The Great Depression: The New Deal--Assessment

Figure 1.--It is true that the New Deal did not end the Depression which continued until the end of the decade when overseas war orders began to revice American industry. But it did ameliorate the impact of the Depression on many, but not all Americans. "This photograph was taken at Calipatria in California's Imperial Valley during February 1939. It was one of the Farm Security Administration (FSA) emergency migratory labor camps. The lady here was a daughter of ex-tenant farmers on thirds and fourths in cotton. She had fifty dollars when she set out. Went to Phoenix, picked cotton, pulled bolls made 80 cents a day with two people pulling bolls. Stayed until school closed. Went to Idaho, picked peas until August. Left McCall with forty dollars "in hand. Went to Cedar City and Parowan, Utah, a distance of 700 miles. Picked peas through September. Went to Hollister, California. Picked peas through October. Left Hollister for Calipatria for early peas which froze. Now receiving Farm Security Administration food grant and waiting for work to begin. "Back in Oklahoma, we are sinking. You work your head off for a crop and then see it burn up. You live in debts that you can never get out of. This isn't a good life, but I say that it's a better life than it was." Photographer: Dorothea lange.

President Roosevelt and the New Deal were extreemly controservial during the 1930s. The voters consistently retyrned him to office but by the 1938 elections were beginning to have doubts. In the aftermath of the War and the President;s untimely death, historians tended to speak lauditorily of the Nrw Deal afirming that President Roosevelt brought us out of the Depression. More recent historians have discussed the New Deal in less lauditory terms. With greater reflection it can I think, be fairly seen that it was World War II that finally ended the Depression. Some recent historians have even charged that the New Deal even prolonged the Depression. I am not entirely sure of that, but even if true it does not mean, howeve, tht the New Deal was a failure or thzt it did not have many beneficial impacts.

Critics

FDR and the New Deal had their critics in the 1930s. Early critics of the New Seal questioned its cost and inefficency. Some Republican leaders unable to compete at the polls began to charge that President Roosevely was undermining the democratic system. Led by the Liberty League, the New Deal was asualted as an attack on individual libety. FDR's effort to pack the court in particular was heavily criticized. In more recent years the New Deal has been attacked on economic grounds. Some authors charge that the New Deal actually extended the Depression. There are a variety of criticisms of the New Deal. 1) The New Deal according to some economists trippled taxes. The bulk of the taxes were excise and sales takes paid by the poor and middle class. 2) Attacks on private propert rights and attacks on "economic royalists" discourged investment. 3) The New Deal made it more expensive to hire people which discouraged hiring. Here programs like Social Security and efforts to promote union organizing (the Wagner Act) affected the cost of labor. 4) The New Deal made it more difficult to raise capital. Here the Security Exchanges Commission. 5) The New Deal destroyed food. Crops were turned over and farmers paid not to prfduce. 6) The New Deal increased the cost of goods. The New Deal had vaious progreams to control prices. The National Recovery Act (NRA) was the major effort here. 7) The New Deal broke up several of the larger banks. These were not the banks that were failing. The banks that failed were the ones not allow to diversify with branches. 8) Public works progams proved to be a drag on the economy. TVA for example did not transform the lives of Tennessee farmers, but was instead an irrational mononpoly. 9) There were frivolous anti-trust lawsuits. There was no evidence that monoplies were limiting wages and jobs. 10) Makes work programs were directed at the political swing states and not the South. WPA and other programs did not create productive jobs and as they were financded by taxes that took money out of the hands of individuals whose spending would have created jobs in the private sector. [Powell] This author contends that after the Banks were reopened the economy began to recover, but the programs of he First Hundred Days discouraged that recovery. [Powell]

Rebuttle

The New Seal critics commonly gloss over one very obsvious factor. There are periods in history that capitalism has to be saved from capitalists. There was in 1933 the very real possibility that economic depression would have resulted in if not revolution, far more profound changes than the New Deal. Men like Huey Long or Fouglas MacArthur may have even fundamentally altered the democratic system. New Deal criticics may well dismiss this as unlikely, but America was in very deep trouble by 1933 and President Roosevelt's New Deal provided aevel of hope and economic relief that ensured the survival of American democracy. The New Deal was a era of tremendous political change in America. The many New Deal programs certainly had economic costs, but also great achievements. They have to be considered individually. Some may not have been helpful. Others decidely were, both in economic and social terms. The Rural Electrification Administration (REA) had a massive possitive impact on the produtivity of the American farmer. The Civilian Conservation Corps (CCC) not only helped large numbers of unemployed youth, but provided wonderful facilities in national parks and forrests that succeeding generations of Americans have enjoyed. What the critics of the New Deal ignore is the root causes of the Depression. Here a major cause was the unfair distribution of wealth which left large numbers of Americans without purchasing power and the ability to support a growing economy. This was in large measure because there was not a ballance between labor and capital. Once labor could demand fair wages the result after the War was a tremendous expandion of the middle class in the 1940s and 50s. Much of the criticism of the New Deal is based on a modern assessment that the programs as a whole were not best suited to promote rapid economy growth. This is probably true. The New Dea did, however, preserve liberal democracy, set a more ballance relationship between labor and capital, prevent the growth of radical (Fascist and Communist) revolution, address wide-spread suffering, provide a pension system for elderly Americans, and begin a wide range of social reforms.

Sources

Powell, Jim. FDR's Folly: How Franklin D. Roosevelt and he New Deal Prolonged the Great Depression. Powell's book is a popular summary of a number of economists who have challenged prevailing opinions on the New Deal.

Created: 4:55 AM 1/6/2008
Last updated: 4:55 AM 1/6/2008