Impact of the Great Depression and the New Deal on American Society - Assignment Example

Qn. 6 The major impact of the Great Depression and the New Deal on American society (1929-1941) Name Course Tutor Institution Question 6 The major impact of the Great Depression and the New Deal on American society (1929-1941) Introduction The Great depression started with the Wall Street crash of October, 1929 and quickly spread globally. In the United States, it was the longest and worst economic collapse in the history of the contemporary industrialized globe, lasting from 1929 to early 1940s. Starting in the United States, the depression spread to majority of industrial countries in the world, which in the twentieth century had become economically dependent on each other1. The Great depression led to rapid declines in the sale and production of goods, and a severe, sudden rise in unemployment. Banks and businesses closed down, individuals lost their homes, savings and jobs, and several depended on charity for survival. In 1933, which was the hardest point of depression, over 15 million Americans which is one quarter of the country’s workforce were jobless2. The new deal was a series of economic series of economic programs that were implemented in the United States between 1933 and 1936. The New Deal, introduced by Franklin Roosevelt was aimed at transforming United States economy which had been destroyed by the Wall Street crash. The programs were responses to the Great Depression on relief, recovery and reform, relief for the poor and unemployed, recovery of economy to normal levels and reform of financial scheme to avoid a recurrence of depression3. Impacts of the Great Depression on American society Led to election of President Roosevelt and creation of the New Deal programs The Great depression generated long term impacts on the American society that are still perceptible over half a century after it came to an end. It resulted to election of Franklin Delano Roosevelt as the president of United States, who developed the programs called as the New Deal to counteract the impacts of Great depression. The programs expanded the intervention of the government into novel areas of economic and social concerns and developed social help measures on national level. The Great Depression basically changes the relationship amid the people and the government, who came to accept and expect an increased role in their economy as well as their lives. The New Deal programs also brought together a novel, liberal political alliance in America. The policies of Roosevelt won the support of blacks, unions, individuals who obtained government relief, religious and ethnic minorities, intellectuals and several farmers, creating a coalition that was the backbone of the Democratic Party for the following decades4. Social and cultural impacts of the Great Depression Unemployment was a major impact of the Great depression in American society. Between 1929 -1939, the American unemployment rate was at an average of 13.3 percent. The great depression resulted to a greater rise in the rates of crime as numerous unemployed individuals resorted to petty theft in order to get food. There were also numerous cases of malnutrition and prostitution was on rise as desperate females sought means of paying their bills. Health care seized to be a priority for numerous Americans because visiting a doctor was reserved solely for the direst of situations. Alcoholism increased as many Americans sought outlets for escape from poverty and desperation, compounded by repeal of prohibition in 19335. Cigar smoking became too costly and therefore many citizens shifted to cheaper cigarettes which led to heath problems. Higher education stayed out of reach for majority of Americans as the country’s universities saw their learners bodies shrink during the initial half of the decade. High school attendance rose amongst the males, nevertheless. Since the prospects of a young male obtaining a job were so incredibly faint, several decided to stay longer in the school. Nevertheless, public spending o education sharply declined, causing several schools to open understaffed or to close down as a result of lack of finances. Demographic trends also sharply changed. Marriages were delayed because several men waited until they were able to provide for a family prior proposing to a prospective spouse. Rates of divorce steadily dropped in the 1930s and abandonment rates were on the rise as several husbands selected the poor man’s alternative and just ran away from their marital unions. Birth rates sharply fell, particularly during the lowest points of depression and more and more people learned about birth control in order to prevent the added expenses of unanticipated children6. Mass migrations persisted throughout the 1930s and upstate New York and rural New England lost numerous citizens seeking opportunities elsewhere with the Great Plains lost its populace to states like Arizona and California. The Dust Bowl drove thousands of Arkies and Okies searching to look for better conditions of living. Majority of the migrants were adolescents who were seeking opportunities away from families that had young children to feed. More than 600, 000 individuals were seized hitching rides on trains during the period of the Great Depression but at many instances offenders went unpunished. Economic downturn The Great Depression began with the crash on the Wall Street market crash which initiated the worst economic crisis in the United States history. It had overwhelming on every sector of the economy for more than a decade. Thousands of United States citizens lost their jobs, financial institutions collapsed and businesses failed. Wages and salaries for workers who were fortunate enough to obtain jobs fell drastically7. Throughout the 1930s more than 9,000 banks failed. Banks deposits were uninsured and therefore as banks failed individuals simply lost their savings. The surviving banks, not sure of the economic condition and concerned about their own continued existence were not willing to develop new loans. And this exacerbated the situation resulting to less and less spending. Several banking experiencing deficiencies of cash were compelled to sell their assets at fallen price levels and were therefore driven to insolvency. The federal government wasn’t providing bailouts and depositors lost confidence in the financial scheme because they did not know which financial institutions were sounder than others and thus pulled their money out of all banks, bad or good, indiscriminately. People across United States were putting their cash in safe deposit boxes and stuffing it within the mattresses8. Alteration of relationships between Americans and their government The major impact of the Great depression on the American society was a