give me 20 notes on this
Well hey there and welcome back to Heimler’s History. So we’ve been going through Unit
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7 of the AP U.S. History curriculum and in the last video we considered
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the 1920s with all of its uproarious roaring, but in this video it’s time
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to get depressed because we need to talk about the Great Depression. So if you’re
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ready to get them brain cows milked limited welfare state style, then let’s get to it.
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So in this video I’m going to try to do the following:
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Explain the causes of the Great Depression and its effects on the economy.
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So despite the cultural and moral crises that were playing out in the 1920s, it was,
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in general an era of American prosperity, not for all, but for a lot of people. But
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all that prosperity came crashing down on October 29th, 1929, otherwise known as Black
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Tuesday when the stock market crashed. Now to be clear, the crash was a weeks-long process,
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but generally speaking, the bottom fell out on October 29th. So, what caused this?
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Well, first, farmers across the nation had overproduced for several years and were therefore
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in severe debt. And you might wonder how in the world OVER production can be a problem. Well,
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when you combine overproduction with high tariffs, then baby, you got a depression stew going.
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Tariffs, which is to say, taxes on imports, were exceedingly high in the 1920s. And in 1930,
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president Herbert Hoover signed the Hawley-Smoot Tariff into law which crippled the ability of the
HAWLEY-SMOOT TARIFF
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United States to sell its excess products, both agricultural and otherwise, on a global market. So
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that’s why agricultural overproduction put farmers in a bad way leading up to the stock market crash.
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Additionally, the stock market itself was artificially inflated during the 20s due
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to risky investment behavior like buying on margin, otherwise known as speculation.
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Because it was assumed that the stock market prices would continue to rise,
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then it became a common practice to borrow money to buy stocks. And this was a good
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bet for a while because the stock prices rose and you made back the money you had borrowed.
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But what happens when you borrow a bunch of money you don’t have to buy stocks on
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the assumption that prices will increase and then the bottom falls out? Well, in addition to losing
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all the value of your stock purchases, you’re also in crushing debt without the funds to pay it back.
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So without getting too far into the weeds, these were some of the causes of the stock
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market crash of 1929, which is generally understood as the beginning of the Great
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Depression. Once the Depression hit Americans, poverty and homelessness abounded and people
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began foreclosing on their home mortgages left and right. And no small amount of people who had lost
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their homes took up residence in shantytowns which they dubbed Hoovervilles after President Hoover.
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They did this as a criticism of Hoover’s laissez faire economic policies at the beginning of the
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Great Depression. Hoover, as a Republican, believed that given enough time, the economy
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would correct itself, and therefore minimal government intervention was the right move.
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Now in 1932 it was time for a presidential election and Democrat Franklin D. Roosevelt
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won in a landslide. Part of the reason is because in the face of American suffering,
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Roosevelt was the opposite of Hoover. Roosevelt campaigned on the promise of heavy government
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intervention, and once he came to power, Roosevelt did more to expand the size and
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scope of the federal government than any president before him. Now I know that some
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of my more conservative students just threw up in their mouths a little when I said that,
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but you know, apparently that’s what the majority of Americans wanted in 1932.
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And so it was under Roosevelt’s leadership that policymakers in the 1930s responded to
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mass unemployment and social upheavals caused by the Depression by transforming the United States
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into a limited welfare state, and that just means that the government was going to take
LIMITED WELFARE STATE
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responsibility for the social and economic welfare of its citizens. Now the big program you need to
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know here is Roosevelt’s New Deal which was the banner under which many pieces of legislation
NEW DEAL
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were passed in order to shore up the American economy and address joblessness in America.
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Now technically, there are two phases of the New Deal, but I’m going to talk about it as if
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it was one thing so as to avoid confusion. Now according to Roosevelt’s reckoning,
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the New Deal was there to address the three R’s: relief for the unemployed,
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recovery for businesses, and reform of economic institutions and let’s look at
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some of the New Deal legislative solutions to each. Under relief for the unemployed,
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you saw works programs like the Public Works Administration (PWA) which employed Americans
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to do federal infrastructure work like building roads and dams and bridges. Similarly you had the
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Tennessee Valley Authority (TVA) which hired people to run electric power plants which did
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work to control flooding and erosion. Also you had the Civilian Conservation Corps (CCC) which
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employed young men between the ages of 18-24 to manage soil conservation and forestry projects.
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Under the heading of recovery for businesses, you should know the National Industrial Recovery Act
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of 1933. Roosevelt believed that one of the main factors causing economic hardship was the cut
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throat competition in the business sector that had caused workers’ wages to remain low which in turn
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meant that they couldn’t buy as much. So the NIRA sought to resolve this problem by establishing
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a set of codes agreed upon by representatives from the laboring community and representatives
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from competing corporations. These codes created security for workers by establishing minimum wage
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levels, shorter working hours, and the regulation of the prices of certain petroleum products.
