The Impact of Franklin D. Roosevelt’s The New Deal on America

Franklin D. Roosevelt is a defining figure and, arguably, one of the most consequential Presidents in the history of the Unites States. He stepped up to the plate when America was facing its toughest hour, and forever changed the role that the Federal Government played in American society. His New Deal program revolutionized American politics and enjoyed considerable success even though it did not manage to fully heal the wounds that the Great Depression had left. Under his leadership, the President's duties expanded to encompass legislative power (drafter of policy) on top of the traditional executive power. The internationally isolated United States became a champion of freedom and a global trading superpower. The classic domestic laissez-faire policy was replaced by a competent and active welfare state. His project not only impacted the America of the 1930s and 1940s, but it also left an ever-lasting legacy that was later extended by the likes of Truman, Eisenhower, Kennedy, Johnson, and Nixon. FDR with his New Deal program, defined the era over which he presided. The New Deal had a tremendous effect on the American economy before WWII and for several decades that followed. In addition to the economic effects, it also had major political and social effects. A product of the Roosevelt era was the New Deal coalition, which kept the Democrats in power for almost half a century.

Firstly, we will begin by examining the effectiveness of Roosevelt policies in the short run. As soon as he took office, he closed the banks and promptly introduced the Emergency Banking Relief Bill, which authorized federal money to back up private banks that had failed as a result of the Depression. From the graphs in Figure 25.1, page 719, it is clear that this piece of legislation had an immediate and lasting effect, as we can see that the number of bank failures dropped from 4000 thousand to less than 200 since the introduction of the bill, and remained in those levels ever since. The National Industrial Recovery Act (NIRA) was created to limit competition while maintaining a balance between the growth rate of prices and wages. Additionally, we have the introduction of the Agricultural Adjustment Act (AAA), a piece of legislation designed to help the farmers who were hit the hardest from the Depression. In order to increase farm prices, the government would subsidize farmers who agreed to limit production. Again, from the graphs in Figure 25.1, page 719, we could infer that this piece of legislation produced a positive outcome as well, as we can see an upward trend of farm prices since the introduction of the law.

What is more, we have the introduction of the Emergency Relief Appropriation Act as part of the Second New Deal. It saw billions of dollars of deficit spending spent in numerous construction projects in order to lower the unemployment rate. It also established the several agencies like the Resettlement Administration, the Rural Electrification Administration, and the National Youth Administration, which were all designed to aid remote communities and young job seekers. The largest program funded by the Act was the Works Progress Administration (WPA), which employed millions of Americans in low-scale construction projects like building public buildings, bridges, roads, parks, playgrounds and much more. We also have the establishment of the Public Works Administration (PWA), which cashed in several billion dollars to massive construction projects like dams, airports, and railroads. From the graphs in Figure 25.1, page 719, it seems like this Act managed to temporarily reduce unemployment. Additionally, we have the introduction of the revolutionary Social Security Act which created a federal system to provide for social welfare of American citizens and its legacy continues up to this day.

It seems like the New Deal did indeed have a positive impact on the American economy, even though it did not completely resolve the crisis. According to the text, “it changed the American West more than any other region, as federally sponsored construction of dams and other public works projects reshaped the region’s economy and environment . New federal activism expanded to the West’s people as well. Over the past several decades, federal policy toward Native Americans, especially those on western Indian reservations, had been disastrous. The Indian Reorganization Act went a long way toward ending the forced assimilation of native peoples and restoring Indian lands to tribal ownership. It also gave federal recognition to tribal governments . The South was also impacted by the New Deal. Through the Tennessee Valley Authority, the government promoted economic development, helped bring electricity to rural areas, restored fields worn out from overuse, and fought the curse of malaria.”

Perhaps, other the economic and social impact that the New Deal had on American society, the biggest and most influential outcome of the New Deal was in the political sphere; it launched an era of big government and constant government mingling in domestic affairs. Franklin D. Roosevelt forged a coalition that included progressives from both sides of the political spectrum, farmers, blue and white collar workers, intellectuals, labor unions, white Southerners, and minority groups (African-Americans, Eastern Europeans, Jews); the coalition was called: “The New Deal Coalition,” and it had a tremendous influence in policy-making in America. It set the tone for the major part of the administrations that followed. We can see that the New Deal became a “Political Bible” for the likes of Harry Truman and Lyndon Johnson who used Roosevelt’s project as a cornerstone of their policy-making. On top of that, the new deal also served as inspiration for many Republican Presidents as well. President Eisenhower said that “it is almost impossible to roll back the new Deal policies without hurting many Americans.” The New Deal coalition is the answer of the Democratic Party domination that lasted for almost fifty years. Just like it was stated in the Duedney article, “While it is obvious that Truman, Kennedy, and Johnson were the heirs to this New Deal, Eisenhower and Nixon in truth have more in common with their Democratic contemporaries and with FDR than they do with contemporary radical conservatives . . . In the fractious give-and-take of American politics, it is easy to overlook the key fact that, at least from Truman though Nixon, American politics was centrist and that the center was the New Deal order at home and abroad.”

In his 1944 State of the Union address, President Roosevelt offered Americans a “Second Bill of Rights: the right to employment, healthcare, education, food, and housing.” This declaration of government obligation for the welfare its citizens became a central piece of postwar liberalism. After Roosevelt passed away, Vice President Truman became President. He aimed at extending the New Deal policies by preserving the prominent role of the federal government in providing welfare for its citizens, and by increasing government’s power in regulating the economy. His domestic program was called: “The Fair Deal.” In the face of the strong political opposition from the radical conservatives, and from his lack of popularity due to the Korean War, Truman failed to reach his goals. However, he managed to deliver in some parts of his liberal agenda. He banned racial discrimination in hiring practices and finally put an end to military segregation. Masterminded by the Roosevelt administration, and put into practice by the Truman administration the GI bill was yet another piece of legislation that showed the scale of government intervention in this period. According to the text, the GI bill “succeeded in keeping the flood of demobilized veterans from flooding the workplace after the war ended. It offered year-long unemployment benefits which allowed veterans to be absorbed gradually into civilian employment, and stipends to cover college tuition. This bill fostered the emergence of a national middle-class culture, as the number of well-educated or technically trained workers increased greatly.”