Wagner Act met Morgenthau's requirement because it strengthened the party's political base and involved no new spending. In contrast to Douglas, Morgenthau accepted Roosevelt's double budget as legitimate-that is a balanced regular budget and an "emergency" budget for agencies, like the WPA, PWA, and CCC, that would be temporary until full recovery was at hand. He fought against the veterans' bonus until Congress finally overrode Roosevelt's veto and gave out $2.2 billion in 1936. His biggest success was the new Social Security program as he managed to reverse the proposals to fund it from general revenue and insisted it be funded by new taxes on employees. It was Morgenthau who insisted on excluding farm workers and domestic servants from Social Security because workers outside industry would not be paying their way.

Roosevelt appointed an unprecedented number of African Americans to second-level positions in his administration-these appointees were collectively called the Black Cabinet. The WPA, NYA, and CCC relief programs allocated 10% of their budgets to blacks (who comprised about 10% of the total population, and 20% of the poor). They operated separate all-black units with the same pay and conditions as white units. Some leading white New Dealers, especially Eleanor Roosevelt, Harold Ickes and Aubrey Williams, worked to ensure blacks received at least 10% of welfare assistance payments. However, these benefits were small in comparison to the economic and political advantages that whites received. Most unions excluded blacks from joining and enforcement of anti-discrimination laws in the South was virtually impossible, especially since most blacks worked in hospitality and agricultural sectors.

The New Deal programs put millions of Americans immediately back to work or at least helped them to survive. The programs were not specifically targeted to alleviate the much higher unemployment rate of blacks. Some aspects of the programs were even unfavorable to blacks. The Agricultural Adjustment Acts, for example, helped farmers which were predominantly white but reduced the need of farmers to hire tenant farmers or sharecroppers which were predominantly black. Though the AAA stipulated that a farmer had to share the payments with those who worked the land, this policy was never enforced. The Farm Service Agency (FSA), a government relief agency for tenant farmers, created in 1937, made efforts to empower African Americans by appointing them to agency committees in the South. Senator James F. Byrnes of South Carolina raised opposition to the appointments because he stood for white farmers who were threatened by an agency that could organize and empower tenant farmers. Initially, the FSA stood behind their appointments, but after feeling national pressure FSA was forced to release the African Americans from their positions. The goals of the FSA were notoriously progressive and not cohesive with the southern voting elite. Some harmful New Deal measures inadvertently discriminated against blacks. Thousands of blacks were thrown out of work and replaced by whites on jobs where they were paid less than the NRA's wage minimums because some white employers considered the NRA's minimum wage "too much money for Negroes". By August 1933, blacks called the NRA the "Negro Removal Act". An NRA study found that the NIRA put 500,000 African Americans out of work.

There was no attempt whatsoever to end segregation or to increase black rights in the South, and a number of leaders that promoted the New Deal were racist and anti-semitic.

The wartime Fair Employment Practices Commission (FEPC) executive orders that forbade job discrimination against African Americans, women, and ethnic groups was a major breakthrough that brought better jobs and pay to millions of minority Americans. Historians usually treat FEPC as part of the war effort and not part of the New Deal itself.

The New Deal was racially segregated as blacks and whites rarely worked alongside each other in New Deal programs. The largest relief program by far was the WPA-it operated segregated units, as did its youth affiliate the NYA. Blacks were hired by the WPA as supervisors in the North, but of 10,000 WPA supervisors in the South only 11 were black. Historian Anthony Badger said, "New Deal programs in the South routinely discriminated against blacks and perpetuated segregation." In its first few weeks of operation, CCC camps in the North were integrated. By July 1935, practically all the camps in the United States were segregated, and blacks were strictly limited in the supervisory roles they were assigned. Kinker and Smith argue, "even the most prominent racial liberals in the New Deal did not dare to criticize Jim Crow."

Secretary of the Interior Harold Ickes was one of the Roosevelt Administration's most prominent supporters of blacks and former president of the Chicago chapter of the NAACP. In 1937, when Senator Josiah Bailey Democrat of North Carolina accused him of trying to break down segregation laws Ickes wrote him to deny that:

I think it is up to the states to work out their social problems if possible, and while I have always been interested in seeing that the Negro has a square deal, I have never dissipated my strength against the particular stone wall of segregation. I believe that wall will crumble when the Negro has brought himself to a high educational and economic status.... Moreover, while there are no segregation laws in the North, there is segregation in fact and we might as well recognize this.

