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The '''New Deal''' was a group of otherwise disjointed programs conducted by President [[Franklin D. Roosevelt]], a [[~~Democratic~~ Party|Democrat]], throughout the [[Great Depression]], especially from 1933-36. His program had three aspects: Relief, Recovery and Reform. It sought to provide immediate Relief for the millions of unemployed in the [[Great Depression]]. It was intended to promote Recovery of the economy to normal standards—a goal he did not fully achieve. It involved a series of Reforms, especially in the financial system and labor relations. The basic issue was how to deal with the severely damaged economy—and great social misery—caused by three years of the [[Great Depression]]. Conservatives endorsed parts of the '''First New Deal''' (the 1933 programs) and rejected the more radical '''Second New Deal''' (the 1934-35 programs).

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The '''New Deal''' was a group of otherwise disjointed programs conducted by President [[Franklin D. Roosevelt]], a [[Democrat Party|Democrat]], throughout the [[Great Depression]], especially from 1933-36. His program had three aspects: Relief, Recovery and Reform. It sought to provide immediate Relief for the millions of unemployed in the [[Great Depression]]. It was intended to promote Recovery of the economy to normal standards—a goal he did not fully achieve. It involved a series of Reforms, especially in the financial system and labor relations. The basic issue was how to deal with the severely damaged economy—and great social misery—caused by three years of the [[Great Depression]]. Conservatives endorsed parts of the '''First New Deal''' (the 1933 programs) and rejected the more radical '''Second New Deal''' (the 1934-35 programs).

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The New Deal was popular among voters leading to the formation of the [[New Deal Coalition]], which made the Democrats the majority party during the [[Fifth Party System]] into the 1960s. However a [[Conservative Coalition]] took control of Congress in 1937 and blocked nearly all additional programs; during the war years (1941–45) the conservatives successfully rolled back many of the relief efforts on the grounds they were no longer needed since full employment was achieved. The "reforms" that regulated the economy were mostly dropped in the deregulation era (1974–87), except for oversight of Wall Street by the [[SEC]], which conservatives approved because it increased investor confidence.

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The New Deal was popular among voters leading to the formation of the [[New Deal Coalition]], which made the Democrats the majority party during the [[Fifth Party System]] into the 1960s. However a [[Conservative Coalition]] took control of Congress in 1937 and blocked nearly all additional programs; during the war years (1941–45) the conservatives successfully rolled back many of the relief efforts on the grounds they were no longer needed since full employment was achieved. The "reforms" that regulated the economy were mostly dropped in the deregulation era (1974–87), except for oversight of Wall Street by the [[SEC]], which conservatives approved because it increased investor confidence.

The [[New Deal Coalition]] dominated national politics until it split apart in the 1960s. Ever since it has been the holy grail of liberals seeking to restore their former glory.

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==First and Second New Deals==

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Historians distinguish between the "First New Deal" of 1933, which had something for almost every group, and the "Second New Deal" (1935–36), which introduced [[class conflict]], especially between business and labor unions. The First New Deal (1933–34) included many "alphabet agencies", notably ([[AAA]], [[CCC]], [[FERA]], CWA, [[FHA]],<ref>see [http://www.fha.com/fha_loans.cfm Federal Housing Administration]</ref> [[FDIC]],<ref>See [http://www.fdic.gov/ FDIC - Federal Deposit Insurance Corporation]</ref> [[NRA]], [[PWA]], [[TVA]], [[SEC]]).<ref>See [http://www.sec.gov/about/whatwedo.shtml SEC - U.S. Securities and Exchange Commission]</ref>

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==Foreign policy==

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see [[World Economic Conference of 1933]]

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In foreign policy the New Deal pursued isolationism, set in motion by Roosevelt's "bombshell message" to the [[World Economic Conference of 1933]] which ended efforts to stabilize international exchange rates. Roosevelt—acting against the advice of his top aides—feared that cooperation with major nations would limit his abilities to manipulate the money supply and end the [[deflation]] that was a crippling element of the depression. The major nations were appalled. Nazi Germany, which promoted autarchy, rejoiced for it gained a free hand to expand its economic power across the globe. A series of Neutrality Laws (see [[Neutrality Act]]) were passed that prohibited American business from selling munitions to nations at war.

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In foreign policy the New Deal pursued isolationism, set in motion by Roosevelt's "bombshell message" to the [[World Economic Conference of 1933]] which ended efforts to stabilize international exchange rates. Roosevelt—acting against the advice of his top aides—feared that cooperation with major nations would limit his abilities to manipulate the money supply and end the [[deflation]] that was a crippling element of the depression. The major nations were appalled. Nazi Germany, which promoted autarchy, rejoiced for it gained a free hand to expand its economic power across the globe. A series of Neutrality Laws (see [[Neutrality Act]]) were passed that prohibited American business from selling munitions to nations at war.

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There was a peculiar affinity between the New Deal and the European dictatorships that on occasion extended even to [[fascism]] and [[national socialism]] Early on, FDR referred to [[Benito Mussolini]] as “the admirable Italian gentlemen,” stating to his ambassador in Rome, “I am much interested and deeply impressed by what he has accomplished." Mussolini, in turn, was flattered by what he saw as the New Deal’s copying of his own corporate state, in the [[National Recovery Act]] (NRA) and other early measures. Even [[Hitler]] had kind words at first for Roosevelt’s “dynamic” leadership, stating that “I have sympathy with President Roosevelt because he marches straight to his objective over Congress, over lobbies, over stubborn bureaucracies.”

