The NEW DEAL, Explained [APUSH Review]

Roosevelt's New Deal was largely driven by Keynesian economics, championed by British economist John Maynard Keynes. This theory posits that government spending, even through budget deficits, is crucial for increasing consumer demand and lifting an economy out of depression. This represented a significant shift from the conservative economic policies of the 1920s.

The video opens by setting the scene in the 1930s, highlighting the severe economic impact of the Great Depression, which began with the 1929 stock market crash. The 1920s' prosperity, fueled by deregulation and credit, collapsed, leading many Americans to blame Republican economic policies under President Herbert Hoover. The 1932 presidential election pitted Hoover's laissez-faire approach against Franklin D. Roosevelt's (FDR) call for decisive federal action, resulting in FDR's landslide victory and the mandate for his 'New Deal' plan.

The first 'R' of the New Deal was 'relief' for the unemployed. With unemployment soaring to 25% by 1933, the New Deal initiated federal works programs to create jobs. Examples include the Public Works Administration (PWA) for infrastructure, the Tennessee Valley Authority (TVA) for power and flood control, and the Civilian Conservation Corps (CCC) for young men in forestry projects. These efforts reduced unemployment to 15% by 1937. Roosevelt also implemented short-term measures like the bank holiday and the Emergency Banking Act to stabilize the financial system and restore public trust.

The second 'R' was 'recovery' for businesses, exemplified by the National Industrial Recovery Act (NIRA) of 1933. This act aimed to combat cutthroat competition by establishing industry codes agreed upon by labor and corporations, setting minimum wages and working hours. The third 'R' was 'reform' of economic institutions. Key reforms included the Glass-Steagall Act, which increased bank regulation and created the Federal Deposit Insurance Corporation (FDIC) to guarantee deposits, and the Social Security Act of 1935, which established a federal safety net for retirees.

Despite its broad scope, the New Deal faced significant criticism. Conservatives, as outlined in the Conservative Manifesto, argued that it represented an overreach of federal power and a move towards socialism. They successfully challenged parts of the New Deal in the Supreme Court, leading to Roosevelt's controversial 'court packing scheme.' Liberals, conversely, felt the New Deal didn't go far enough, with figures like Huey Long proposing radical wealth redistribution through his 'Share Our Wealth Society' program.

The New Deal did not end the Great Depression (World War II mobilization did), but it profoundly transformed the United States. Its legacy includes numerous enduring reforms and regulatory agencies like the FDIC, Social Security Administration, and the Securities and Exchange Commission (SEC), establishing the US as a limited welfare state. Additionally, the New Deal led to a significant realignment of political parties, particularly the shift of ethnic groups, working-class communities, and especially Black Americans, who had historically supported Republicans, to the Democratic Party. This change was influenced by figures like Mary McLeod Bethune, who advocated for Black youth within New Deal programs.