The New Deal

1932 vs Americans were ready for change… – Presidents Bush & Hoover Smaller government, relative to economy Less regulation & intervention early in their terms Americans (in general) were frustrated – Presidents Roosevelt & Obama More regulation & intervention Response to people’s vote for change DEMOCRACY in Action

The Election of 1932 Democratic Nominee: – FDR Republican Nominee: – President Hoover – Incumbent Senate: Democrats claimed a 2/3 majority House of Reps: Democrats claim ¾ majority

People Speak With Their Vote: “Realignment Election”

THE NEW DEAL 3 Primary Objectives: – 1. help the needy – 2. economic recovery – 3. financial reform Formulated with the “Brain Trust” – FDR’s advisers Why are healthy banking and financial systems important?

The First Hundred Days March 9-June 16, 1993 Intense period of legislating and passing into law New Deal policies 15 major pieces of New Deal legislation passed Expanded Federal government’s role in economy NEW DEAL Clip/FDR Speech NEW DEAL Clip/FDR Speech

The Influence of John Maynard Keynes British Economist Promoted idea of deficit spending to stimulate economy Spend way out of depressions by putting $ in hands of consumers – Buy goods, fuel growth

Banking & Finance Reform 1933: Widespread bank failures March 5, 1933: Roosevelt declares “Bank Holiday” – Closes all banks Emergency Banking Relief Act is passed – Fed. Gov. inspected banks – Determined which banks would reopen or stay closed – Gave loans to banks to help pay their debts

Fireside Chats Began on March 12, 1933 Day before first banks reopened Function: Discuss issues in clear, simple language – Connect with the people – Build confidence in government & economy FDR's first fireside chat