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There was a peculiar affinity between the New Deal and the European dictatorships that on occasion extended even to [[fascism]] and [[national socialism]]. Early on, FDR referred to [[Benito Mussolini]] as “the admirable Italian gentlemen,” stating to his ambassador in Rome, “I am much interested and deeply impressed by what he has accomplished." Mussolini, in turn, was flattered by what he saw as the New Deal’s copying of his own corporate state, in the [[National Recovery Act]] (NRA) and other early measures. Even [[Hitler]] had kind words at first for Roosevelt’s “dynamic” leadership, stating that “I have sympathy with President Roosevelt because he marches straight to his objective over Congress, over lobbies, over stubborn bureaucracies.”

What linked the New Deal to the regimes in Italy and Germany, as well as in Soviet Russia, was their fellowship in the wave of [[collectivism]] that was sweeping the world. In an essay published in 1933, [[John Maynard Keynes]] observed this trend, and expressed his sympathy with the “variety of politico-economic experiments” under way in the continental dictatorships as well as in the United States. All of them, he gloated, were turning their backs on the old, discredited [[laissez-faire]] and embracing national planning in one form or another.

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==Relief, Recovery, and Reform==

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The New Deal had three components: direct relief, economic recovery, and financial reform; these were also called the 'Three Rs'.

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By 1934, the Supreme Court began declaring significant parts of the New Deal unconstitutional. The programs were quickly fixed to pass muster, but in 1937 Roosevelt stunned the nation by a surprise proposal to pack the Supreme Court by adding five new justices. The proposal failed and Roosevelt permanently alienated many conservative Democrats; however the Supreme Court started upholding New Deal laws. Justices then started retiring, allowing Roosevelt to select a majority of the Court. By 1942, the Supreme Court had almost completely abandoned its "judicial activism" of striking down congressional laws. The Supreme Court ruled in ''[[Wickard v. Filburn]]'' that the [[Commerce Clause]] covered almost all such regulation allowing the necessary expansion of federal power to make the New Deal "constitutional".

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Two old words now took on new meaning. "Liberal" no longer referred to [[classical liberalism]] but now meant a supporter of the New Deal; conservative meant upholding the Constitution. Whether the New Deal was successful is usually approached not as a historical problem, but as a current debate whether the New Deal should be a model for government today, complicated by its conflicting goals of promising something for nothing for everyone. Liberals continue to battle conservatives. The term "New Deal" is also used to describe the [[New Deal Coalition]] that Roosevelt created to support his programs, including the ~~Democratic party~~, big city machines, labor unions, Catholic and Jewish minorities, African Americans, farmers, and most Southern whites.

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Two old words now took on new meaning. "Liberal" no longer referred to [[classical liberalism]] but now meant a supporter of the New Deal; conservative meant upholding the Constitution. Whether the New Deal was successful is usually approached not as a historical problem, but as a current debate whether the New Deal should be a model for government today, complicated by its conflicting goals of promising something for nothing for everyone. Liberals continue to battle conservatives. The term "New Deal" is also used to describe the [[New Deal Coalition]] that Roosevelt created to support his programs, including the Democrat Party, big city machines, labor unions, Catholic and Jewish minorities, African Americans, farmers, and most Southern whites.

==The Origins of the New Deal==

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On the 29th of October, 1929, the flight of capital from the over valued U.S. stock market set off a downward spiral in employment and growth in every part of the globe known as the [[Great Depression]]. Although statistics were not kept it was later estimated unemployment in the U.S. increased from 4% to 25% between 1929 and 1933 while manufacturing output plunged by approximately a third. Gross private domestic investment, which includes construction and inventories, shrank from $16.2 billion to $1.4 billion.<ref>In 1958 constant dollars. Source: Board of Governors of the Federal Reserve System, ''Federal Reserve Bulletin'', June 1973, p. A68.</ref> Prices everywhere fell, making the burden of the repayments of debts much harder. Heavy industry, mining, lumbering and agriculture were hard hit. The impact was much less severe in white collar and service sectors, but every city and state was hit hard.

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Upon accepting the 1932 [[U.S. Democratic Party, history|~~Democratic~~]] nomination for president, Roosevelt promised "a new deal for the American people."<ref>The phrase came from the title of popular writer Stuart Chase's book ''A New Deal'' published earlier in 1932.</ref> Roosevelt entered office with no single ideology or plan for dealing with the depression. He was willing to try anything, and, indeed, in the "First New Deal" (1933–34) virtually every organized group (except the Socialists and Communists) gained much of what they demanded. This "First New Deal" thus was self-contradictory, pragmatic, and experimental. Government spending propelled the economy to recover from the deep pit of 1932, and started heading upward again until 1937, when the over emphasis on consumption of capital resources plunged the economy into the [[Recession of 1937]] and sent unemployment back to 1934 levels. Whether the New Deal was responsible for the recovery, or whether it even slowed the recovery, is a subject of debate.

