Evaluate the Approach of Franklin Roosevelt in Dealing With the Problems of the Great Depression - Essay Example

A large chunk of population was using credit to buy the necessities of life and the consumers were losing their buying power. The production levels fell and the businesses failed. The farmers also suffered as a result of this as the food prices fell (Burgan 9) and the primary industries like mining suffered the most. The USA economy also saw the “Black Tuesday” in this time when the stock market crashed. Other problems associated with the Great Depression were that a lot of banks had to close down as they had invested large part of the people.

When this started happening, a panic was seen throughout the entire country as people started withdrawing their own cash from the banks, resulting in turmoil and more bank closure. Since the banks did not have that much money on hands with them, the people who did not reach the banks in time became bankrupt. In this great depression even farmers were not safe because during this time there were severe droughts as the Great Plains were hit by dust storms. These storms destroyed everything in their path, the farmer’s crops so that they were not even able to feed themselves in addition of being in debt.

The Great Depression started in the United States in the presidency of Herbert Hoover who often gave the hopes for a bright future for the USA but majority of people blamed him for the economic crisis that the USA faced and hence his reelection was out of question (Marsh 8). Therefore in 1932 Franklin Roosevelt was elected as the President of the country with the people banking him on hopes to get them out the disastrous situation. As soon as Roosevelt assumed the office he closed down all banks and ordered them to open when the conditions had stabilized.

He then initiated the New Deal. He took a series of decisions and the legislations were passed which the historians see as the 3 R’s. They are recovery, relief and reform. The relief part tended to introduce short term programs that were aimed at finishing the immediate sufferings of the poor, recovery aimed at the long term programs to bring the economy back at its pre depression level and reform was aimed at bringing in laws and changes that will prevent future depression like these. The ‘new deal’ was broken down into many parts.

The first part consisted of policies of the trickledown effect. The programs pointed towards the Keynesian set of economic policies. The first new deal aimed which was a series of acts in 1933 included the agricultural adjustment act which accepted that low prices resulted from an overproduction of crops therefore the government gave subsidies to farmers so that they produce lesser so that the crop prices can go up again. However some people said that this contradicted with the fact that so many people were going hungry in the country.

It also failed to deal with the primary problem of the great depression which was the falling consumer demand due to unemployment and continuously decreasing wages. Then again there was a National Industrial Recovery Act (NIRA) in 1933 which said centralized planning to combat this crisis (Ruggiero 41). Industries were advised to (The New Deal or Radical Change) avoid the cut throat competition and that they would not be broken up but instead would work in collaboration with each other and be controlled by organizing the labor and the governmental activities.

They will plan out the activities of the