Many women were employed on FERA projects run by the states with federal funds. The first New Deal program to directly assist women was the Works Progress Administration (WPA), begun in 1935. It hired single women, widows, or women with disabled or absent husbands. The WPA employed about 500,000 women and they were assigned mostly to unskilled jobs. 295,000 worked on sewing projects that made 300 million items of clothing and bedding to be given away to families on relief and to hospitals and orphanages. Women also were hired for the WPA's school lunch program. Both men and women were hired for the small but highly publicized arts programs (such as music, theater, and writing).

Roosevelt's New Deal Recovery programs focused on stabilizing the economy by creating long-term employment opportunities, decreasing agricultural supply to drive prices up, and helping homeowners pay mortgages and stay in their homes, which also kept the banks solvent. In a survey of economic historians conducted by Robert Whaples, Professor of Economics at Wake Forest University, anonymous questionnaires were sent to members of the Economic History Association. Members were asked to disagree, agree, or agree with provisos with the statement that read: "Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression". While only 6% of economic historians who worked in the history department of their universities agreed with the statement, 27% of those that work in the economics department agreed. Almost an identical percent of the two groups (21% and 22%) agreed with the statement "with provisos" (a conditional stipulation) while 74% of those who worked in the history department and 51% in the economic department disagreed with the statement outright.

Economic growth and unemployment (1933-1941)

WPA employed 2 to 3 million unemployed at unskilled labor

From 1933 to 1941, the economy expanded at an average rate of 7.7% per year. Despite high economic growth, unemployment rates fell slowly.

Keynesians: halted the collapse but lacked Keynesian deficit spending

At the beginning of the Great Depression, many economists traditionally argued against deficit spending. The fear was that government spending would "crowd out" private investment and would thus not have any effect on the economy, a proposition known as the Treasury view, but Keynesian economics rejected that view. They argued that by spending vastly more money-using fiscal policy-the government could provide the needed stimulus through the multiplier effect. Without that stimulus, business simply would not hire more people, especially the low skilled and supposedly "untrainable" men who had been unemployed for years and lost any job skill they once had. Keynes visited the White House in 1934 to urge President Roosevelt to increase deficit spending. Roosevelt afterwards complained, "he left a whole rigmarole of figures-he must be a mathematician rather than a political economist."

The New Deal tried public works, farm subsidies and other devices to reduce unemployment, but Roosevelt never completely gave up trying to balance the budget. Between 1933 and 1941, the average federal budget deficit was 3% per year. Roosevelt did not fully utilize deficit spending. The effects of federal public works spending were largely offset by Herbert Hoover's large tax increase in 1932, whose full effects for the first time were felt in 1933 and it was undercut by spending cuts, especially the Economy Act. According to Keynesians like Paul Krugman, the New Deal therefore was not as successful in the short run as it was in the long run.

Following the Keynesian consensus (that lasted until the 1970s), the traditional view was that federal deficit spending associated with the war brought full-employment output while monetary policy was just aiding the process. In this view, the New Deal did not end the Great Depression, but halted the economic collapse and ameliorated the worst of the crises.

Monetarist interpretation

Milton Friedman

More influential among economists has been the monetarist interpretation by Milton Friedman as put forth in A Monetary History of the United States, which includes a full-scale monetary history of what he calls the " Great Contraction". Friedman concentrated on the failures before 1933 and points out that between 1929 and 1932 the Federal Reserve allowed the money supply to fall by a third which is seen as the major cause that turned a normal recession into a Great Depression. Friedman especially criticized the decisions of Hoover and the Federal Reserve not to save banks going bankrupt. Friedman's arguments got an endorsement from a surprising source when Fed Governor Ben Bernanke made this statement:

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression, you're right. We did it. We're very sorry. But thanks to you, we won't do it again.

Monetarists state that the banking and monetary reforms were a necessary and sufficient response to the crises. They reject the approach of Keynesian deficit spending. In an interview in 2000, Friedman said:

Bernanke and Parkinson: cleared the way for a natural recovery

Ben Bernanke and Martin Parkinson declared in "Unemployment, Inflation, and Wages in the American Depression" (1989), "the New Deal is better characterized as having cleared the way for a natural recovery (for example, by ending deflation and rehabilitating the financial system) rather than as being the engine of recovery itself."