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Upon accepting the 1932 [[U.S. Democratic Party, history|Democrat]] nomination for president, Roosevelt promised "a new deal for the American people."<ref>The phrase came from the title of popular writer Stuart Chase's book ''A New Deal'' published earlier in 1932.</ref> Roosevelt entered office with no single ideology or plan for dealing with the depression. He was willing to try anything, and, indeed, in the "First New Deal" (1933–34) virtually every organized group (except the Socialists and Communists) gained much of what they demanded. This "First New Deal" thus was self-contradictory, pragmatic, and experimental. Government spending propelled the economy to recover from the deep pit of 1932, and started heading upward again until 1937, when the over emphasis on consumption of capital resources plunged the economy into the [[Recession of 1937]] and sent unemployment back to 1934 levels. Whether the New Deal was responsible for the recovery, or whether it even slowed the recovery, is a subject of debate.

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The New Deal drew from many different sources over the previous half-century. Some New Dealers, led by [[Thurman Arnold]], went back to the anti-monopoly tradition in the ~~Democratic party~~ that stretched back a century. Monopoly was bad for America, [[Louis Brandeis]] kept insisting, because it produced waste and inefficiency. However, the anti-monopoly group never had a major impact on New Deal policy.

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The New Deal drew from many different sources over the previous half-century. Some New Dealers, led by [[Thurman Arnold]], went back to the anti-monopoly tradition in the Democrat Party that stretched back a century. Monopoly was bad for America, [[Louis Brandeis]] kept insisting, because it produced waste and inefficiency. However, the anti-monopoly group never had a major impact on New Deal policy.

From the Wilson administration, other New Dealers, such as [[Hugh Samuel Johnson|Hugh Johnson]] of the [[National Recovery Administration|NRA]], were shaped by efforts to mobilize the economy for [[World War I]], They brought ideas and experience from the government controls and spending of 1917-18. And from the policy experiments of the 1920s, New Dealers picked up ideas from efforts to harmonize the economy by creating cooperative relationships among its constituent elements. Roosevelt brought together a so-called "[[Brain Trust]]" of academic advisers to assist in his recovery efforts. They sought to introduce extensive government intervention in the form of spending and regulation instead of allowing self-correcting mechanisms to run its course. New Dealers such as Donald Richberg, as the replacement head of the NRA, said "A nationally [[planned economy]] is the only salvation of our present situation and the only hope for the future."<ref name="Leuchtenburg p. 58">Leuchtenburg p. 58</ref> Historian Clarence B. Carson says:

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[[File:Newdealstamp.png|thumb|280px|1998 US stamp celebrates alphabet agencies of New Deal]]

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The New Deal faced some very vocal [[American conservatism|conservative]] opposition. The first organized opposition in 1934 came from the [[American Liberty League]] led by Democrats such as 1924 and 1928 presidential candidates [[John W. Davis]] and [[Al Smith]]. There was also a large loose grouping of opponents of the New Deal who have come to be known as the [[Old Right (United States)|Old Right]] which included politicians, intellectuals, writers, and newspaper editors of various philosophical persuasions including classical liberals, conservatives, Democrats and Republicans.

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The New Deal faced some very vocal [[American conservatism|conservative]] opposition. The first organized opposition in 1934 came from the [[American Liberty League]] led by Democrats such as 1924 and 1928 presidential candidates [[John W. Davis]] and [[Al Smith]]. There was also a large loose grouping of opponents of the New Deal who have come to be known as the [[Old Right (United States)|Old Right]] which included politicians, intellectuals, writers, and newspaper editors of various philosophical persuasions including classical liberals, conservatives, Democrats and Republicans.

===World Comparisons===

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Britain was unable to adopt major programs to stop its depression. That led to collapse of the Labour government and replacement in 1931 by a National coalition (predominantly Conservative). There was no equivalent "New Deal" government intervention in Britain, which allowing self-correcting market mechanism to operate, brought about a higher level of sustained employment and recovered more quickly from the Depression. In Canada, Conservative Prime Minister [[R. B. Bennett]] pushed for a program similar to the New Deal but failed to get it enacted and was defeated for reelection by the Liberals under [[William Mackenzie King]]. In New Zealand a series of economic and social policies similar to the New Deal were adopted after the election of the first Labour Government in 1935 [http://www.teara.govt.nz/1966/H/HistoryEconomic/LabourPolicy/en].

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==The First Hundred Days==

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Having won a decisive victory in 1932, and with his party having decisively swept Congressional elections across the nation, Roosevelt entered office with unprecedented political capital. Many Congressmen had their favorite projects, like the TVA plan of Senator [[George Norris]], which the administration adopted and treated as its own. Finally there were numerous Hoover plans that he could not get passed but were ready to go, such as the emergency banking laws. Americans of all political persuasions were demanding immediate action, and Roosevelt responded with a series of new programs in the “first hundred days” of the administration.

===The "Bank Holiday" and the Emergency Banking Act===

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Roosevelt hurled the blame at businessmen and bankers with religious rhetoric: "Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men....The money changers have fled from their high seats in the temple of our civilization."

