Lec 19 New Deal of FDR

The video begins by summarizing the end of the previous lecture, which introduced Franklin Delano Roosevelt (FDR) as the incoming president during the Great Depression. The 1930s are often remembered as the 'era of FDR,' with his New Deal plan credited for ending the Depression. However, the lecture aims to complicate this popular narrative, suggesting the 1930s were a much more complex period involving intricate governmental processes, societal norms, race relations, and activism that often get overshadowed by FDR's larger-than-life image. The central question posed is whether the 1930s were truly just 'the era of FDR.'

The 1932 election saw incumbent President Herbert Hoover seeking re-election. Hoover was heavily blamed for the Great Depression, despite not causing it, due to his perceived callous public appearance and his reliance on volunteerism rather than direct federal relief. The 'Bonus Marchers' incident further solidified public dissatisfaction with Hoover. This created a wide-open opportunity for a new president. FDR, though not a national household name then, had some recognition, largely due to his distant cousin, former President Theodore Roosevelt. His political career in New York as a Democrat, where he advocated for unemployment and social welfare relief, presented him as a promising alternative to Hoover. FDR campaigned on the promise of a 'new deal,' which resonated with a public desperate for change.

Upon his election, FDR promised 'Action, and Action Now!' and delivered. In his first 100 days, he passed 12 new pieces of legislation, a remarkable feat compared to previous presidencies. One notable achievement was the ratification of the 21st Amendment, which repealed Prohibition (the 18th Amendment), making alcohol legal again. This was seen as a way to generate tax revenue and address public morale during the Depression. A critical piece of legislation was the Emergency Banking Act. This act declared a four-day national banking holiday to halt bank runs and allow Congress to restructure and regulate the banking system. The goal was to restore health to the banks and get money circulating in the economy again, as unregulated bank investments had led to massive losses of public funds during the stock market crash.

To rebuild public trust in banks, FDR's administration established the Federal Deposit Insurance Corporation (FDIC). The FDIC guaranteed depositors' money up to $2,500 (equivalent to approximately $45,000 today). This aimed to prevent people from withdrawing their money from banks and hiding it, encouraging them to redeposit funds to stimulate the economy. The FDIC still exists today, insuring deposits up to $250,000. Beyond legislative action, FDR employed 'fireside chats,' using radio as a widespread medium to communicate directly with the American public. These casual, plain-language talks aimed to reassure citizens, explain his policies, and foster a personal connection, making him appear compassionate and caring, unlike his predecessor. The chats were incredibly popular, leading to a massive influx of letters to the White House and requiring the hiring of 120 new staff members to handle the mail.

Despite his popularity and actions, Roosevelt faced significant criticism from both the political left and right. The right, primarily Republicans, criticized his extensive welfare programs, arguing that funds should be directed to big businesses for job creation and economic growth, advocating for deregulation. The left, including many who voted for him, felt that his New Deal wasn't doing enough to help ordinary citizens, farmers, and wage workers, who were still struggling with unemployment and poverty. In response to these criticisms, particularly from the left, Roosevelt launched the 'Second New Deal,' aiming for a mix of relief, recovery, and long-term safety. Its foundation was the Social Security Act of 1935.

The Social Security Act of 1935 was designed to protect average citizens and families against job loss, poverty, and old age. One aspect provided direct financial aid to the poor, unemployed, single mothers with dependent children, and the disabled, with states determining specific populations and requirements, and the federal government matching funds. This initiative aimed to increase spending and stimulate the economy. The second, and more commonly recognized, component was the old-age pension. Before this act, retirement relied solely on personal savings or family support. The Depression wiped out savings, forcing older individuals to continue working, thus preventing younger generations from entering the workforce. Social Security provided a guaranteed monthly income upon retirement, encouraging older workers to retire and opening up jobs for the youth. This system, though currently facing challenges with the large Baby Boomer generation retiring, has been a cornerstone of US legislation since its inception.

In 1936, Roosevelt sought re-election. Despite Republican predictions that his critics would prevent his re-election, FDR won. A significant factor in his victory was the historic shift in the African American vote. Traditionally loyal to the Republican Party as the party of Abraham Lincoln, desperate African Americans (often the last hired and first fired during the Depression) saw Roosevelt's New Deal policies as their best hope for relief. Their collective vote for FDR marked the first time the majority of African Americans voted Democrat, a trend that continues today. This strong show of support from a large voting bloc potentially influenced Roosevelt to address their needs. The lecture concludes by acknowledging the perception of FDR as a 'savior' but sets the stage for a more nuanced discussion in the next session about the true extent of his singular impact.