HOOVER vs. FDR What should/can the President do??
Role of Federal Gov’t BEFORE Great Depression? Laissez-faire Capitalism EARLY in the Depression? People did not have much contact with fed. gov’t No gov’t programs in place to address large scale economic crisis
Hoover vs. FDR Education/Career Gov’t roles Education/Career Stanford/Engineer Gov’t roles WWI food in US/relief in Eur 1921-28: Sec. of Commerce 1928: President In ‘28 campaign: "We in America today are nearer to the final triumph over poverty than ever before in the history of any land." Education/Career Harvard/Columbia Law Lawyer Gov’t roles NYS Senate Asst. Sec of Navy, WW 1928-32: Gov of NYS 1932: President
Hoover vs. FDR Initial reaction to Depression: Optimistic Expected quick recovery People should not suffer, but opposed federal relief VOLUNTARY, PRIVATE & LOCAL Asked businesses to pledge to not cut wages or production Suggested cities/towns launch bldg projects to create jobs Initial reaction to Depression, before Pres.: NYS provide public works jobs to support jobless “Brain Trust” of advisors “Economics of scarcity”: cut production to raise prices Like Hoover, supported balanced budget (gov’t does not spend more than it has)
Hoover Programs see Hoover’s Response hwk Did put some federal programs in place: Agricultural Marketing Act Effective? Reconstruction Finance Corporation, 1932 Emergency Relief Act, Jul 1932
Evidence Hoover’s effort insufficient? see Hoover’s Response hwk Wages dropping Unemployment up Little money “trickles down”
Evidence Hoover’s effort insufficient? see Hoover’s Response hwk Public resentment Too little, too late? Hoover = scapegoat?
Evidence Hoover’s effort insufficient? see Hoover’s Response hwk
FDR wins 42 of 48 States
FDR “This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” -Inaugural Address, March 4, 1933
NEW DEAL March 9-June 16, 1933 1st New Deal: FIRST 100 Days 3Rs FDR proposed 15 bills All passed with only minor changes 3Rs 2nd New Deal began 1935
FDR: “Brain Trust” Advisors ECONOMICS of SCARCITY Strategy: Cut production to raise prices PRIMING THE PUMP Strategy: Gov’t deficit spending