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===Economic growth===

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The economy hit rock bottom in March 1933 and now it started to expand. As historian Broadus Mitchell notes, "Most indexes worsened until the summer of 1932, which may be called the low point of the depression economically and psychologically."<ref>Mitchell p 404.</ref> Economic indicators show the economy reached nadir in the first days of March, then began a steady, sharp upward recovery. Thus the Federal Reserve Index of Industrial Production hit its lowest point of 52.8 in July 1932 (with 1935-39 = 100) and was practically unchanged at 54.3 in March 1933; however by July 1933, it reached 85.5, a dramatic rebound of 57% in four months. Growth was steady and strong until 1937 but job creation continued to lag. By 1941, personal consumption expenditures - despite population increase - were virtually unchanged since 1929, reflecting a general impoverishment of the nation.<ref>Personal consumption expenditures in the aggregate for 1929 were 77.2 billion, 45.8 billion in 1933, and 80.6 billion in 1941. Measured in constant 1958 dollars. Source: Board of Governors of the Federal Reserve System, ''Federal Reserve Bulletin'', June 1973, p. A68.</ref>

===The Economy Act===

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The [[Economy Act]], drafted by Budget Director [[Lewis Douglas]] was passed on March 20, 1933. The act proposed to balance the "regular" (non-emergency) federal budget by cutting the salaries of government employees and cutting pensions to veterans by 40 percent. It saved $500 million a year and reassured deficit hawks such as Douglas that the new president was fiscally conservative. Roosevelt argued there were two budgets: the "regular" federal budget, which he balanced, and the "emergency budget," which was needed to defeat the depression. It was imbalanced on a temporary basis.

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These blank check appropriations led to the subservience of Congress and the rise of bureaucracy. Under the Constitution, Congress alone can write laws. The executive branch only enforces the law. But Congress now began to pass laws that created large bureaus empowered to make [[regulation]]s or directives with a wide range of authority. Under these laws the executive bureau became a quasi-legislative body authorized by Congress to make regulations which had the effect of law. This practice grew until Washington was filled with a [[New Deal agencies|vast array of bureaus]] that were making laws, enforcing them and actually interpreting them through [[administrative law court]]s set up within the bureaus, abolishing on a large scale the [[separation of powers]] between executive, legislative and judicial processes.

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At least until [[John F. Kennedy]] in 1960, New Dealers never fully recognized the [[Keynesian economics|Keynesian]] argument for government spending as a vehicle for recovery. Most economists of the era, along with [[Henry Morgenthau, Jr.|Henry Morgenthau]] of the Treasury Department, rejected Keynesian solutions and favored balanced budgets.

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At least until [[John F. Kennedy]] in 1960, New Dealers never fully recognized the [[Keynesian economics|Keynesian]] argument for government spending as a vehicle for recovery. Most economists of the era, along with [[Henry Morgenthau, Jr.|Henry Morgenthau]] of the Treasury Department, rejected Keynesian solutions and favored balanced budgets.

===Minimum wage===

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Shortly after his election FDR forced the Congress to scrap minimum wage and maximum hour legislation which the Senate had already passed.<ref>''The Roosevelt Myth'', John T. Flynn, Fox and Wilkes, 1948, Book 2, Ch. 3., [http://www.rooseveltmyth.com/book/fdrmyth_Chapter_Three___The_Forgotten_De.htm ''The Forgotten Deprssion''].</ref>

===The Farm Programs ===

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Roosevelt was keenly interested in farm issues, and emphasized that true prosperity would not return until farming was prosperous. Many different programs were directed at farmers. The first hundred days produced a federal program to protect commercial farmers from the uncertainties of the depression through subsidies and production controls. This program began with the [[Agricultural Adjustment Act]], creating the [[Agricultural Adjustment Administration]] (AAA), which Congress passed in May 1933.

[[File:Farm-bill.jpg|thumb|350px|Would FDR's farm plan steamroller over traditional American values?]]

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The AAA reflected the demands of leaders of major farm organizations, especially the Farm Bureau, and reflected debates among Roosevelt's farm advisers such as [[Henry A. Wallace]], [[Rexford Tugwell]], and [[George Peek]]. The AAA implemented a provision for crop reductions known as the "domestic allotment" system of the act. Under this system producers of corn, cotton, dairy products, hogs, rice, tobacco, and wheat would decide on production limits for their crops. The AAA would then pay land owners subsidies for leaving some of their land idle with funds provided by a new tax on food processing. Farm prices were to be subsidized up to the point of parity. Some crops were ordered to be destroyed and some livestock slaughtered to raise the prices farmers received. The idea was that the less produced, the higher the price, and the farmer would benefit. Farm incomes increased significantly in the first three years of the New Deal. A Gallup Poll revealed that a majority of the American public opposed the AAA; conservatives complained that price fixing was dangerously distorting the economy.

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The AAA reflected the demands of leaders of major farm organizations, especially the Farm Bureau, and reflected debates among Roosevelt's farm advisers such as [[Henry A. Wallace]], [[Rexford Tugwell]], and [[George Peek]]. The AAA implemented a provision for crop reductions known as the "domestic allotment" system of the act. Under this system producers of corn, cotton, dairy products, hogs, rice, tobacco, and wheat would decide on production limits for their crops. The AAA would then pay land owners subsidies for leaving some of their land idle with funds provided by a new tax on food processing. Farm prices were to be subsidized up to the point of parity. Some crops were ordered to be destroyed and some livestock slaughtered to raise the prices farmers received. The idea was that the less produced, the higher the price, and the farmer would benefit. Farm incomes increased significantly in the first three years of the New Deal. A Gallup Poll revealed that a majority of the American public opposed the AAA; conservatives complained that price fixing was dangerously distorting the economy.

