The New Deal

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The Great Depression in the 1930s was a fallout of the stock market crash of 1929. Till the 1930s, the role of government in the economy was minimal. The capitalist model envisaged a ‘laissez-faire’ economy’, wherein market forces would auto-correct implicit imbalances, with little need for government intervention. At best, the government played a facilitating role, rather than actively intervening in the economy. Herbert Hoover, who was the President when the stock market crashed in 1929, refused to actively intervene in the market economy. By 1933, there was massive unemployment, starvation, a large inventory of standing crops with no buyers, and a near-collapse of the banking system. Added to this was rampant corruption and crime. Franklin D. Roosevelt, who became President in 1933, initiated a slew of measures, clubbed under ‘the New Deal’, to recover faith in the economy, extend support to individuals, and reinvigorate the banking system and public institutions (Roosevelt Institute). The New Deal consisted of a host of programs. The Agriculture Adjustment Act actually paid farmers for cutting farm production, so that reduced supply would serve to raise prices of food grain. The Civilian Construction Corps was created in 1933 to provide work to people, by employing them to create trails and civil works in public parks. The Civil Works Administration was envisaged to create high paying jobs in the construction industry, but was shelved due to high cost to industry. To combat foreclosures on housing loans due to the Depression, the Federal Housing Administration was created to monitor mortgages and loans. This initiative was accompanied by creation of the Home Owner’s Loan Corporation, to assist in the refinancing of loans. The... ... middle of paper ... ...ps, and factory workers. Republicans were against the New Deal, as they favored reduced intervention of the government in the economy. Two prominent people who opposed the New Deal were Huey Long, a senator from Louisiana who wanted a more drastic and equitable redistribution of wealth, and Charles Coughlin, a Catholic priest who wanted higher wages than those envisaged by the New Deal (Gordon). Works Cited Gordon, Steven S. “Opponents of the New Deal”. DTMan.com. n.d. Web. 19 Mar 2014. Kelly, Martin. “Top 10 New Deal Programs”. AmericanHistory.About.com. n.d. Web. 19 March 2014. Powell, Jim. “How FDR’s New Deal Harmed Millions of Poor People”. Cato.org. 29 Dec 2003. Web. 19 March 2014. Roosevelt Institute. “The New Deal”. RooseveltInstitute.org. n.d. Web. 19 March 2014. Shmoop. “FDR's New Deal Summary & Analysis." Shmoop.com. 11 Nov. 2008. Web. 20 Mar. 2014.

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