SWK 300 Lecture Notes - Lecture 7: Mania, American Liberty League, Totalitarianism
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Social Service Systems 10/18/18
• Causes of the Great Depression
o Agricultural overproduction
o Industrial overproduction
o Unequal distribution of wealth
o Over-extension of credit
o International economic situation
• How Herbert Hoover Dealt with the Crisis:
o He played the game of confidence economics and just kept
saying: “Prosperity is right around the corner.”
• Voluntary Measures
o Hover eventually established two privately-funded
▪ The National Credit Association
▪ The Organization for Unemployment Relief
• Limited Government Intervention
o In the end, Hoover resorted to government intervention:
▪ The Reconstruction Finance Corp
▪ The Home Loan Bank Act
• Reasons for Ineffectiveness
o Hoover thought business should be self-regulating.
o He had a mania for a balanced budget.
o He lacked political finesse.
• Franklin D. Roosevelt’s Appeal
o In 1932, presidential election, FDR was perceived as a man of
o Hoover was viewed as a “do-nothing president.”
o Norman Thomas, the Socialist candidate, was viewed as a
o Results: a landslide for Democrats and a mandate to use
government as an agency for human welfare
• Situation When FDR Entered Office
o In March 1933, the country was virtually leaderless and the
banking system had collapsed.
• FDR Restored Confidence
o In his inaugural address, he said “The only thing we have to fear
is fear itself….”
o He promised vigorous leadership and bold action, called for
discipline and cooperation, expressed his faith in democracy,
and asked for divine protection and guidance.
• FDR’s Personal Qualities
o He was a practical politician who practiced the art of possible.
o He was a charismatic person who exhibited a warmth and
understanding of people.
o He knew how to handle press by focusing attention on
o He provided dynamic leadership in a time of crisis.
o He was willing to experiment.
• Purpose of the New Deal
• Sources of New Deal Ideas
o Brains Trust: specialists and experts, mostly college professors,
o New Economists: government spending, deficit spending and
public works, government should prime economic pump
o Roosevelt Cabinet: included conservatives, liberals, Democrats,
Republicans, inflationists, anti-inflationists – often conflicting,
compromising, blending ideas
• First New Deal (1933-1934)
o Political Position
o Primary aim
• National Recovery Act (NRA)
o Purpose: recovery of industry
o Created a partnership of business, labor and government to
attack the depression with such measures as price controls, high
wages, and codes of fair competition
• First Agricultural Adjustment Act (AAA)
▪ Paid farmers who agreed to reduce production of basic
crops such as cotton, wheat, tobacco, hogs, and corn
o Money came from a tax on processors such as flour millers and
meat packers who passed the cost on to the consumer