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Under the heading of reform of economic institutions, you need to know the
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Glass-Steagall Act of 1933. Because many folks had lost confidence in the banking system,
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the Glass Steagall Act came in to shore up that confidence. Essentially it increased regulation
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in banks and limited the ways banks could invest people’s money. To this end, the Glass-Steagall
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Act gave birth to a new entity called the Federal Deposit Insurance Corporation (FDIC) which
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guaranteed people’s bank deposits with federal money. Additionally, under this heading you should
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know about the Securities and Exchange Commission (SEC). Not only had people lost confidence in
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banks, but also, understandably, in the stock market. The SEC was established to regulate the
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stock market and prevent turdish behavior like buying on margin and insider trading.
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Now in the second phase of the New Deal, you need to know about one of the most
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enduring programs that was established, namely, the Social Security Act of 1935.
SOCIAL SECURITY ACT
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This law provided for a safety net of income for workers over the age of 65. Basically,
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part of a worker’s wages were withheld by the federal government and then paid
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back to them when they reached retirement age. And that program is still going strong today.
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So I’ve only named a fraction of the New Deal programs, but what you need
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to remember about the New Deal as a whole is that it transformed the United States into a
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limited welfare state and seriously expanded the aims of modern American liberalism.
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Now it won’t surprise you to know that not everyone was happy about big daddy government
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getting so heavily involved in American life. And what’s kind of crazy is that the New Deal was
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criticized BOTH by liberals and conservatives. Liberals griped because the New Deal did too
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much for big businesses at the expense of the unemployed and poor. In other words,
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for some liberals, the New Deal wasn’t liberal ENOUGH. Conservatives, on the other hand,
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criticized the New Deal because of the extreme federal overreach that it represented. Now the
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conservatives on more than one occasion took Roosvelt’s New Deal to the Supreme Court,
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won a few of the cases and effectively narrowed the scope of what part of the
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New Deal was constitutional and what part was unconstitutional.
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Now Roosevelt was none too happy about this narrowing of his efforts by the Supreme Court so
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he proposed a judicial reorganization bill, also known as the court packing scheme. Basically, the
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idea was that this bill would allow the president to appoint new Supreme Court Justices for every
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justice that was older than 70.5 years. At that time, that meant that Rooselvet could appoint six
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additional judges to the Supreme Court. Of course, Roosevelt aimed to pack the court with judges
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sympathetic to the New Deal and theoretically the judicial limitations on his programs would cease.
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However, whether that would have been the case or not, we’ll never know,
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because both parties in Congress strongly opposed this measure as
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an abuse of constitutional checks and balances. TO them it seemed that Roosevelt was grabbing
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too close to dictatorial powers for their taste, and so the bill never materialized.
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Now regardless of its success and failures, the New Deal
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was a BIG Deal. [chuckle]. It left a legacy of reforms and regulatory agencies in its
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wake while also fostering a long term political realignment of Black people, working class folks,
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and ethnic minorities to the Democratic Party, because those groups believed that
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Roosevelt and the New Deal sought to help them in their suffering during the Great Depression.
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Okay, that’s what you need to know about Unit 7 topic 9 and 10 of the AP U.S. History curriculum.
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class and a five on your exam in May. And hey, if you’re not too depressed after this
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video and you want me to keep making them, then subscribe and let me know. Heimler out.
1. The Great Depression was a period of economic turmoil in the United States in the 1930s.
2. The stock market crash of 1929, known as Black Tuesday, is often seen as the beginning of the Great Depression.
3. Agricultural overproduction and high tariffs were major factors contributing to the economic crisis.
4. President Herbert Hoover's laissez-faire economic policies failed to alleviate the suffering of Americans during the Great Depression.
5. Franklin D. Roosevelt's New Deal programs aimed to provide relief, recovery, and reform during the Great Depression.
6. The New Deal included programs such as the Public Works Administration, Tennessee Valley Authority, and Civilian Conservation Corps.
7. The Glass-Steagall Act and Securities and Exchange Commission were established to regulate the banking and stock market sectors.
8. The Social Security Act of 1935 provided income for retired workers and is still in effect today.
9. The New Deal transformed the United States into a limited welfare state and expanded the government's role in addressing economic issues.
10. The New Deal was criticized by both liberals and conservatives for different reasons.
11. Roosevelt's court packing scheme aimed to expand the Supreme Court to challenge conservative limitations on his programs.
12. The New Deal left a lasting legacy of reforms and regulatory agencies in the United States.
13. The New Deal led to a political realignment of Black people, working class individuals, and ethnic minorities to the Democratic Party.
14. The Great Depression had a significant impact on poverty and homelessness in the United States.
15. The Hawley-Smoot Tariff exacerbated the effects of the Great Depression by restricting American exports.
16. The New Deal programs aimed to address the social and economic needs of Americans during the Great Depression.
17. Roosevelt's heavy government intervention during the Great Depression contrasted with Hoover's hands-off approach.
18. The National Industrial Recovery Act sought to address economic hardships by regulating business competition.
19. The Social Security Act provided a safety net for retired workers and is considered a landmark legislative achievement.
20. The New Deal programs played a crucial role in transforming the economic and social landscape of the United States during the Great Depression.