How Did The New Deal Strengthen Or Weaken The Usa Capitalism
New Deal. The New Deal was the main plan with which Franklin Delano Roosevelt tried to solve the situation Americans were facing after the Wall Street crash, it is important to explain that even if at the time it was plotted the socialist and communist ideas were intended to be embraced by many countries throughout the world instead of the old liberalist ones, the New Deal differs and it is hard to catalogue it into one or another, because the teams that created the different parts of the New Deal belonged to different ideological currents, this caused in many occasions internal fights among the designers and executers and sometimes it resembled stagger, because it looked like it went into many directions at the same time, sometimes even contradictory ones.
New Deal aimed to solve or rescue three principal …show more content…
areas of the USA economy by:
a) Stabilize the U.S. financial system.
FDR first immediate task was to rescue the banks, by this he proposed that the federal government should inspect the different banks who were operating throughout the country in order to:
1. Reopen those that were sufficiently solvent.
2. Reorganize those that could be saved
3. Close those who were beyond repair.
FDR signed the “Securities Act” in May 27, 1933, which required corporations and stockbrokers to release accurate information about stocks to investors in order to prevent new shady frauds like the ones who led to the depression.
In June 1933 he signed the Glass-Steagall Act which created the Federal Deposit Insurance Corporation guaranteeing the savings of average citizens and preventing banks from engaging in investment banking.
Finally, Reconstruction Finance Corporation (RFC), Federal National Mortgage Association and the Federal Housing Administration (FHA) as well as Banking Act of 1935 made possible for millions of Americans to buy or renovate home.
Altogether these innovations represented a shift of economic power from the lower part of Manhattan where it had been for over a century to Washington D.C.
b) Provide relief and jobs to the suffering people
FDR created the Civilian Conservation Corps putting this way 300,000 young men to work in 1,200 camps planting trees, building bridges and cleaning beaches.
Other agency created to fight against unemployment in America was the Civil Work Administration, it spent almost 1 billion dollars on public work projects, including airports and roads, it used a very simple scheme where the federal government paid the workers directly, this made the program really efficient, however Roosevelt administration shut it down after only four months because of the huge costs involving it.
To help American agriculture Roosevelt asked the Congress to pass the Agricultural Adjustment Act (AAA), it aimed to provide aid to farmers’ income by offering cash incentives to the ones who agreed in reducing their production.
On the other hand, Farm Credit Association lent more than a billion dollars to families to save their farms from foreclosure, but perhaps nothing did more to rescue the farm family from isolation than the Rural Electrification Administration (REA) which brought electricity for the first time to millions of rural homes and with it conveniences as radios and washing machines
The last important player was the Tennessee Valley Authority (TVA), it aimed to marshal the natural resources from Virginia to the Mississippi River (this was the poorest region in the United States) and transform them into an engine of economic uplift by building dams and power plants that would bring jobs, electricity and flood control to the valley. By the end of the 30’s the TVA had brought millions of southern Americans electric power, roads and jobs in regions that previously had no phones, electric lights or stable employment.
c) Resuscitating American
Industry.
The centerpiece of his industrial recovery program was the National Industrial Recovery Act (NIRA) of June 16, 1933, NIRA intended national economic planning as opposed to individualistic and competitive, laissez-faire capitalism.
The NIRA created two new agencies, the Public Works Administration (PWA) and the National Recovery Administration (NRA). PWA, run by Secretary of the Interior Harold Ickes, had a budget of over $3 billion dollars. This agency oversaw the construction of large-scale public works and landmarks such as San Francisco's Golden Gate Bridge and New York City's Triborough Bridge, it hoped to stimulate the economy by creating jobs and, more important, by generating orders for materials that American industry produced.
National Recovery Administration (NRA) proposed a business-government partnership in which business leaders, under the watchful eye of the NRA, would draft fair codes of competition regulating prices and wages. The codes would also outlaw cutthroat practices, such as below-cost sales and child labor. Also section 7a of the NIRA guaranteed labor the right to organize and bargain collectively.
