Speaker John Green
Hi, I'm John Green, this is Crash Course US History, and today we're going to get a little bit controversial as we discuss the FDR administration's response to the Great Depression, the New Deal.
Explores FDR's New Deal response to the Great Depression, its programs, controversies, and impact on American government and society.
Key Takeaways
- The New Deal significantly expanded the federal government's role in economic and social policy.
- It introduced programs aimed at relief, recovery, and reform to address the Great Depression.
- Some New Deal programs were controversial and faced legal challenges, including from the Supreme Court.
- The New Deal reshaped American political alignments and the Democratic Party coalition.
- Despite mixed opinions on its effectiveness, the New Deal remains a pivotal moment in U.S. history.
Summary
- The video discusses the New Deal as FDR's administration response to the Great Depression, highlighting its controversial nature.
- It explains the New Deal's role in redefining the federal government's role and realigning the Democratic Party's coalition.
- The New Deal is categorized into three Rs: Relief, Recovery, and Reform programs, with some programs overlapping categories.
- The First New Deal (pre-1935) included key programs like the Civilian Conservation Corps, Agricultural Adjustment Act, Glass-Steagall Act, and National Industrial Recovery Act.
- The video covers the creation of the FDIC and bank holiday to stabilize the banking system.
- It highlights the Tennessee Valley Authority's role in rural electrification and flood control, noting its controversy with private companies.
- The Agricultural Adjustment Act faced criticism for destroying food while many were hungry and for benefiting property-owning farmers over tenants and sharecroppers.
- The Supreme Court struck down major New Deal programs like the AAA and NIRA, leading FDR to propose a court-packing plan.
- The video emphasizes the political and economic challenges faced during the New Deal era and its lasting impact on American history.
- Humorous commentary and historical context are used to engage viewers and explain complex topics.
Full Transcript — Download SRT & Markdown
Speaker John Green
That's the National Recovery Administration, by the way, not the National Rifle Association or the No Rodents Allowed Club, which I'm a card-carrying member of.
Speaker John Green
Did the New Deal end the depression? Spoiler alert, meh.
Speaker John Green
More controversially, did it destroy American freedom or expand the definition of liberty? In the end, was it a good thing?
Speaker John Green
Mr. Green, Mr. Green.
Speaker John Green
Yes.
Speaker John Green
Oh, me from the past, you are not qualified to make that statement.
Speaker John Green
What, I was just trying to be like provocative and controversial, isn't that what gets views?
Speaker John Green
Oh, you have the worst ideas about how to make people like you, but anyway, not everything about the New Deal was controversial, this is Crash Course, not TMZ.
Speaker John Green
The New Deal redefined the role of the federal government for most Americans, and it led to a realignment of the constituents in the Democratic Party, the so-called New Deal Coalition.
Speaker John Green
Good job with the naming there, historians.
Speaker John Green
And regardless of whether you think the New Deal meant more freedom for more people or was a plot by red-shirt wearing communists, the New Deal is extremely important in American history.
Speaker John Green
Wait a second, I'm wearing a red shirt, what are you trying to say about me, Stan?
Speaker John Green
As the owner of the means of production, I demand that you dock the wages of the writer who made that joke.
Speaker John Green
So after his mediocre response to the Great Depression, Herbert Hoover did not have any chance of winning the presidential election of 1932, but he also ran like he didn't actually want the job.
Speaker John Green
Plus, his opponent was Franklin Delano Roosevelt, who was as close to a born politician as the United States has ever seen, except for Kid President.
Speaker John Green
The phrase New Deal came from FDR's campaign, and when he was running, FDR suggested that it was the government's responsibility to guarantee every man a right to make a comfortable living, but he didn't say how he meant to accomplish this.
Speaker John Green
Like it wasn't going to come from government spending, since FDR was calling for a balanced budget and criticizing Hoover for spending so much.
Speaker John Green
Maybe it would somehow magically happen if we made alcohol legal again.
Speaker John Green
And one thing FDR did call for was an end to prohibition.
Speaker John Green
Which was a campaign promise he kept.
Speaker John Green
After three years of the Great Depression, many Americans seriously needed a drink.
Speaker John Green
And the government sought tax revenue, so no more prohibition.
Speaker John Green
FDR won 57% of the vote, and the Democrats took control of Congress for the first time in a decade.
Speaker John Green
While FDR gets most of the credit, he didn't actually create the New Deal or put it into effect.
Speaker John Green
It was passed by Congress.
Speaker John Green
So WTFDR was the New Deal?
Speaker John Green
Basically, it was a set of government programs intended to fix the depression and prevent future depressions.
Speaker John Green
There are a couple of ways historians conceptualize it.
Speaker John Green
One is to categorize the programs by their function.
Speaker John Green
This is where we see the New Deal described as three Rs.
