What was the New Deal?

The New Deal was a national policy created by Franklin D. Roosevelt to combat the problems of the Great Depression. FDR advocated "action, and action now" and he supported the use of the executive to implement such action.

FDR began the New Deal by implementing policies he thought would help Americans. The Home Owners' Loan Act provided mortgage relief for many Americans. The Federal Emergency Relief Administration "furnished more than $1 billion in grants to states, local areas, and private charities" (Davidson 736). He also created the Civil Works Administration, the Tennessee Valley Authority, and the Civilian Conservation Corps, programs that provided employment for over 5 million Americans. The idea behind providing relief to workers, advocated by John Maynard Keynes, held that increased spending would help the troubled economy get back to normal. During the New Deal, FDR created numerous agencies to support Keynes' philosophy.

Through the New Deal, FDR tried to prevent future depressions from occurring. FDR created the Federal Deposit Insurance Corporation (FDIC), through the Glass-Steagall Banking Act, to prevent banks from closing. He also passed the Securities Exchange Act which created a federal agency to regulate the stock market. Finally, he passed the National Recovery Administration which "established minimum prices and wages and maximum hours...[and] outlawed such practices as child labor and sweatshops" (Davidson 738).

Overall, I believe that the New Deal was a failure. The most significant consequence of the New Deal was that it provided a political environment in which anything could happen. Throughout a period of ten years, governments around the nation advocated the use of social programs and the use of public monies to combat the Great Crash and its effects. This created an environment in which businesses could not adapt which prevented them from expanding or taking risks (i.e. loans, which is what was needed for the economy to get back to normal).

In addition, the federal government passed legislation that, like today, helped only the few rather than the majority. The CWA and CCC only helped those who passed the requirements. Millions still were without jobs. The Agricultural Adjustment Agency gave loans to farmers which led to the consolidation of farms (the few were now in control of the many) and the crops that could have been sold were instead destroyed so that prices would remain high. So, while many Americans supposedly faced starvation, farmers, supported by the government, destroyed the food that could have fed them.

Davidson, James, Brian Delay, Christine Heyrman, Mark Lytle, and Michael Stoff, Nation of Nations: A Narrative History of the American Republic Volume II: Since 1865. New York: McGraw-Hill, 2008.