NRA signified FDR's belief that business, with some direction and support from the government could regulate itself. Unfortunately, enterprises decided to pay attention to the codes that fit their interests, and ignored the ones that did not serve their purposes. Small business owners complained that big businesses dominated the code-drafting process and looked to drive their smaller competitors out of the market. Labor unions enjoyed a new-found legitimacy symbolized by the millions of workers who joined, however they found that businesses ignored provisions that guaranteed worker's wages and hours. By the end of 1933, it was clear that the NRA was anything but a success.
Second wave of New Deal. After some minor inconveniences with the courts, some adjustments in the direction of the New Deal were taken, from these three major initiatives represented it: Works Progress Administration (WPA); the Wagner-Connery National Labor Relations Act (or the Wagner Act, for short); and the Social Security Act.
The WPA aimed to create employment for Americans not to give them money directly from the federal budget as a result of the completion of government works and projects. By 1937, three million Americans were receiving WPA checks for building schools, hospitals, airports and for pursuing cultural projects in theatre, music, literature, and history which making more probable this way that the activity of the WPA would create jobs for another Americans. Together with the PWA, the WPA transformed the face of the United States and brought hope to many people.
The National Youth Administration (NYA), an agency of the WPA, trained and employed hundreds of thousands of teenagers and made possible for younger people to study and work.
The Wagner-Connery National Labor Relations Act, guaranteed labor unions the right to organize and bargain collectively and established the National Labor Relations Board to enforce these rights. It also limited employer use of unfair labor practices, like blacklisting union organizers or unionized workers. Because of the legitimacy conferred on unions by the Wagner Act, the legislation came to be known as the "Magna Carta" for American labor unions.
The Social Security Act of 1935. included programs like Old Age Assistance (Title I), Old Age Insurance (Title II), Unemployment Insurance (Title III), Aid to Dependent Children (Title IV) and Aid to the Blind (Title V). Taken together, these programs represented a significant commitment to developing a welfare state in the United States. However, the programs and benefits of the Social Security Act were not distributed evenly among all Americans. Agricultural workers and domestic servants were not eligible for old-age insurance (what is now commonly referred to as social security); farm laborers also were ineligible for unemployment insurance. Likewise, since many of these Social Security programs were administered by state governments, the size of benefits varied widely, especially between the North and the South.
New Deal aimed to solve or rescue three principal …show more content…
areas of the USA economy by:
a) Stabilize the U.S. financial system.
FDR first immediate task was to rescue the banks, by this he proposed that the federal government should inspect the different banks who were operating throughout the country in order to:
1. Reopen those that were sufficiently solvent.
2. Reorganize those that could be saved
3. Close those who were beyond repair.
FDR signed the “Securities Act” in May 27, 1933, which required corporations and stockbrokers to release accurate information about stocks to investors in order to prevent new shady frauds like the ones who led to the depression.
In June 1933 he signed the Glass-Steagall Act which created the Federal Deposit Insurance Corporation guaranteeing the savings of average citizens and preventing banks from engaging in investment banking.
Finally, Reconstruction Finance Corporation (RFC), Federal National Mortgage Association and the Federal Housing Administration (FHA) as well as Banking Act of 1935 made possible for millions of Americans to buy or renovate home.
Altogether these innovations represented a shift of economic power from the lower part of Manhattan where it had been for over a century to Washington D.C.
b) Provide relief and jobs to the suffering people
FDR created the Civilian Conservation Corps putting this way 300,000 young men to work in 1,200 camps planting trees, building bridges and cleaning beaches.
Other agency created to fight against unemployment in America was the Civil Work Administration, it spent almost 1 billion dollars on public work projects, including airports and roads, it used a very simple scheme where the federal government paid the workers directly, this made the program really efficient, however Roosevelt administration shut it down after only four months because of the huge costs involving it.
To help American agriculture Roosevelt asked the Congress to pass the Agricultural Adjustment Act (AAA), it aimed to provide aid to farmers’ income by offering cash incentives to the ones who agreed in reducing their production.
