The great depression is the worst economic calamity that happened since industrialization came in to place. The depression lasted from the year 1929 to the year 1939. The depression happened after the stock market crashed in October 1929 and overtime it was characterized by dropped consumer and investment which caused a decline in industrial production (Wallis 517). At the start of the depression the American president was Herbert Hoover, and in the first years of the depression banks were greatly affected, and they were failing. By the year 1933 thousands of banks had closed due to the failing banking market. Still, in this year president, Franklin D. Roosevelt was elected as the president of America. It is through Franklin D Roosevelt that the nation was able to recover from the great depression. The president came up with a new deal which was supposed to rescue the nation from its financial constraints. This paper will talk about how FDR was instrumental in reducing unemployment and solving banking problems. It will also highlight how he helped to organize labor boosted wages which were enough to solve the problem of consumption (Wallis 517).
Franklin D Roosevelt and how he reduced unemployment levels during the Great Depression
President Franklin D Roosevelt was the 32nd president of the United States of America, and he served from 1933 until his death in 1945. He was the president during most of the Great Depression and played a major role in the implementation of the New Deal domestic agenda (Watkins 365). Contrary to what many people believe he plays an integral part in implementing programs which provided relief to unemployed people. Unemployment levels during the crisis reached very high levels. Some of the states such as Ohio had a population of more than 80% of unemployed people. Elsewhere in Massachusetts, around 90% of the entire population was unemployed. Upon his election, the president urged Americans to put their savings back in the banks, and most of them had reopened before the month had ended (Wallis 518). During his tenure, he signed the Tennessee Valley Act into law. This law helped in the generation of cheap hydroelectric power in the region.
In a bid to end unemployment he also ensured the Congress passed a bill which paid commodity farmers so as they leave their farms fallow to end agricultural surpluses and boost prices (Wallis 519). There were other acts which were formed to increase jobs and reduce the number of unemployed people in the country. For instance, the National Industrial Recovery Act was passed and made workers have the right to form unions and bargain for higher wages and working conditions as a group (Watkins 374). Some of these Acts were not as successful as they were expected to be and this led to the creation of the Works Progress Administration whose main objective was to provide jobs for unemployed people. The WPA gave jobs to many people and was also influential in giving artists and musician's jobs. One of the main factors that led to the success of the WPA is that its projects were not competing with the private industry, so its main focus was to build post offices, bridges and parks (Watkins 362). FDR also signed the social security act which guaranteed pensions and also ensured a system was set up for unemployment insurance.
The various policies which were put in place in this period ensured the government considered jobless people and this facilitated to the creation of new jobs. His fight to ensure the disabled were taken care of was very positive, but he also had some shortcomings. One of the things which Roosevelt can be criticized for when it comes to job creation is that he encouraged racism (Wallis 518). The black community during this period went through many injustices, and they did not benefit greatly from the policies put in place.
How successful was Roosevelt in solving Economic problems during the Great Depression
One of the most important questions which come to your mind when you hear the name Franklin D Roosevelt is how his New Deal was important in solving the problems faced by US economy. Over time historians and economist have studied and debated whether the New Deal was responsible for the ending of the Great Depression. Spending and government intervention was the main tactic used by Roosevelt to concur the Great Depression (Wallis 519). The government invested in Acts which would help agriculture, industry and reduce unemployment. The Agriculture Adjustment Administration (AAA) was an act whose main purpose was to increase agricultural purchasing power, provide emergency assistance with respect to agriculture indebtedness and provide the liquidation of joint-stock land banks.
The New Deal was played a key in encouraging the beginning of labor movements. The labor movement was important as it increased the power of most employees as they now as for higher wages. Higher wages good for the economy since the citizens now had the purchasing power of products. The problem of consumption of local produce was greatly reduced. Even though most of the workers who participated in the strikes in the fight for increased wages were laid off the most important success to take note of is that the employees now had a power to voice their rights (Wallis 518). Most of the companies which had laid off their workers were blacklisted, and this was a warning to other companies. It is important to note that the country's rose when the citizens had the power to purchase things locally.
Roosevelt also played a major role in reviving the banking systems which had closed at the start of the Great Depression. As the Great Depression was starting most of the people withdrew money from their local banks keeping it at home. The Emergency Banking Act of 1933 aimed at restoring the public's confidence in the nation's financial systems (Fishback 241). After the Act was signed in to use the president assured the people that it was safer to keep money in the reopened banks than under the mattress. Most of the people adhered to the president's call and they put money back into the banks. The Emergency Banking Act impacted the Federal Reserve which led to the creation of a new framework for monetary policy...
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