New Keynesian economics: crucial source of recovery

Challenging the traditional view, monetarists and New Keynesians like J. Bradford DeLong, Lawrence Summers and Christina Romer argued that recovery was essentially complete prior to 1942 and that monetary policy was the crucial source of pre-1942 recovery. The extraordinary growth in money supply beginning in 1933 lowered real interest rates and stimulated investment spending. According to Bernanke, there was also a debt-deflation effect of the depression which was clearly offset by a reflation through the growth in money supply. However, before 1992 scholars did not realize that the New Deal provided for a huge aggregate demand stimulus through a de facto easing of monetary policy. While Milton Friedman and Anna Schwartz argued in A Monetary History of the United States (1963) that the Federal Reserve System had made no attempt to increase the quantity in high-powered money and thus failed to foster recovery, they somehow did not investigate the impact of the monetary policy of the New Deal. In 1992, Christina Romer explained in "What Ended the Great Depression?" that the rapid growth in money supply beginning in 1933 can be traced back to a large unsterilized gold inflow to the U.S. which was partly due to political instability in Europe, but to a larger degree to the revaluation of gold through the Gold Reserve Act. The Roosevelt administration had chosen not to sterilize the gold inflow precisely because they hoped that the growth of money supply would stimulate the economy.

Replying to DeLong et al. in the Journal of Economic History, J. R. Vernon argues that deficit spending leading up to and during World War II still played a large part in the overall recovery, according to his study "half or more of the recovery occurred during 1941 and 1942".

According to Peter Temin, Barry Wigmore, Gauti B. Eggertsson and Christina Romer, the biggest primary impact of the New Deal on the economy and the key to recovery and to end the Great Depression was brought about by a successful management of public expectations. The thesis is based on the observation that after years of deflation and a very severe recession important economic indicators turned positive just in March 1933 when Roosevelt took office. Consumer prices turned from deflation to mild inflation, industrial production bottomed out in March 1933, investment doubled in 1933 with a turnaround in March 1933. There were no monetary forces to explain that turnaround. Money supply was still falling and short-term interest rates remained close to zero. Before March 1933, people expected a further deflation and recession so that even interest rates at zero did not stimulate investment. However, when Roosevelt announced major regime changes people began to expect inflation and an economic expansion. With those expectations, interest rates at zero began to stimulate investment just as they were expected to do. Roosevelt's fiscal and monetary policy regime change helped to make his policy objectives credible. The expectation of higher future income and higher future inflation stimulated demand and investments. The analysis suggests that the elimination of the policy dogmas of the gold standard, a balanced budget in times of crises and small government led endogenously to a large shift in expectation that accounts for about 70-80 percent of the recovery of output and prices from 1933 to 1937. If the regime change had not happened and the Hoover policy had continued, the economy would have continued its free-fall in 1933 and output would have been 30 percent lower in 1937 than in 1933.

Followers of the real business-cycle theory believe that the New Deal caused the depression to persist longer than it would otherwise have. Harold L. Cole and Lee E. Ohanian say Roosevelt's policies prolonged the depression by seven years. According to their study, the "New Deal labor and industrial policies did not lift the economy out of the Depression", but that the "New Deal policies are an important contributing factor to the persistence of the Great Depression". They claim that the New Deal "cartelization policies are a key factor behind the weak recovery". They say that the "abandonment of these policies coincided with the strong economic recovery of the 1940s". The study by Cole and Ohanian is based on a real business-cycle theory model. Laurence Seidman noted that according to the assumptions of Cole and Ohanian, the labor market clears instantaneously, which leads to the incredible conclusion that the surge in unemployment between 1929 and 1932 (before the New Deal) was in their opinion both optimal and solely based on voluntary unemployment. Additionally, Cole and Ohanian's argument does not count workers employed through New Deal programs. Such programs built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles (1,100,000 km) of roads, 1,000 airfields and employed 50,000 teachers through programs that rebuilt the country's entire rural school system.

