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Economic philosophies of the New Deal

created by magicmanzach

(thing) by magicmanzach (2.1 d) (print)   ?   1 C! I like it! Mon Mar 31 2003 at 15:26:33

Franklin Delano Roosevelt's economic strategy during the Great Depression was the product of a steady set of core principles, although the way in which it expressed itself may have sometimes seemed inconsistent. During Roosevelt's early time in office, he experimented with several different financial plans. Each day that passed during FDR's terms showed an increasing consistency in the nature of his plans. Roosevelt came from a background in government and had significant expertise in managing the fiscal affairs of the state of New York; because of this, he came to the presidency with a clear vision for repairing the situation of the nation.

Roosevelt's early days in office were marked by his inheritance of the already failing American economy. Roosevelt's campaign platform included vastly reduced spending, a promise which he quickly found himself unable to deliver on. Wallace Davies, in "The New Deal: Interpretations" (p. 49) said of this:

"In the 1932 election [Roosevelt] had called for a balanced budget, attacked Hoover for waste and extravagance, and at one point had even promised to reduce government expenditures by 25 percent if need be. Although circumstances had forced him to do just the opposite, he was not very comfortable about it. Even the aristocratic F.D.R. was bourgeois enough to think that a government really ought to live within its income, and he was sensitive to the quite correct accusations that he was not keeping his campaign promises."

During Roosevelt's first stay in office, his opponents attacked him for this very reason, believing that he could do no better than Hoover to save the economy. The main problem with this position was the fact that the dated economic philosophies carried over from the nineteenth century looked on reduced government expenditures as the only solution to a recession. In fact, Roosevelt's deficit spending became the norm for postwar administrations, following Eisenhower's tirade against big government. Hoover espoused this philosophy, as Gilbert Burck and Charles E. Silberman describe him in "Why the Depression Lasted So Long" (John Sperling, p. 142), published in 1955:

"Hoover stuck ... to the balanced budget and the gold standard... [He believed that their] abandonment under any circumstances was something that could be seriously considered only by knaves, collectivists, or crackpots.... Although Hoover ran deficits in 1931 and 1932, these were largely involuntary. And it was to balance the budget that he persuaded the American Legion to forgo demanding a bonus, vetoed a direct relief bill, and took a resolute stand against 'squandering the nation into prosperity.'"

The New Deal threw away the policy of laissez-faire and keeping the budget within the bounds set by taxes. The main tier of the program was the concept that in the absence of jobs, the government must take up the reins of employment and create positions for those who lacked them, regardless of the expense involved. Roosevelt's programs created the proactive equivalent of a welfare state, creating work for any American citizen who desired it. This allowed the average out-of-work American to provide for his family, and increased production on a national scale. Roosevelt's pump-priming philosophy stimulated consumer confidence. In the end, this was the goal of all of his major programs.

Roosevelt understood that he would have to regulate the economy in order to save it. As such, he made it his immediate policy to create programs which ensured the future success of national finances. Although Roosevelt's methods of achieving this goal varied over the course of his first two terms, his successes and his failures both point to the main goal of his administration: to provide work and increase consumption as a result. The Civilian Conservation Corps, Works Progress Administration, and Public Works Administration all attempted to provide employment that was beneficial to the nation, by various means.

Roosevelt firmly believed in the strong executive. He brought a unique mindset to the presidency, and felt that Congress was not necessarily qualified to be the executors of his ideal. As president, he wished to present his economic programs to Congress and allow them to function as a rubber-stamp legislative body. Roosevelt's unwillingness to allow others to interfere with his goals further demonstrated the focused vision of his policies./

Franklin Roosevelt fought all opposition in his government with every ounce of power at his disposal. Through the court-packing endeavor and Huey Long's challenge to his power, Roosevelt continued to exercise the privileges of his position whenever possible. Pump-priming was a simple economic concept, but it defied the laissez-faire policy that had become the government's default during the Progressive era. Roosevelt firmly believed in the power of the consumer mindset, and tried to adjust it via employment and national reconstruction. The New Deal was at its core composed exclusively of policies designed to increase spending by helping the plight of the American people. Roosevelt stuck with this policy whenever possible; when he adjusted it, it was only to fit the needs of an occasionally hostile legislative branch.


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