The milk program was especially problematic—and indeed still is in the 21st century, with state governments having a major role.

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===Tenant farmers and sharecroppers===

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Roosevelt, Henry Wallace and many New Dealers were highly sympathetic to the marginal farmers who lived on the land in severe poverty, especially in the South. Major programs addressed to their needs included the [[Resettlement Administration]] (RA), the [[Farm Security Administration]] (FSA), the [[Rural Electrification Administration]] (REA), the [[Tennessee Valley Authority]] (TVA) and rural welfare projects sponsored by the WPA, NYA, Forest Service and CCC, including school lunches, building new schools, opening roads in remote areas, reforestation, and purchase of marginal lands to enlarge national forests.

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Roosevelt, ~~henry~~ Wallace and many New Dealers were highly sympathetic to the marginal farmers who lived on the land in severe poverty, especially in the South. Major programs addressed to their needs included the [[Resettlement Administration]] (RA), the [[Farm Security Administration]] (FSA), the [[Rural Electrification Administration]] (REA), the [[Tennessee Valley Authority]] (TVA) and rural welfare projects sponsored by the WPA, NYA, Forest Service and CCC, including school lunches, building new schools, opening roads in remote areas, reforestation, and purchase of marginal lands to enlarge national forests.

===Relief ===

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The administration launched a series of relief measures and welfare agencies to give meaningful jobs to the unemployed, especially unskilled laborers. The largest programs were the [[Civilian Conservation Corps]] (CCC), the [[Civil Works Administration]] (CWA), the [[Federal Emergency Relief Administration]] (FERA), the [[National Youth Administration]] (NYA), and above all, the [[Works Progress Administration]] (WPA). The WPA employed a maximum of 3.3 million in November 1938.<ref>According to Nancy Rose' Put to Work.</ref> However, even at this level of WPA employment, unemployment (counting WPA as employment) was still 12.5% in 1938 according to figures from Micheal Darby.<ref>Darby, Michael R.''Three and a half million U.S. Employees have been mislaid: or, an Explanation of Unemployment, 1934-1941.'' Journal of Political Economy 84, no. 1 (1976): 1-16.</ref> All these emergency programs were terminated in 1942-43, when unemployment had vanished due to World War II related employment offers.

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===Repeal of prohibition===

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In a measure that garnered substantial popular support, Roosevelt, in his first days of office, moved to put to rest one of the most divisive cultural issues of the 1920s. He supported and signed a bill to legalize the manufacture and sale of beer, an interim measure pending the repeal of [[Eighteenth Amendment to the United States Constitution|Prohibition]], for which a constitutional amendment (the Twenty-first) was already in process. The amendment was ratified later in 1933. Prohibition had been a rather unpopular amendment and led to bootlegging, the illegal manufacture (or importation) and sale of liquor within the United States.

===Communists in the New Deal===

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The New Deal was infiltrated with [[Communists]].<ref>The [[Moynihan Commission on Government Secrecy]] wrote in its final report, "The first fact is that a significant Communist conspiracy was in place in Washington, New York, and Hollywood." [http://www.fas.org/sgp/library/moynihan/appa6.html Moynihan Commission on Government Secrecy, Appendix A 6. The Experience of The Bomb]; the report also included, "At this distance it is difficult to conceive the intensity of Communist conviction in the 1930s....Looking back, however, we see more clearly the dilemma ... By 1950... the United States Government possessed information which the American public desperately needed to know: proof that there had been a serious attack on American security by the [[Soviet Union]], with considerable assistance from what was, indeed, an “enemy within.” The fact that we knew this was now known to, or sufficiently surmised by, the Soviet authorities. Only the American public was denied this information. [http://www.fas.org/sgp/library/moynihan/appa7.html Moynihan Commission on Government Secrecy, Appendix A 7. The Cold War]</ref> [[Harold Ware]] was a [[Communist Party USA]] (CPUSA) official in the AAA and founded the [[Ware group]]. The group consisted of young lawyers and economists, had about 75 members in 1934 and was divided into about eight cells. The AAA was later found [[unconstitutional]], but by that time the Communist operatives had established jobs in government employment. [[Alger Hiss]], [[Lee Pressman]], [[John Abt]], [[Charles Kramer]], [[Nathan Witt]], [[Henry Collins]], [[George Silverman]], [[Marion Bachrach]], [[John Herrmann]], [[Nathaniel Weyl]], [[Donald Hiss]] and [[Victor Perlo]] were all members. [[Harry Dexter White]], who was involved in the most auspicious policy [[subversion (political)|subversion]] as Director of the Division of Monetary Research in the [[Treasury Department]], was also affiliated with the group. The Ware group was the CPUSA's covert arm at this time. Each of these agents not only provided classified documents to Soviet intelligence, but was involved in political influence operations as well.