Speaker John Green
The relief programs gave help, usually money, to poor people in need.
Speaker John Green
Recovery programs were intended to fix the economy in the short run and put people back to work.
Speaker John Green
And lastly, the Run DMC program was designed to increase the sales of Adidas shoes.
Speaker John Green
No, alas, it was reform programs that were designed to regulate the economy in the future to prevent future depressions.
Speaker John Green
Some of the programs, like Social Security, don't fit easily into one category.
Speaker John Green
And there are some blurred lines between recovery and reform.
Speaker John Green
Like how do you categorize the bank holiday and the Emergency Banking Act of March 1933, for example?
Speaker John Green
FDR's order to close the banks temporarily also created the FDIC, which insures individual deposits against future banking disasters.
Speaker John Green
By the way, we still have all that stuff.
Speaker John Green
But was it recovery because it helped the short-term economy by making more stable banks?
Speaker John Green
Or was it reform because federal deposit insurance prevents bank runs?
Speaker John Green
A second way to think about the New Deal is to divide it into phases, which historians, with their A number one naming creativity, call the First and Second New Deals.
Speaker John Green
This more chronological approach indicates that there has to be some kind of cause and effect thing going on, because otherwise, why would there be a Second New Deal if the first one worked so perfectly?
Speaker John Green
The First New Deal comprises Roosevelt's programs before 1935.
Speaker John Green
Many of which were passed in the first 100 days of his presidency.
Speaker John Green
It turns out that when it comes to getting our notoriously gridlocked Congress to pass legislation, nothing motivates like crisis and fear.
Speaker John Green
Stan, can I get the foreshadowing filter?
Speaker John Green
We may see this again.
Speaker John Green
So in a brief break from its trademark obstructionism, Congress passed laws establishing the Civilian Conservation Corps, which paid young people to build national parks.
Speaker John Green
The Agricultural Adjustment Act.
Speaker John Green
The Glass-Steagall Act, which barred commercial banks from buying and selling stocks.
Speaker John Green
And the National Industrial Recovery Act.
Speaker John Green
Which established the National Recovery Administration, which has lightning bolts in its claws.
Speaker John Green
The NRA was designed to be government planners and business leaders working together to coordinate industry standards for production, prices, and working conditions.
Speaker John Green
But that whole public-private cooperation idea wasn't much immediate help to many of these starving unemployed, so the 100 days reluctantly included the Federal Emergency Relief Administration to give welfare payments to people who were desperate.
Speaker John Green
All right, let's go to the Thought Bubble.
Speaker John Green
Roosevelt worried about people becoming dependent on relief handouts and preferred programs that created temporary jobs.
Speaker John Green
One section of the NIRA created the Public Works Administration, which appropriated $33 billion to build stuff like the Triborough Bridge.
Speaker John Green
So much for a balanced budget.
Speaker John Green
The Civil Works Administration launched in November 1933 and eventually employed 4 million people building bridges, schools, and airports.
Speaker John Green
Government intervention reached its highest point, however, in the Tennessee Valley Authority.
Speaker John Green
This program built a series of dams in the Tennessee River Valley to control floods, prevent deforestation, and provide cheap electric power to people in rural counties in seven southern states.
Speaker John Green
But despite all that sweet, sweet electricity, the TVA was really controversial because it put the government in direct competition with private companies.
Speaker John Green
Other than the NIRA, few acts were as contentious as the Agricultural Adjustment Act.
Speaker John Green
The AAA basically gave the government the power to try to raise farm prices by setting production quotas and paying farmers to plant less food.
Speaker John Green
This seemed ridiculous to the hungry Americans who watched as 6 million pigs were slaughtered and not made into bacon.
Speaker John Green
Wait, Stan.
Speaker John Green
6 million pigs?
Speaker John Green
But bacon is good for me.
Speaker John Green
Only property-owning farmers actually saw the benefits of the AAA, so most African-American farmers, who were tenants or sharecroppers, continued to suffer.
Speaker John Green
And the suffering was especially acute in Oklahoma, Texas, Kansas, and Colorado, where drought created the Dust Bowl.
Speaker John Green
All this direct government intervention in the economy was too much for the Supreme Court.
Speaker John Green
In 1936, the court struck down the AAA in U.S. v. Butler.
Speaker John Green
Earlier, in the Schechter Poultry case, aka the Sick Chicken case, finally a Supreme Court case with an interesting name, the court invalidated the NIRA because its regulations, quote, delegated legislative powers to the president and attempted to regulate local businesses that did not engage in interstate commerce.
Speaker John Green
Thanks, Thought Bubble.
Speaker John Green
So with the Supreme Court invalidating acts left and right, it looked like the New Deal was about to unravel.