The economic reforms were mainly intended to rescue the capitalist system by providing a more rational framework in which it could operate. The banking system was made less vulnerable. The regulation of the stock market and the prevention of some corporate abuses relating to the sale of securities and corporate reporting addressed the worst excesses. Roosevelt allowed trade unions to take their place in labor relations and created the triangular partnership between employers, employees and government.

Paul Krugman stated that the institutions built by the New Deal remain the bedrock of the United States economic stability. Against the background of the 2007-2012 global financial crisis, he explained that the financial crises would have been much worse if the New Deals Federal Deposit Insurance Corporation had not insured most bank deposits and older Americans would have felt much more insecure without Social Security. Economist Milton Friedman after 1960 attacked Social Security from a free market view stating that it had created welfare dependency.

The New Deal banking reform has weakened since the 1980s. The repeal of the Glass-Steagall Act in 1999 allowed the shadow banking system to grow rapidly. Since it was neither regulated nor covered by a financial safety net, the shadow banking system was central to the financial crisis of 2007-2008 and the subsequent Great Recession.

Though it is essentially consensus among historians and academics that the New Deal brought about a large increase in the power of the federal government, there has been some scholarly debate concerning the results of this federal expansion. Historians like Arthur M. Schlesinger and James T. Patterson have argued that the augmentation of the federal government exacerbated tensions between the federal and state governments. However, contemporaries such as Ira Katznelson have suggested that due to certain conditions on the allocation of federal funds, namely that the individual states get to control them, the federal government managed to avoid any tension with states over their rights. This is a prominent debate concerning the historiography of federalism in the United States and-as Schlesinger and Patterson have observed-the New Deal marked an era when the federal-state power balance shifted further in favor of the federal government, which heightened tensions between the two levels of government in the United States.

However, Schlesinger has disputed Katznelson's claim and has argued that the increase in the power of the federal government was perceived to come at the cost of states' rights, thereby aggravating state governments, which exacerbated federal-state tensions. Schlesinger has utilized quotes from the time to highlight this point and has observed, "the actions of the New Deal, [Ogden L.] Mills said, 'abolish the sovereignty of the States. They make of a government of limited powers one of unlimited authority over the lives of us all.'"

Moreover, Schlesinger has argued that this federal-state tension was not a one-way street and that the federal government became just as aggravated with the state governments as they did with it. State governments were often guilty of inhibiting or delaying federal policies. Whether through intentional methods, like sabotage, or unintentional ones, like simple administrative overload-either way, these problems aggravated the federal government and thus heightened federal-state tensions. Schlesinger has also noted, "students of public administration have never taken sufficient account of the capacity of lower levels of government to sabotage or defy even a masterful President."

James T. Patterson has reiterated this argument, though he observes that this increased tension can be accounted for not just from a political perspective, but from an economic one too. Patterson has argued that the tension between the federal and state governments at least partly also resulted from the economic strain under which the states had been put by the federal government's various policies and agencies. Some states were either simply unable to cope with the federal government's demand and thus refused to work with them, or admonished the economic restraints and actively decided to sabotage federal policies. This was demonstrated, Patterson has noted, with the handling of federal relief money by Ohio governor, Martin L. Davey. The case in Ohio became so detrimental to the federal government that Harry Hopkins, supervisor of the Federal Emergency Relief Administration, had to federalize Ohio relief. Although this argument differs somewhat from Schlesinger's, the source of federal-state tension remained the growth of the federal government. As Patterson has asserted, "though the record of the FERA was remarkably good-almost revolutionary-in these respects it was inevitable, given the financial requirements imposed on deficit-ridden states, that friction would develop between governors and federal officials".

In this dispute, it can be inferred that Katznelson and Schlesinger and Patterson have only disagreed on their inference of the historical evidence. While both parties have agreed that the federal government expanded and even that states had a degree of control over the allocation of federal funds, they have disputed the consequences of these claims. Katznelson has asserted that it created mutual acquiescence between the levels of government, while Schlesinger and Patterson have suggested that it provoked contempt for the state governments on the part of the federal government and vice versa, thus exacerbating their relations. In short, irrespective of the interpretation this era marked an important time in the historiography of federalism and also nevertheless provided some narrative on the legacy of federal-state relations.