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{{Cquote|I was told they believe that by thwarting our then evident economic recovery, they would be able to prolong the country’s destitution until they had demonstrated to the American people that the Government must operate business and commerce. By propaganda, they would destroy institutions making long term capital loans—and then push Uncle Sam into making these loans. Once Uncle Sam becomes our financier, he must also follow his money with control and management.<ref>Hearings, House Select Committee To Investigate Certain Statements of Dr. William Wirt, 73rd Congress, 2nd Session, April 10 and 17, 1934.</ref><ref>''Dr Wirt faces the cameras and tells all'', Literary Digest v. 117 (April 21, 1934) p. 7.</ref><ref>FBI Silvermaster file [http://education-research.org/PDFs/Silvermaster053.pdf Volume 53 June 1946], p. 78 pdf.</ref>}}

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Outside government, the far ~~left~~ was exerting considerable influence in the labor movement (it dominated the new [[Congress of Industrial Organizations|CIO]]), and was building a network of membership organizations. Thus the [[American League Against War and Fascism]] was formed in 1933 and, in 1937, became the American League for Peace and Democracy. There followed the [[American Youth Congress]], 1934; League of American Writers, 1935; National Negro Congress, 1936; and the American Congress for Democracy and Intellectual Freedom, 1939. All had significant Stalinist connections, and fought furious battles with the anti-Communist left.<ref>

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Outside government, the far-Left was exerting considerable influence in the labor movement (it dominated the new [[Congress of Industrial Organizations|CIO]]), and was building a network of membership organizations. Thus the [[American League Against War and Fascism]] was formed in 1933 and, in 1937, became the American League for Peace and Democracy. There followed the [[American Youth Congress]], 1934; League of American Writers, 1935; National Negro Congress, 1936; and the American Congress for Democracy and Intellectual Freedom, 1939. All had significant Stalinist connections, and fought furious battles with the anti-Communist left.<ref>

Leuchtenburg (1963) 281-3; Irving Howe, Lewis A. Coser, and Julius Jacobson, ''The American Communist Party: a critical history, 1919-1957'' (1957); James R. Barrett, ''William Z. Foster and the Tragedy of American Radicalism'' (2002).</ref>

===Puerto Rico===

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A separate set of programs operated in [[Puerto Rico]], headed by the Puerto Rico Reconstruction Administration. It promoted [[land reform]] and helped small farms; it set up farm cooperatives, promoted crop diversification, and helped local industry. The Puerto Rico Reconstruction Administration was directed by [[Ernest Gruening]] from 1935 to 1937.

==Reform: (NIRA)==

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===Business, labor, and government cooperation===

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Besides programs for immediate 'relief' the New Deal embarked quickly on an agenda of long-term 'reform' aimed at avoiding another depression. The New Dealers responded to demands to inflate the currency by a variety of means. Another group of reformers sought to build consumer and farmer co-ops as a counterweight to big business. The consumer co-ops did not take off, but the [[Rural Electrification Administration]] used co-ops to bring electricity to rural areas. (As of 2007, many still operate.)

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===The NRA "Blue Eagle" campaign===

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New Deal economists argued that cut-throat competition had hurt many businesses and that with prices having fallen 20% and more, "deflation" exacerbated the burden of debt and would delay recovery. They rejected a strong move in Congress to limit the workweek to 30 hours. Instead their remedy, designed in cooperation with the Chamber of Commerce (representing big business), was the NIRA. It included billions in stimulus funds for the PWA to spend, and sought to raise prices, give more bargaining power for unions (so the workers could purchase more) and reduce harmful competition.<ref>Unions in 1933-35 were small and weak; they took off after 1935.</ref> At the center of the NIRA was the National Recovery Administration (NRA), headed by former General [[Hugh Samuel Johnson]], who had been a senior economic official in World War I. Johnson called on every business establishment in the nation to accept a stopgap "blanket code": a minimum wage of between 20 and 45 cents per hour, a maximum workweek of 35 to 45 hours, and the abolition of [[child labor]]. Johnson and Roosevelt contended that the "blanket code" would raise consumer purchasing power and increase employment.<ref>Arthur Schlesinger, Jr. ''The Coming of the New Deal'' (1959), 87-135</ref>

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==Second New Deal==

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===Second New Deal Enacted 1935===

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In the spring of 1935, responding to the setbacks in the Court, a new skepticism in Congress, and the growing popular clamor for more dramatic action, the administration proposed or endorsed several important new initiatives. Historians refer to them as the "Second New Deal" and note that it was more radical, more pro-labor and anti-business than the "First New Deal" of 1933-34. The [[National Labor Relations Act]], also known as the '''Wagner Act''', revived and strengthened the protections of collective bargaining contained in the original (and now unconstitutional) NIRA. The result was a tremendous growth of membership in the labor unions comprising the [[American Federation of Labor]]. Labor thus became a major component of the New Deal political coalition.

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===Defeat: Court Packing and Executive Reorganization===

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Roosevelt, however, emboldened by the triumphs of his first term, set out in 1937 to consolidate authority within the government in ways that provoked powerful opposition. Early in the year, he asked Congress to [[Judiciary Reorganization Bill of 1937|expand the number of justices on the Supreme Court]] so as to allow him to appoint members sympathetic to his ideas and hence tip the ideological balance of the Court. This proposal provoked a storm of protest.