Speaker John Green
FDR responded by proposing a law that would allow him to appoint new Supreme Court justices if sitting justices reached the age of 70 and failed to retire.
Speaker John Green
Now, this was totally constitutional, you can go ahead and look at the Constitution if Nicolas Cage hasn't already swiped it.
Speaker John Green
But it seemed like such a blatant power grab that Roosevelt's plan to, quote, pack the court, brought on a huge backlash.
Speaker John Green
Stop everything, I've just been informed that Nicolas Cage stole the Declaration of Independence, not the Constitution.
Speaker John Green
I want to apologize to Nick Cage himself and also everyone involved in the National Treasure franchise.
Speaker John Green
Which is truly a national treasure.
Speaker John Green
Anyway, in the end, the Supreme Court began upholding the New Deal laws.
Speaker John Green
Starting a new era of Supreme Court jurisprudence.
Speaker John Green
In which the government regulation of the economy was allowed under a very broad reading of the Commerce Clause.
Speaker John Green
Because really, isn't all commerce interstate commerce?
Speaker John Green
I mean, if I go to Jimmy John's, don't I exit the state of hungry and enter the state of satisfied?
Speaker John Green
Thus began the Second New Deal, shifting focus away from recovery and toward economic security.
Speaker John Green
Two laws stand out for their far-reaching effects here.
Speaker John Green
The National Labor Relations Act, also called the Wagner Act.
Speaker John Green
And the Social Security Act.
Speaker John Green
The Wagner Act guaranteed workers the right to unionize.
Speaker John Green
And it created a National Labor Relations Board to hear disputes over unfair labor practices.
Speaker John Green
In 1934 alone, there were more than 2,000 strikes, including one that involved 400,000 textile workers.
Speaker John Green
Oh, it's time for the Mystery Document.
Speaker John Green
Man, I wish there were a union to prevent me from getting electrocuted.
Speaker John Green
The rules here are simple.
Speaker John Green
I guess the author of the Mystery Document, and I'm usually wrong and get shocked.
Speaker John Green
Refusing to allow people to be paid less than a living wage preserves to us our own market, there is absolutely no use in producing anything if you gradually reduce the number of people able to buy even the cheapest products, the only way to preserve our markets is an adequate wage.
Speaker John Green
Oh, I mean, you usually don't make it this easy, but I'm going to guess that it's Franklin Delano Roosevelt.
Speaker John Green
Dang it.
Speaker John Green
Eleanor Roosevelt, Eleanor.
Speaker John Green
Of course it was Eleanor.
Speaker John Green
Ah.
Speaker John Green
The most important union during the 1930s was the Congress of Industrial Organizations.
Speaker John Green
Which set out to unionize entire industries like steel manufacturing and automobile workers.
Speaker John Green
In 1936, the United Auto Workers launched a new tactic called the sit-down strike.
Speaker John Green
Workers at the Fisher Body plant in Flint, Michigan simply stopped working, sat down, and occupied the plant.
Speaker John Green
Eventually, GM agreed to negotiate and the UAW won.
Speaker John Green
Union membership rose to 9 million people as, quote, CIO unions helped to stabilize a chaotic employment situation.
Speaker John Green
And offered members a sense of dignity and freedom.
Speaker John Green
That quote, by the way, is from our old buddy Eric Foner.
Speaker John Green
God, I love you, Foner.
Speaker John Green
And unions played an important role in shaping the ideology of the Second New Deal.
Speaker John Green
Because they insisted that the economic downturn had been caused by underconsumption.
Speaker John Green
And that the best way to combat the depression was to raise workers' wages so that they could buy lots of stuff.
Speaker John Green
The thinking went that if people experienced less economic insecurity, they would spend more of their money.
Speaker John Green
So there were widespread calls for public housing and universal health insurance.
Speaker John Green
And that brings us to the crowning achievement of the Second New Deal.
Speaker John Green
And or the crowning achievement of its communist plot, the Social Security Act of 1935.
Speaker John Green
Social Security included unemployment insurance, aid to the disabled, aid to poor families with children, and of course, retirement benefits.
Speaker John Green
It was and is funded through payroll taxes rather than general tax revenue.
Speaker John Green
And while state and local governments retained a lot of discretion over how benefits would be distributed, Social Security still represented a transformation in the relationship between the federal government and American citizens.
Speaker John Green
Like before the New Deal, most Americans didn't expect the government to help them in times of economic distress.
Speaker John Green
After the New Deal, the question was no longer if the government should intervene, but how it should.
Speaker John Green
For a while, the U.S. government under FDR embraced Keynesian economics.
Speaker John Green
The idea that the government should spend money, even if it means going into deficits, in order to prop up demand.
Speaker John Green
And this meant that the state was much more present in people's lives.