The initial perception of the New Deal was mixed. On the one hand, the eyes of the world were upon the United States because many American and European democrats saw in Roosevelt's reform program a positive counterweight to the seductive powers of the two great alternative systems, communism and fascism. As the historian Isaiah Berlin wrote in 1955: "The only light in the darkness was the administration of Mr. Roosevelt and the New Deal in the United States".

By contrast, enemies of the New Deal sometimes called it "fascist", but they meant very different things. Communists denounced the New Deal in 1933 and 1934 as fascist in the sense that it was under the control of big business. They dropped that line of thought when Stalin switched to the "Popular Front" plan of cooperation with progressives.

In 1934, Roosevelt defended himself against those critics in a "fireside chat":

John Garraty wrote that the National Recovery Administration (NRA) was based on economic experiments in Nazi Germany and Fascist Italy, without establishing a totalitarian dictatorship. Contrary to that, historians such as Hawley have examined the origins of the NRA in detail, showing the main inspiration came from Senators Hugo Black and Robert F. Wagner and from American business leaders such as the Chamber of Commerce. The model for the NRA was Woodrow Wilson's War Industries Board, in which Johnson had been involved too. Historians argue that direct comparisons between Fascism and New Deal are invalid since there is no distinctive form of fascist economic organization. Gerald Feldman wrote that fascism has not contributed anything to economic thought and had no original vision of a new economic order replacing capitalism. His argument correlates with Mason's that economic factors alone are an insufficient approach to understand fascism and that decisions taken by fascists in power cannot be explained within a logical economic framework. In economic terms, both ideas were within the general tendency of the 1930s to intervene in the free market capitalist economy, at the price of its laissez-faire character, "to protect the capitalist structure endangered by endogenous crises tendencies and processes of impaired self-regulation".

Stanley Payne, a historian of fascism, examined possible fascist influences in the United States by looking at the KKK and its offshoots and movements led by Father Coughlin and Huey Long. He concluded, "the various populist, nativist, and rightist movements in the United States during the 1920s and 1930s fell distinctly short of fascism." According to Kevin Passmore, lecturer in history at Cardiff University, the failure of fascism in the United States was due to the social policies of the New Deal that channelled anti-establishment populism into the left rather than the extreme right.

In a 1968 essay, Barton J. Bernstein compiled a chronicle of missed opportunities and inadequate responses to problems. The New Deal may have saved capitalism from itself, Bernstein charged, but it had failed to help-and in many cases actually harmed-those groups most in need of assistance. In The New Deal (1967), Paul K. Conkin similarly chastised the government of the 1930s for its weak policies toward marginal farmers, for its failure to institute sufficiently progressive tax reform, and its excessive generosity toward select business interests. In 1966, Howard Zinn criticized the New Deal for working actively to actually preserve the worst evils of capitalism.

By the 1970s, progressive historians were responding with a defense of the New Deal based on numerous local and microscopic studies. Praise increasingly focused on Eleanor Roosevelt, seen as a more appropriate crusading reformer than her husband.

In a series of articles, political sociologist Theda Skocpol has emphasized the issue of " state capacity" as an often-crippling constraint. Ambitious reform ideas often failed, she argued, because of the absence of a government bureaucracy with significant strength and expertise to administer them. Other more recent works have stressed the political constraints that the New Deal encountered. Conservative skepticism about the efficacy of government was strong both in Congress and among many citizens. Thus some scholars have stressed that the New Deal was not just a product of its progressive backers, but also a product of the pressures of its conservative opponents.

Some hard-right critics in the 1930s claimed that Roosevelt was state socialist or communist, including Charles Coughlin, Elizabeth Dilling, and Gerald L. K. Smith, The accusations generally targeted the New Deal. These conspiracy theories were grouped as the "red web" or "Roosevelt Red Record", based significantly on propaganda books by Dilling. There was significant overlap between these red-baiting accusations against Roosevelt and the isolationist America First Committee. Roosevelt was concerned enough about the accusations that in a September 29, 1936 speech in Syracuse, Roosevelt officially condemned communism. Other accusations of socialism or claimed communism came from Republican representative Robert F. Rich, and senators Simeon D. Fess, and Thomas D. Schall.