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In the long run the Court shifted to the ~~left~~. Justice [[Owen Josephus Roberts|Owen Roberts]], switched positions and began voting to uphold New Deal measures, effectively creating a liberal majority in ''[[West Coast Hotel Co. v. Parrish]]'' and ''[[National Labor Relations Board v. Jones & Laughlin Steel Corporation]]'' thus departing from the ''[[Lochner v. New York]]'' era and giving the government more power in questions of economic policies. Journalists called this change "[[the switch in time that saved nine]]." Recent scholars have noted that since the vote in Parrish took place several months before the court-packing plan was announced, other factors, like evolving jurisprudence, must have contributed to the Court's swing. The opinions handed down in Spring 1937, favorable to the government, also contributed to the downfall of the plan. In any case, the "court packing plan," as it was known, did lasting political damage to Roosevelt and was finally rejected by Congress in July.

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In the long run the Court shifted to the Left. Justice [[Owen Josephus Roberts|Owen Roberts]], switched positions and began voting to uphold New Deal measures, effectively creating a liberal majority in ''[[West Coast Hotel Co. v. Parrish]]'' and ''[[National Labor Relations Board v. Jones & Laughlin Steel Corporation]]'' thus departing from the ''[[Lochner v. New York]]'' era and giving the government more power in questions of economic policies. Journalists called this change "[[the switch in time that saved nine]]." Recent scholars have noted that since the vote in Parrish took place several months before the court-packing plan was announced, other factors, like evolving jurisprudence, must have contributed to the Court's swing. The opinions handed down in Spring 1937, favorable to the government, also contributed to the downfall of the plan. In any case, the "court packing plan," as it was known, did lasting political damage to Roosevelt and was finally rejected by Congress in July.

[[File:Fdr-reorganize.jpg|thumb|290px|FDR alreads has too much power & demands more]]

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===Attacks Right and Left ===

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Historians on the ~~left~~, like Conkin (1967), bemoan that FDR rescued capitalism just when the opportunity was at hand to nationalize banking, railroads and other industries. Liberal historians like Sitkoff argue that Roosevelt restored hope and self-respect to tens of millions of desperate people, built labor unions, upgraded the national infrastructure and saved capitalism in his first term when he could have destroyed it and easily nationalized the banks and the railroads.

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Historians on the Left, like Conkin (1967), bemoan that FDR rescued capitalism just when the opportunity was at hand to nationalize banking, railroads and other industries. Liberal historians like Sitkoff argue that Roosevelt restored hope and self-respect to tens of millions of desperate people, built labor unions, upgraded the national infrastructure and saved capitalism in his first term when he could have destroyed it and easily nationalized the banks and the railroads.

Historians on the right like Folsom complain that FDR enlarged the powers of the federal government, built up labor unions, slowed long-term economic growth, and weakened the business community.<ref>Burton W. Folsom, ''New Deal or Raw Deal?: How FDR's Economic Legacy Has Damaged America'' (2009)</ref>

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[[Image:Gop-plank.JPG|thumb|275px|A 1936 cartoon shows the GOP building its platform from the conservative planks abandoned by the Democrats.]]

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Historians on the ~~left~~ have denounced the New Deal as a conservative phenomenon that let slip the opportunity to radically reform capitalism. Since the 1960s, "[[New Left]]" historians have been among the New Deal's harsh critics. (''For a list of relevant works, see the list of suggested readings appearing toward the bottom of the article.'') New Left historian Barton J. Bernstein, in a 1968 essay, compiled a chronicle of missed opportunities and inadequate responses to problems. The New Deal may have saved capitalism from itself, Bernstein charged, but it had failed to help—and in many cases actually harmed—those groups most in need of assistance. Conkin (1967) similarly chastised the government of the 1930s for its policies toward marginal farmers, for its failure to institute sufficiently progressive tax reform, and its excessive generosity toward select business interests. From the far ~~left~~ [[Howard Zinn]], in 1966, criticized the New Deal for working actively to actually preserve the worst evils of capitalism.

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Historians on the Left have denounced the New Deal as a conservative phenomenon that let slip the opportunity to radically reform capitalism. Since the 1960s, "[[New Left]]" historians have been among the New Deal's harsh critics. (''For a list of relevant works, see the list of suggested readings appearing toward the bottom of the article.'') New Left historian Barton J. Bernstein, in a 1968 essay, compiled a chronicle of missed opportunities and inadequate responses to problems. The New Deal may have saved capitalism from itself, Bernstein charged, but it had failed to help—and in many cases actually harmed—those groups most in need of assistance. Conkin (1967) similarly chastised the government of the 1930s for its policies toward marginal farmers, for its failure to institute sufficiently progressive tax reform, and its excessive generosity toward select business interests. From the far-Left [[Howard Zinn]], in 1966, criticized the New Deal for working actively to actually preserve the worst evils of capitalism.