Speaker John Green
I mean, for some people, that meant relief or Social Security checks.
Speaker John Green
For others, it meant a job with the most successful government employment program, the Works Progress Administration.
Speaker John Green
The WPA didn't just build post offices, it paid painters to make them beautiful with murals.
Speaker John Green
It paid actors and writers to put together plays and ultimately employed more than 3 million Americans each year until it ended in 1943.
Speaker John Green
It also, by the way, paid for lots of photographers to take amazing photographs.
Speaker John Green
Which we can show you for free because they are owned by the government.
Speaker John Green
So I'm just going to keep talking about how great they are.
Speaker John Green
Oh, look at that one.
Speaker John Green
That's a winner.
Speaker John Green
Okay, equally transformative, if less visually stimulating, was the change that the New Deal brought to American politics.
Speaker John Green
The popularity of FDR and his programs brought together urban progressives, who would have been Republicans two decades earlier, with unionized workers, often immigrants, left-wing intellectuals, urban Catholics, and Jews.
Speaker John Green
FDR also gained the support of middle-class homeowners.
Speaker John Green
And he brought African-Americans into the Democratic Party.
Speaker John Green
Who was left to be a Republican, Stan?
Speaker John Green
I guess there weren't many, which is why FDR kept getting reelected until, you know, he died.
Speaker John Green
But fascinatingly, one of the biggest and politically most important blocks in the New Deal Coalition was white Southerners, many of whom were extremely racist.
Speaker John Green
Democrats had dominated in the South since the end of Reconstruction, you know, since the other party was the party of Lincoln.
Speaker John Green
And although Southern Democrats who'd been in Congress for so long became important legislative leaders.
Speaker John Green
In fact, without them, FDR never could have passed the New Deal laws.
Speaker John Green
But Southerners expected whites to dominate the government and the economy, and they insisted on local administration of many New Deal programs.
Speaker John Green
And that ensured that the AAA and the NLRA would exclude sharecroppers and tenant farmers and domestic servants, all of whom were disproportionately African-American.
Speaker John Green
So did the New Deal end the depression?
Speaker John Green
No.
Speaker John Green
I mean, by 1940, over 15% of the American workforce remained unemployed.
Speaker John Green
But then again, when FDR took office in 1933, the unemployment rate was at 25%.
Speaker John Green
Maybe the best evidence that government spending was working is that when FDR reduced government subsidies to farms and the WPA in 1937, unemployment immediately jumped back up to almost 20%.
Speaker John Green
And many economic historians believe that it's inaccurate to say that government spending failed to end the depression because in the end, at least according to a lot of economists.
Speaker John Green
What brought the depression to an end was a massive government spending program called World War II.
Speaker John Green
So given that, is the New Deal really that important?
Speaker John Green
Yes.
Speaker John Green
Because first, it changed the shape of the American Democratic Party.
Speaker John Green
African-Americans and union workers became reliable Democratic votes.
Speaker John Green
And secondly, it changed our way of thinking.
Speaker John Green
Like liberalism in the 19th century meant limited government and free market economics.
Speaker John Green
Roosevelt used the term to refer to a large, active state that saw liberty as, quote, greater security for the average man.
Speaker John Green
And that idea that liberty is more closely linked to security than it is to like freedom from government intervention is still really important in the way we think about liberty today.
Speaker John Green
No matter where they fall on the contemporary political spectrum, politicians are constantly talking about keeping Americans safe.
Speaker John Green
Also, our tendency to associate the New Deal with FDR himself points to what Arthur Schlesinger called the Imperial Presidency.
Speaker John Green
That is, we tend to associate all government policy with the president.
Speaker John Green
Like after Jackson and Lincoln's presidencies, Congress reasserted itself as the most important branch of the government.
Speaker John Green
But that didn't happen after FDR.
Speaker John Green
But above all that, the New Deal changed the expectations that Americans had of their government.
Speaker John Green
Now, when things go sour, we expect the government to do something.
Speaker John Green
We'll give our last words today to Eric Foner.
Speaker John Green
Who never phoners it in.
Speaker John Green
The New Deal, quote, made the government an institution directly experienced in Americans' daily lives.
Speaker John Green
And directly concerned with their welfare.
Speaker John Green
Thanks for watching.
Speaker John Green
I'll see you next week.
Speaker John Green
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Speaker John Green
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Speaker John Green
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Speaker John Green
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Speaker John Green
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Speaker John Green
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Speaker John Green
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Speaker John Green
Thanks so much for watching Crash Course.
Speaker John Green
And as we say in my hometown, don't forget to be awesome.
Topics:New DealFranklin D. RooseveltGreat DepressionCivilian Conservation CorpsAgricultural Adjustment ActTennessee Valley AuthorityFDICSupreme CourtU.S. HistoryCrashCourse