The Communist Party of the United States of America (CPUSA) had been quite hostile to the New Deal until 1935, but acknowledging the danger of fascism worldwide, reversed positions and tried to form a " Popular front" with the New Dealers. The Popular Front saw a small amount of popularity and a relatively restricted level of influence, and declined with the Molotov-Ribbentrop Pact. From 1935, the head of CPUSA Earl Browder sought to avoid directly attacking the New Deal or Roosevelt. With the Soviet invasion of Poland in mid September 1939, Browder was ordered by the Comintern to adjust his position to oppose FDR, which led to disputes within the CPUSA.

During the New Deal, the communists established a network of a dozen or so members working for the government. They were low level and had a minor influence on policies. Harold Ware led the largest group which worked in the Agriculture Adjustment Administration (AAA) until Secretary of Agriculture Wallace got rid of them all in a famous purge in 1935. Ware died in 1935 and some individuals such as Alger Hiss moved to other government jobs. Other communists worked for the National Labor Relations Board (NLRB), the National Youth Administration, the Works Progress Administration, the Federal Theater Project, the Treasury and the Department of State.

The federal government commissioned a series of public murals from the artists it employed: William Gropper's Construction of a Dam (1939) is characteristic of much of the art of the 1930s, with workers seen in heroic poses, laboring in unison to complete a great public project

The Works Progress Administration subsidized artists, musicians, painters and writers on relief with a group of projects called Federal One. While the WPA program was by far the most widespread, it was preceded by three programs administered by the US Treasury which hired commercial artists at usual commissions to add murals and sculptures to federal buildings. The first of these efforts was the short-lived Public Works of Art Project, organized by Edward Bruce, an American businessman and artist. Bruce also led the Treasury Department's Section of Painting and Sculpture (later renamed the Section of Fine Arts) and the Treasury Relief Art Project (TRAP). The Resettlement Administration (RA) and Farm Security Administration (FSA) had major photography programs. The New Deal arts programs emphasized regionalism, social realism, class conflict, proletarian interpretations and audience participation. The unstoppable collective powers of common man, contrasted to the failure of individualism, was a favorite theme.

"Created Equal": Act I, Scene 3 of Spirit of 1776, Boston (Federal Theatre Project, 1935)

Many writers chose to write about the New Deal and whether they were for or against it and if it was helping the country out. Some of these writers were Ruth McKenney, Edmund Wilson and Scott Fitzgerald. Another subject that was very popular for novelists was the condition of labor. They ranged from subjects on social protest to strikes.

Under the WPA, the Federal Theatre project flourished. Countless theatre productions around the country were staged. This allowed thousands of actors and directors to be employed, among them were Orson Welles, and John Huston.

Films of the late New Deal era such as Citizen Kane (1941) ridiculed so-called "great men" while the heroism of the common man appeared in numerous movies, such as The Grapes of Wrath (1940). Thus in Frank Capra's famous films, including Mr. Smith Goes to Washington (1939), Meet John Doe (1941) and It's a Wonderful Life (1946), the common people come together to battle and overcome villains who are corrupt politicians controlled by very rich, greedy capitalists.

By contrast, there was also a smaller but influential stream of anti-New Deal art. Gutzon Borglum's sculptures on Mount Rushmore emphasized great men in history (his designs had the approval of Calvin Coolidge). Gertrude Stein and Ernest Hemingway disliked the New Deal and celebrated the autonomy of perfected written work as opposed to the New Deal idea of writing as performative labor. The Southern Agrarians celebrated premodern regionalism and opposed the TVA as a modernizing, disruptive force. Cass Gilbert, a conservative who believed architecture should reflect historic traditions and the established social order, designed the new Supreme Court building (1935). Its classical lines and small size contrasted sharply with the gargantuan modernistic federal buildings going up in the Washington Mall that he detested. Hollywood managed to synthesize liberal and conservative streams as in Busby Berkeley's Gold Digger musicals, where the storylines exalt individual autonomy while the spectacular musical numbers show abstract populations of interchangeable dancers securely contained within patterns beyond their control.

The New Deal had many programs and new agencies, most of which were universally known by their initials. Most were abolished during World War II while others remain in operation or formed into different programs. They included the following:

Federal Emergency Relief Administration (FERA): a Hoover program to create unskilled jobs for relief; expanded by Roosevelt and Harry Hopkins; replaced by WPA in 1935.

United States bank holiday, 1933: closed all banks until they became certified by federal reviewers.