dramatic alteration of the relationships amid the government and the American people. The federal government expanded its intervention into novel areas of economic and social affairs and the development and creation of more social help agencies at national level. The relationship between the people and the national government changed drastically as the government took a greater part in the daily economic and social life of the American citizens9. The inauguration of Roosevelt as the 32nd president of America in 1933 signaled the commencement of a new United States citizens and their government. For the very first time in the history of the United States, the people started to look upon the government to help in their economic well being. For several Americans, Roosevelt introduction of an implausible wide range of economic and social programs, called the New Deal, brought hope to American citizens. Individuals deemed that they had a leader who really cared about their well being and establishment of economic safety nets. The social programs of the New Deal reflected a change in American values generated by shared hardships of the depression period. The experience of the depression discredited the tremendous individualism and self interest pursuit that were characteristics of the 1920s and revitalized an emphasis on compassion, community and cooperation. These values were reflected in popular culture of the time and in labor and political movements that emerged and expanded during the 1930s.The New Deal programs were planned to initially bring relief in terms of clothing, food, and monetary payments to the Americans who were worst hit by the Depression10. The new deal programs were followed by recovery and reform programs were aimed at stimulating the economy and lay down plans that would minimize the danger of future depressions. The government became intricately engaged in labor organizations, business regulation, social security, stock market reform, resource conservation, public support of arts, farming reform and public health reform. Business leaders desolated and ended the laissez-faire atmosphere whereby industries operated free of government control. Higher taxes and government regulation resulted to the end of the long convention of industry by voluntarily controlling itself. Changes in how Americans viewed the government The extraordinary incident of the Great Depression brought main changes in the way Americans view the government. In the past the federal government was seen as disconnected from the daily activities of Americans. The cruelty of the Depression made America citizens to consider and even demand that the federal government to take action to insure and enhance well being of the citizens. For the first time several citizens questioned the United States scheme of democracy and capitalism, an economic scheme whereby goods are owned by private businesses and production and price is privately decided. They also questioned the idea of individualism, the American conviction that individuals can successfully make their personal way in the society without the intervention of the government. The reigning mood of this notion shifted from opportunity to despair, from growth to survival. A philosophical tow of battle raged amid big businesses, which wanted to work out of the nation’s economic woes willingly and those who wanted the government to start controlling business. At the beginning of the 21st century, debate persists over how much the government must go on with guaranteeing financial security of the citizens. Debates also rage over the government control of business, cooperation versus individualism for common good of the citizens and over particular issues like the social security system, the function of labour unions and the welfare scheme offering assistance to the poorest nations11. Impacts of the New Deal on American society Change in structure of the American government The new deal produced a significant change in the structure of American government. The national government came to play an increasingly big role in financing of social welfare programmes, whilst administration of these programmes was basically situtated at the states. Both the purely national and shared federal portions of the welfare scheme were characterized by impersonal laws. Americans elected Franklin Delano Roosevelt president in 1932 since they deemed that he could more effectively combat the Depression than his Republican antagonist, President Herbert Hoover. Roosevelt promised a new deal which he certainly delivered.12 Through implementing a wide range of innovative policy Franklin Delano Roosevelt (FDR) was capable of pulling America away from the brink of social, economic and political disaster and he initiated the foundation for future prosperity and stability. Under FDR, the American federal government assumed powerful and new roles in the economy of the nation, in its corporate life, in welfare, wellbeing and health of its citizens. In 1935, the federal government warranted unions the right to organize and collectively y bargain, while the 1938 Fair Labor Standard Act established a scheme for laying a floor under wages and ceiling on hours that continuous to date. In 1935, the federal government provided financial assistance to the unemployed, infirm and aged when they could not longer provide for themselves. Starting in 1933, it assisted the agricultural and rural America with development programs and price supports when the sectors could hardly survive. Through embracing the activist fiscal policy after 1937, the federal government assumed the responsibility of smoothing out the American economy.13 Protection of workers rights and finance and banking One of the areas in which the New Deal policies have had lasting impact is protection of the American workers. The legislation of the New Deal, like the fair labour Standards Act and the Wagner Act, established standards for hours and wages, prohibited child labor and made sure that workers had the right to organize and collective bargain with employers. In the modern United States, the national labor relations board which was established under the Wagner Act continues to function as an intermediary in labour rows between employers and unions14. In the banking and finance sector, the New Deal programs created new policies. The Securities and Exchange Commission which was created in 1934 continues in the monitoring of the stock market and also enforces laws concerning the sale of bonds and stocks. The federal deposit insurance corporation, established by the 1933 Glass-Steagall Act, has shored up the American banking system through reassuring the individual depositors that their money is protected against los in case of bank failure. At the moment, individual accounts in the U.S. federal banks