On the other hand, Farm Credit Association lent more than a billion dollars to families to save their farms from foreclosure, but perhaps nothing did more to rescue the farm family from isolation than the Rural Electrification Administration (REA) which brought electricity for the first time to millions of rural homes and with it conveniences as radios and washing machines
The last important player was the Tennessee Valley Authority (TVA), it aimed to marshal the natural resources from Virginia to the Mississippi River (this was the poorest region in the United States) and transform them into an engine of economic uplift by building dams and power plants that would bring jobs, electricity and flood control to the valley. By the end of the 30’s the TVA had brought millions of southern Americans electric power, roads and jobs in regions that previously had no phones, electric lights or stable employment.
c) Resuscitating American
Industry.
The centerpiece of his industrial recovery program was the National Industrial Recovery Act (NIRA) of June 16, 1933, NIRA intended national economic planning as opposed to individualistic and competitive, laissez-faire capitalism.
The NIRA created two new agencies, the Public Works Administration (PWA) and the National Recovery Administration (NRA). PWA, run by Secretary of the Interior Harold Ickes, had a budget of over $3 billion dollars. This agency oversaw the construction of large-scale public works and landmarks such as San Francisco's Golden Gate Bridge and New York City's Triborough Bridge, it hoped to stimulate the economy by creating jobs and, more important, by generating orders for materials that American industry produced.
National Recovery Administration (NRA) proposed a business-government partnership in which business leaders, under the watchful eye of the NRA, would draft fair codes of competition regulating prices and wages. The codes would also outlaw cutthroat practices, such as below-cost sales and child labor. Also section 7a of the NIRA guaranteed labor the right to organize and bargain collectively.
NRA signified FDR's belief that business, with some direction and support from the government could regulate itself. Unfortunately, enterprises decided to pay attention to the codes that fit their interests, and ignored the ones that did not serve their purposes. Small business owners complained that big businesses dominated the code-drafting process and looked to drive their smaller competitors out of the market. Labor unions enjoyed a new-found legitimacy symbolized by the millions of workers who joined, however they found that businesses ignored provisions that guaranteed worker's wages and hours. By the end of 1933, it was clear that the NRA was anything but a success.
Second wave of New Deal. After some minor inconveniences with the courts, some adjustments in the direction of the New Deal were taken, from these three major initiatives represented it: Works Progress Administration (WPA); the Wagner-Connery National Labor Relations Act (or the Wagner Act, for short); and the Social Security Act.
The WPA aimed to create employment for Americans not to give them money directly from the federal budget as a result of the completion of government works and projects. By 1937, three million Americans were receiving WPA checks for building schools, hospitals, airports and for pursuing cultural projects in theatre, music, literature, and history which making more probable this way that the activity of the WPA would create jobs for another Americans. Together with the PWA, the WPA transformed the face of the United States and brought hope to many people.
The National Youth Administration (NYA), an agency of the WPA, trained and employed hundreds of thousands of teenagers and made possible for younger people to study and work.
The Wagner-Connery National Labor Relations Act, guaranteed labor unions the right to organize and bargain collectively and established the National Labor Relations Board to enforce these rights. It also limited employer use of unfair labor practices, like blacklisting union organizers or unionized workers. Because of the legitimacy conferred on unions by the Wagner Act, the legislation came to be known as the "Magna Carta" for American labor unions.
The Social Security Act of 1935. included programs like Old Age Assistance (Title I), Old Age Insurance (Title II), Unemployment Insurance (Title III), Aid to Dependent Children (Title IV) and Aid to the Blind (Title V). Taken together, these programs represented a significant commitment to developing a welfare state in the United States. However, the programs and benefits of the Social Security Act were not distributed evenly among all Americans. Agricultural workers and domestic servants were not eligible for old-age insurance (what is now commonly referred to as social security); farm laborers also were ineligible for unemployment insurance. Likewise, since many of these Social Security programs were administered by state governments, the size of benefits varied widely, especially between the North and the South.