Abandonment of gold standard, 1933: gold reserves no longer backed currency; still exists.

Civilian Conservation Corps (CCC), 1933-1942: employed young men to perform unskilled work in rural areas; under United States Army supervision; separate program for Native Americans.

Homeowners Loan Corporation (HOLC): helped people keep their homes, the government bought properties from the bank allowing people to pay the government instead of the banks in installments they could afford, keeping people in their homes and banks afloat.

Tennessee Valley Authority (TVA), 1933: effort to modernize very poor region (most of Tennessee), centered on dams that generated electricity on the Tennessee River; still exists.

Agricultural Adjustment Act (AAA), 1933: raised farm prices by cutting total farm output of major crops and livestock; replaced by a new AAA because the Supreme Court ruled it unconstitutional.

National Industrial Recovery Act (NIRA), 1933: industries set up codes to reduce unfair competition, raise wages and prices; ended 1935. The Supreme Court ruled the NIRA unconstitutional.

Public Works Administration (PWA), 1933: built large public works projects; used private contractors (did not directly hire unemployed). Ended 1938.

Federal Deposit Insurance Corporation (FDIC): insures bank deposits and supervises state banks; still exists.

Glass-Steagall Act: regulates investment banking; repealed 1999 (not repealed, only two provisions changed).

Securities Act of 1933, created the SEC, 1933: codified standards for sale and purchase of stock, required awareness of investments to be accurately disclosed; still exists.

FERA camp for unemployed black women, Atlanta, 1934

Civil Works Administration (CWA), 1933-1934: provided temporary jobs to millions of unemployed.

Indian Reorganization Act, 1934: moved away from assimilation; policy dropped.

Social Security Act (SSA), 1935: provided financial assistance to: elderly, handicapped, paid for by employee and employer payroll contributions; required 7 years contributions, so first payouts were in 1942; still exists.

Works Progress Administration (WPA), 1935: a national labor program for more than 2 million unemployed; created useful construction work for unskilled men; also sewing projects for women and arts projects for unemployed artists, musicians and writers; ended 1943.

National Labor Relations Act (NLRA); Wagner Act, 1935: set up the National Labor Relations Board (NLRB) to supervise labor-management relations. In the 1930s, it strongly favored labor unions. Modified by the Taft-Hartley Act (1947); still exists.

Judicial Reorganization Bill, 1937: gave the President power to appoint a new Supreme Court judge for every judge 70 years or older; failed to pass Congress.

Federal Crop Insurance Corporation (FCIC), 1938: insures crops and livestock against loss of production or revenue. Was restructured during the creation of the Risk Management Agency in 1996 but continues to exist.

Surplus Commodities Program (1936): gives away food to the poor; still exists as the Supplemental Nutrition Assistance Program.

Fair Labor Standards Act 1938: established a maximum normal work week of 44 hours and a minimum wage of 40 cents/hour and outlawed most forms of child labor, though it still exists. The working hours have been lowered to 40 over the years, and the minimum wage has climbed to $7.25.[294]

Surplus Commodities Program, 1936

"Most indexes worsened until the summer of 1932, which may be called the low point of the depression economically and psychologically". Economic indicators show the American economy reached nadir in summer 1932 to February 1933, then began recovering until the recession of 1937-1938. Thus the Federal Reserve Industrial Production Index hit its low of 52.8 on July 1, 1932, and was practically unchanged at 54.3 on March 1, 1933, but by July 1, 1933, it reached 85.5 (with 1935-39 = 100 and for comparison 2005 = 1,342). In Roosevelt's 12 years in office, the economy had an 8.5% compound annual growth of GDP, the highest growth rate in the history of any industrial country, but recovery was slow and by 1939 the gross domestic product (GDP) per adult was still 27% below trend.