are insured by Federal Deposit Insurance Corporation for up to 100,000 dollars15. Social and economic reforms The new deal financial, social and economic reforms, entailing the establishment of the Securities and Exchange Commission and the federal deposit insurance commission and social security have assisted to stabilize the economy and finances of the country. Even though the country still experience economic declines or recessions, the savings of people are insured, and they are given unemployment compensation in case they lose their jobs16. One of the most significant legacies of New Deal is that the government has assumed responsibility for social welfare of American people. Under Roosevelt, the government commenced the establishment of a social security scheme that would assist a huge number of needy citizens get some aid17. The social security act offers an old age insurance program, the unemployment compensation scheme and help to disabled individuals and families with dependent kids. Also the New Deal policies had a considerable effect on the American agriculture. The New Deal farm legislation established quotas on production of crops, like wheat to control surpluses. Under the 1938 second agricultural adjustment act, loans were given to farmers through the commodity credit corporation. The value of the loans was established by the surplus crops of the farmer and parity price, which is a price aimed to keep the income of the farmer steady. Other federal government programs, like rural electrification, aided to improve the living conditions in rural America18. Environmental conservation The New Deal made efforts to protect and conserve the environment. Roosevelt was greatly committed to environmental conservation and endorsed policies intended at protecting the natural resources of the country. The dust blow which had happened as a result of destructive techniques of farming that continued to loosen up good top soil in Middle America. This made the government enact within the New Deal, techniques to control soil erosion within the dust blow region and farmers started to obtain payment from the government. The government enacted the Agricultural Administration Act, which enhanced farmers of the dust blow to murder their surplus livestock and obtain payments from the federal government. Also, farmers were paid not to plant on portion of their land, which efficiently raised value of crops in the land. The resettlement administration also gave the farmers in the new land a new start by taking them away form the dust choked region The dust blow events set several farming and cultural reforms into motion in American society19. The civilian conservation developed hiking trails, planted trees and constructed fire lookout towers. The soil conservation service educated farmers how to do soil conservation via crop rotation, terracing and contour plowing. The congress also passed the 1934 the Taylor Grazing Act to aid minimize grazing on civic land. The immense grazing on public land had resulted to erosion that led to the 1930s dust storms. The Tennessee Valley Authority exploited water to produce electricity and to assist in prevention of devastating floods in Tennessee Valley. The federal government also added to national park scheme in 1930s, created new wildlife refuges and also set huge wilderness regions20. Expansion in the role of the government in the economy Through the New Deal programs, Roosevelt administration increased the power of the government, offering it and especially the president a more active function in shaping of the American economy. It achieved this by infusing the country’s economy with thousands of dollars, through creating federal jobs, through trying to regulate demand and supply, and through increasing the active participation of government in settling management and labor disputes21. Also, the federal government established agencies like the Securities and Exchange Commission and the federal deposit insurance corporation, to regulate investment and banking activities. Even though the new deal didn’t end the Great Depression, it assisted in reducing the suffering of thousands of children, women and men by offering jobs, money and food. It also gave American citizens hop and assisted them to reclaim their sense of dignity which had been smashed by the Great Depression. The national government had to go deep into the debt to offer aid and jobs to American citizens. The federal deficit rose to 2.9 billion dollars in financial year 1934. As a consequence the cutbacks in national spending made in 1937 to 1938, the deficit decreased to 100million dollars.22 However, in 1939, the federal deficit increased again to 2.9 billion dollars but what actually ended the Great depression was the massive quantity of expenditure by the government for tanks, guns, airplanes, ships and other supplies and equipments that the nation required for the Second World War effort. Conclusion The Great Depression and New Deal programs had significant and long lasting impacts on the American society. They both dramatically changed the relationships between the American citizens and their government. The federal government expanded its function in many new economic and social affairs and the creation and development of social help agencies at national level. The relationship amid the federal government and the people drastically changed as the government took greater part in social and economic life of its citizens. American people came to accept the responsibility and involvement of the government in caring for the needy member of the society and regulating several economic aspects. References Hakim, J., (1995). A History of the U.S. New York: Oxford University Press. Cole, D., &Lee O., (2004). New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis. Journal of Political Economy 11, 779-816. Katz, L., (1998). Great Depression. New York: Franklin Watts. Bordo, D., & Goldin, C., (1998). The Defining Moment: The Great Depression and the American Economy in the Twentieth Century. Chicago: University of Chicago Press. Temin, P., (1994). Socialism and Wages in the Recovery from the Great Depression in the United States and Germany.” Journal of Economic History 50, 297-308. Vedder, K., &Lowell G., (1993). Out of Work: Unemployment and Government in Twentieth- Century America. New York: Holmes and Meier. Wright, Gavin. (2000). “The Political Economy of New Deal Spending: An Econometric Analysis.” Review of Economics and Statistics 56, 30-38. Tanner M, & Ferrara, P., (1998). A new deal for social security. Washington D.C: CATO Institute Edsforth, R., (2000). The New Deal: America’s responses to the Great Depression. New York. Wiley-Blackwell Brown, C., (1994). Fiscal Policy in the Thirties: A Reappraisal.” American Economic Review 46, 857-879. Read More