Everything Everywhere Daily: History, Science, Geography & More - The New Deal

Starting point is 00:00:00 In 1933, the United States was in the midst of the worst economic crisis in its history. Millions were unemployed, banks were collapsing, and Americans were losing faith in the institutions that had once promised prosperity. A newly elected president entered office promising bold action and launched an unprecedented series of experiments that would forever change the relationship between Americans and their government. Some programs succeeded, others failed, and their legacy remains controversial nearly a century later. Learn more about the new deal on this episode of Everything Everywhere Daily. Visit BetMGM Casino and check out the newest exclusive.

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Starting point is 00:01:42 Let your morning change you. Discover Coffee Plus on Nispresso.com. The prosperity of the 1920s fueled optimism across the United States, as renters became owners and millions of people bought their first car. Stock prices soared throughout the decade, doubling in value in just five years and encouraging more people to invest in the market to build wealth. However, everything changed when the stock market crashed on October 24th, 1929,

Starting point is 00:02:12 a day known as Black Thursday. prices fell so fast that the tickers lagged hours behind the torrent of sales on the stock market. The New York Times characterized the damage from the sell-off the following week as a nationwide stampede to unload. The same general electric stock that had sold for $400 the previous week had been cut in half by Tuesday, October 29th. What began with the stock market's collapse turned into a full-blown economic depression by 1930. Despite optimism that markets would recover and stock prices would improve, they didn't. General Electric stock, which peaked at $400, traded for less than $10 by 1932. Between 1929 and 1933, the nation's nominal gross national product fell by more than half,

Starting point is 00:03:03 while unemployment climbed from approximately 3% to 25%. As the economy cratered during his presidency, Herbert Hoarets, Hoover expanded federal intervention, but remained reluctant to provide direct federal relief to individuals, preferring voluntary cooperation, local assistance, and programs designed to stabilize businesses and financial institutions. Hoover viewed the economic downturn as a temporary blip. These cycles had long been a part of American history, and he pointed to a two-quarter decline in 1921 to try to build confidence and to obscure the disaster's true scale. Hoover's solution largely focused on persuading bankers and business leaders not to cut wages or jobs,

Starting point is 00:03:47 but the promises he secured from business leaders not to lay off workers collapsed as revenues plummeted. The Federal Reserve initially eased credit after the 1929 stock market crash, but its failure to prevent a severe contraction in the money supply contributed to the Depression getting even worse. Efforts to control shipping and power prices and to encourage widespread commitments from state governments to ramp up public works projects all failed. Hoover responded with more federal intervention than any previous president, but his actions fell short of halting the disaster. As his popularity plummeted, in 1931, Herbert Hoover reportedly asked Treasury Secretary Andrew Mellon for a nickel to call his friend. Mellon supposedly flipped him a dime and said, quote, here's a dime, call both of them.

Starting point is 00:04:35 Hoover was well-intentioned, but his name became a synonym for the Depression. His opponent in the 1932 presidential election, the Democratic governor of New York, Franklin Delano Roosevelt, offered little in the way of specifics on how to solve the crisis, but he spoke with optimism and charisma. His true genius lay in his ability to build a coalition and bring people together, and he would need that skill to launch what he called the New Deal, an ambitious program that he had promised on the campaign trail. After he accepted his party's nomination for president,

Starting point is 00:05:10 Roosevelt promised, quote, I pledge you, I pledge myself, to a new deal for the American people. The new deal was vague, but it reflected Roosevelt's belief that government's purpose was to serve a central role in times of great crisis. Roosevelt won in a landslide in the 1932 election, carrying 42 of 48 states. He got right to work on calming the nation in his inaugural address on March 4, 1933, when he said, quote, the only thing we have to fear is fear itself. Throughout the address, Roosevelt called for action. The speech initiated a period known as the

Starting point is 00:05:50 100-day's initiative that created much of the early New Deal framework. The vision that became the New Deal grew out of long-term collaboration amongst business and political leaders from both parties, as well as academics and intellectuals. Through this collaboration, Roosevelt's program ultimately rested on three pillars, relief, recovery, and reform. The relief initiatives were emergency measures designed to feed the starving and put wages into pockets through public works, stopping the spread of homelessness. The recovery initiatives tried to restart the economy and stabilize industry.

Starting point is 00:06:24 And the reform programs were safeguards meant to prevent future economic collapse. Roosevelt's first target was the banking crisis. He immediately decreed a one-week bank holiday, halting bank runs and allowing banks to stay afloat. During the recess, Congress rushed through the Emergency Banking Act, instituting institutional inspections designed to restore public trust in banks. Roosevelt drove the point home in his first fireside chat, using the radio to speak directly to Americans and rally support for his programs. The administration then followed up with the Glass Stigle Act, which reshaped American finance by creating the Federal Deposit Insurance Corporation to protect everyday savings. The Agricultural Adjustment Act was one of the New Deal's most successful programs.

