Changes

===The 1930s: Liberalism ascendant===

===The 1930s: Liberalism ascendant===

Deflationary policies initiated by the Federal Reserve led to a depression (1929-1934) under President Hoover. In 1933, President Franklin Roosevelt, a Democrat, wisely allowed a banking panic to run its course. A recovery of historic proportions followed, and liberalism received the credit. Roosevelt was overwhelmingly reelected in 1936 with a huge Congressional majority. In 1937, America suffered under its most left-wing government ever. There was a wave a labor unrest as the unions attempted to use "sit-down" strikes to gain control of industry. As a result, the economy slipped into a "Roosevelt depression" (1937-1938). At the end of the year, southern Democrats defected from Roosevelt's coalition to form the "Conservative Coalition" with Republicans and the "Second New Deal" was aborted. The Coalition was at first led by Senator Josiah W. Bailey of North Carolina, who issued a "[[Conservative Manifesto]]" in December 1937. In U.S. Senate, Vice President [[John Nance Garner]] caste a crucial vote against enlarging the Supreme Court with additional justices nominated by Roosevelt. In the 1938, Roosevelt tried unsuccessfully to purge the conservative Democrats who had defeated him. The Conservative Coalition dominated Congress until 1961. Despite Roosevelt's mismanagement of the economy, the Democrats continued to win elections by blaming Hoover.

Deflationary policies initiated by the Federal Reserve Board Chairman Benjamin Strong led to a depression in 1929-1934 under President Hoover.<ref>Roberts, Priscilla, "[http://richmondfed.org/publications/research/economic_quarterly/2000/spring/pdf/roberts.pdf Benjamin Strong, the Federal Reserve, and the Limits to Interwar American Nationalism]". Milton Friedman and Anna Jacobson

Schwartz unravelled the origin of the Depression in ''A Monetary History of the United States 1867–1960'' (Princeton: Princeton University Press, 1963), 282–284, 288.</ref> In 1933, Franklin Roosevelt, the newly elected Democratic president, wisely allowed a banking panic to run its course. A recovery of historic proportions followed. Liberalism and Roosevelt's "New Deal" got the credit, but the deleveraging of the banking system was almost certainly a more significant factor.

 

Roosevelt was overwhelmingly reelected in 1936 with a huge Congressional majority. In 1937, America suffered under its most left-wing government ever. There was a wave a labor unrest as the unions attempted to use "sit-down" strikes to gain control of industry. The largest of these strikes was against General Motors in Flint, Michigan. The strikes sent the economy reeling, and there was a "Roosevelt Recession" in 1937-1938. At the end of 1937, the southern Democrats defected from Roosevelt's coalition to form a "Conservative Coalition" with Republicans. The Coalition was at first led by Senator Josiah Bailey of North Carolina, who issued a "[[Conservative Manifesto]]" in December 1937. When a bill to enlarge the Supreme Court with additional justices nominated by Roosevelt was defeated, the planned "Second New Deal" had to be aborted. Despite Roosevelt's mismanagement of the economy, the Democrats could still win elections by blaming Hoover long after the former president had left the political stage. However, the Conservative Coalition continued to dominated Congress until 1961.

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