Darby counts WPA workers as employed; Lebergott as unemployed

Source: Historical Statistics US (1976) series D-86; Smiley 1983

Sources & further reading

Beasley, Maurine H., Holly C. Shulman, Henry R. Beasley. The Eleanor Roosevelt Encyclopedia (2001)

Brands, H.W. Traitor to His Class: The Privileged Life and Radical Presidency of Franklin Delano Roosevelt (2008)

Charles, Searle F. Minister of Relief: Harry Hopkins and the Depression (1963)

Cohen, Adam, Nothing to Fear: FDR's Inner Circle and the Hundred Days that Created Modern America (2009)

Graham, Otis L. and Meghan Robinson Wander, eds. Franklin D. Roosevelt: His Life and Times. (1985). An encyclopedic reference. online

Ingalls, Robert P. Herbert H. Lehman and New York's Little New Deal (1975) online

McJimsey, George T. Harry Hopkins : ally of the poor and defender of Democracy (1987) online

Pederson, William D. ed. A Companion to Franklin D. Roosevelt (Blackwell Companions to American History) (2011); 35 essays by scholars; many deal with politics

Schwarz, Jordan A. Liberal: Adolf A. Berle and the vision of an American era (1987).

Sternsher, Bernard. Rexford Tugwell and the New Deal (1964) online

Economics, farms, labor and relief

Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970 (1976) part 1 online Archived January 20, 2013, at the Wayback Machine; part 2 online Archived January 20, 2013, at the Wayback Machine

Cantril, Hadley and Mildred Strunk, eds. Public Opinion, 1935-1946 (1951), massive compilation of many public opinion polls online

Carter, Susan B. et al. eds. The Historical Statistics of the United States (6 vol: Cambridge University Press, 2006); huge compilation of statistical data; online at some universities

Gallup, George Horace, ed. The Gallup Poll; Public Opinion, 1935-1971 3 vol (1972) summarizes results of each poll.

Lowitt, Richard and Maurice Beardsley, eds. One Third of a Nation: Lorena Hickock Reports on the Great Depression (1981)

Moley, Raymond. After Seven Years (1939), conservative memoir by ex-Brain Truster

Nixon, Edgar B. ed. Franklin D. Roosevelt and Foreign Affairs (3 vol 1969), covers 1933-37. 2nd series 1937-39 available on microfiche and in a 14 vol print edition at some academic libraries.

Rasmussen, Wayne D. ed Agriculture in the United States: a documentary history: vol 3: 1914-1940(Random House, 1975).

Roosevelt, Franklin D.; Rosenman, Samuel Irving, ed. The Public Papers and Addresses of Franklin D. Roosevelt (13 vol, 1938, 1945); public material only (no letters); covers 1928-1945.

Zinn, Howard, ed. New Deal Thought (1966), a compilation of primary sources.

The Living New Deal Project, a digital database of the lasting effects of the New Deal founded in the Department of Geography at the University of California, Berkeley

The Smithsonian American Art Museum's Exhibition "1934: A New Deal for Artists"

Art, Culture, and Government: The New Deal at 75. Library of Congress, American Folklife Center Documentation of March 13-14, 2008 Symposium including webcasts of presentations

Hannsgen, Greg E.and Papadimitriou, Dimitri B. Lessons from the New Deal: Did the New Deal Prolong or Worsen the Great Depression? Working Paper No. 581, The Levy Economics Institute of Bard College. October 2009.

New Deal by Alan Brinkley on History.com

Robert E. Burke Collection. 1892-1994. 60.42 cubic feet (68 boxes plus 2 oversize folders and one oversize vertical file). At the Labor Archives of Washington, University of Washington Libraries Special Collections. Contains material collected by Robert E. Burke on the New Deal from 1932 to 1959.

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The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938.

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FINAL TEST GRADE ASSIGNMENT FOR TERM TWO 

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FINAL TEST GRADE ASSIGNMENT FOR TERM TWO 

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Create a PowerPoint regarding FDR's New Deal that contains the following:
1. Title slide
2. The Great Depression explanation
3. Who was Franklin Roosevelt?
4. What was the New Deal?
5. Three of the most important New Deal programs (three separate slides) -- What did each one do? How did it work? Why was it needed?
6. Positive and negative aspects of the New Deal (Was it overall good or bad?)
7. Why is the New Deal important to learn about?
8. References

*NO PLAGIARISM OR YOU WON'T GET A GOOD GRADE.
*AT LEAST ONE PIC ON EACH SLIDE.

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1. If you watch this video, you WILL learn about the New Deal.  If you don't, you won't understand it as well.  Just sayin'.  You can't get an education without effort.

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1. If you watch this video, you WILL learn about the New Deal.  If you don't, you won't understand it as well.  Just sayin'.  You can't get an education without effort.