Starting point is 00:07:13 The program sought to bring desperately needed relief to farmers. Farmers had lost their purchasing power as prices dropped and markets for their crops evaporated. The Agricultural Adjustment Act of 1933 was part of a broader farmer. relief law that combine measures to raise agricultural prices with provisions addressing farm debt and emergency financing. The most controversial part of the bill paid farmers to reduce their output, as reduced supplies would increase crop prices. Farmers struggled to accept the program as being paid to not produce was counter to everything they had ever known. It was also difficult to accept that a solution to starvation involved destroying milk, especially during a time when people were

Starting point is 00:07:56 so desperately in need of it. Perhaps the most popular long-term program was the Tennessee Valley Authority. The Tennessee Valley Authority or TVA was established in 1933 to develop the Tennessee River watershed through flood control, improved navigation, and hydroelectric power generation, bringing electricity and economic development to a region spanning portions of seven states. Before the TVA, much of the region was without electricity and lacked many modern conveniences. At a time when government assistance was associated with Marxism, work programs that built public works were actually wildly popular. The Civilian Conservation Corps checked all the boxes, and as a bonus, satisfied Roosevelt's longstanding interest in conservation. The program put jobless young men to work transforming public land, focusing on national parks, public forests, and flood control projects.

Starting point is 00:08:51 With an original budget for only a quarter million workers, the program endured until the start of World War II and served a total of nearly 3 million men. Over its lifetime, the Civilian Conservation Corps contributed to major projects such as Skyline Drive in Shenandoah National Park and the construction of the Red Rocks Amphitheater in Colorado, while also building trails and improving facilities throughout America's national parks. They also planted more than 3 billion trees. Through the Civilian Conservation Corps and its companion programs, the Works Project Administration, Civilian Works Administration, and Public Works Administration, the government provided an estimated 15 million jobs to struggling workers during the New Deal. Roosevelt saved the boldest initiative for the end of his first 100 days when he unveiled

Starting point is 00:09:43 the National Industry Recovery Act. The NIRA sought to stabilize the private sector by raising prices, regulating production, improving wages and reducing competition between businesses. Congress authorized the nation's leading industrialists from across multiple industries to collude to devise codes for fair competition, encouraging them to set standard pricing and organized market share. The NIRA, of course, immediately faced intense scrutiny as many saw in it the centralized economic planning of a Marxist economy. The legislation also delivered a major victory for organized labor by establishing minimum wages and maximum working hours, while affirming the legality of unions and collective

Starting point is 00:10:27 bargaining, goals which labor had been fighting for since the end of the Civil War. Despite all the new programs, progress in turning the economy around was extremely slow. Success was limited, with occasional glimmers of hope, but long-term solutions seemed out of reach. By 1934, the public grew weary of the lack of progress. The expanding agricultural crisis unfolding on the Great Plains during the Dust Bowl, created demands for even more action. Radical opposition to Roosevelt began to emerge, which spurred him into action during a period known as the second 100 days, which began in 1935. Francis Townsend, a physician from Long Beach, California, developed what he called an old age revolving pension. Townsend believed this program

Starting point is 00:11:14 could provide security for older Americans while also stimulating the overall economy. Under Townsend's planned, every person aged 60 or older who had retired would receive a $200 check each month. To receive the next month's payment, they would have to spend the previous month's payment in full. Townsend hoped to turn America's over-60 population into an army of consumers who would retire earlier and pave the way for a younger workforce. The movement gained significant traction and eventually prompted Roosevelt to push for the passage of the social, Security Act of 1935, which ended up becoming the largest government program in American history. Roosevelt's version of social insurance differed from Townsend's proposal because the Social Security Act established an old age insurance system for covered workers, financed by payroll taxes

Starting point is 00:12:08 paid by both employees and employers. But the program didn't stop there. It also contained provisions to provide direct relief to the impoverished and mothers of dependent children. To combat joblessness on a massive scale, the Works Project Administration put millions of Americans back to work on vital public infrastructure, while its innovative cultural projects employed writers, actors, and artists. The program left a lasting legacy still visible today. New Deal Public Works funding helped construct the Tri-Burro Bridge in LaGuardia Airport, New York, the San Antonio Riverwalk, and Florida's overseas highway connecting Key West to the mainland. Beyond the impact of its alphabet suit programs, many of which were ultimately retired, the New Deal permanently reshaped

Starting point is 00:12:55 the role of the American government. While the New Deal was largely popular and resulted in the re-election of Roosevelt in both 1936 and 1940, it didn't end the Great Depression. In 1937 and 1938, the economy actually contracted again, and unemployment returned to approximately 20%. It was the massive expansion of wartime production, beginning with orders from European countries and accelerating after American entry into World War II that finally brought the economy back to full employment. By 1942, the United States had essentially eliminated the mass unemployment that had characterized the Great Depression. The New Deal may not have ended the Great Depression, but it did offer assistance to millions

Starting point is 00:13:41 of people, and perhaps more importantly, fundamentally changed the role of the federal government. Nearly a century later, Americans are still living with the institutions, laws, and political debates that first emerged during the New Deal. The executive producer of Everything Everywhere Daily is Charles Daniel. The associate producers are Austin Otkin and Cameron Kiefer. Research in writing for this episode was provided by Joel Hermanson. My big thanks go to everyone who supports the show over on Patreon. Your support helps make this podcast possible. And I also want to remind everyone about the community groups on

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Everything Everywhere Daily: History, Science, Geography & More - The New Deal

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