Since the 1970s research on the New Deal has been less interested in the question of whether the New Deal was a "conservative," "liberal" or "revolutionary" phenomenon than in the question of constraints within which it was operating. Political sociologist [[Theda Skocpol]], in an influential series of articles, has emphasized the issue of "state capacity" as an often-crippling constraint. Ambitious reform ideas often failed, she argued because of the absence of a government bureaucracy with significant strength and expertise to administer them. Other more recent works have stressed the political constraints that the New Deal encountered. Both in Congress and among certain segments of the population conservative inhibitions about government remained strong; thus some scholars have stressed that the New Deal was not just a product of its liberal backers, but also a product of the pressures of its conservative opponents.

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The most prominent spokesman for "economic maturity" was Harvard economist Alvin Hansen (1887-1975)<ref>Alvin H. Hansen, "Economic Progress and Declining Population Growth," ''American Economic Review,'' Vol. 29, No. 1 (Mar., 1939), pp. 1-15 [http://www.jstor.org/stable/1806983 in JSTOR]</ref> who called it "secular stagnation." In the late 1930s Hansen argued that "secular stagnation" had set in, so that the American economy would never grow rapidly again, because all the growth ingredients had played out, including technological innovation and population growth. The only solution, he argued, was constant deficit spending by the federal government. Critics, such as George Terborgh, attacked Hansen as a pessimist and defeatist for advancing his secular stagnation thesis. Hansen replied that secular stagnation was just another name for Keynes's underemployment equilibrium. However, the sustained economic growth beginning in 1940 undercut Hansen's predictions and his stagnation model was forgotten.<ref>W. Robert Brazelton, "Alvin Harvey Hansen: Economic Growth and a More Perfect Society: The Economist's Role in Defining the Stagnation Thesis and in Popularizing Keynesianism," ''American Journal of Economics and Sociology,'' Vol. 48, No. 4 (Oct., 1989), pp. 427-440 [http://www.jstor.org/stable/3487557 in JSTOR]</ref>

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====Conservative opposition====

Conservative economists at the time opposed this idea, most notably Raymond Moley (a widely read columnist), consultants George Terborgh<ref>Benjamin Higgins, "The Doctrine of Economic Maturity," ''American Economic Review,'' Vol. 36, No. 1 (Mar., 1946), pp. 133-141 [http://www.jstor.org/stable/1802261 in JSTOR]</ref> and Wilfrid I. King,<ref>Willford I. King, "Are We Suffering From Economic Maturity?," ''Journal of Political Economy,'' Vol. 47, No. 5 (Oct., 1939), pp. 609-622 [http://www.jstor.org/stable/1824177 in JSTOR]</ref> and professors Gottfried Haberler, Frank Knight, Oskar Morgenstern, Henry Simons, Joseph Schumpeter, and William Fellner.<ref>William Fellner, " The Technological Argument of the Stagnation Thesis," ''Quarterly Journal of Economics,'' Vol. 55, No. 4 (Aug., 1941), pp. 638-651 [http://www.jstor.org/stable/1884121 in JSTOR]</ref>

==African Americans==

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The New Deal set up numerous agencies to help impoverished farmers, but in the long run they had to move to the cities to become better off. Many leading New Dealers, including [[Eleanor Roosevelt]], [[Harold L. Ickes]], [[Aubrey Williams]] and [[Harry Hopkins]] worked hard to ensure Blacks received at least 10% of welfare assistance payments. Economic uplift was one thing but political revolution was another: the New Deal did not try to undercut segregation or change the second class political status of Blacks in the South. Roosevelt did appoint an unprecedented number of African Americans to second-level positions in his administration that collectively were called the Black Cabinet, perhaps due to the influence of Eleanor Roosevelt, a vocal advocate of easing discrimination. Roosevelt and Hopkins worked with big city mayors to welcome Black political organizations that made the transition from the GOP to the Democratic party in 1934-36.

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The WPA, NYA, and CCC relief programs allocated 10% of their budgets to blacks (who comprised about 10% of the total population, and 20% of the poor). They operated separate all-black units with the same pay and conditions as white units. The African American community responded favorably, so that by 1936 the majority who voted (usually in the North) were voting ~~Democratic~~. This was a sharp realignment from 1932, when most African Americans preferred the Republican ticket. The New Deal thus established a political alliance between African Americans and the ~~Democratic~~ Party that survives into the 21st century.

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The WPA, NYA, and CCC relief programs allocated 10% of their budgets to blacks (who comprised about 10% of the total population, and 20% of the poor). They operated separate all-black units with the same pay and conditions as white units. The African American community responded favorably, so that by 1936 the majority who voted (usually in the North) were voting Democrat. This was a sharp realignment from 1932, when most African Americans preferred the Republican ticket. The New Deal thus established a political alliance between African Americans and the Democrat Party that survives into the 21st century.

Some liberal historians argue the New Deal laid the ground work for black breakthroughs during World War II, the civil rights movement and the [[Great Society]] of the 1960s. Militant African Americans insist that the Civil Rights movement owed everything to black activists, and very little to the New Deal. Note that the New Deal was especially beneficial to white ethnic minorities, who responded with 80-90% of their votes for Roosevelt's reelection.

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==Double dip recession ==

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==Double dip recession==

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The Roosevelt administration was under assault during FDR's second term, which presided over a new dip in the Great Depression in the fall of 1937 that continued through most of 1938. Production declined sharply, as did profits and employment. The Government's own statistics were showing that 23.8% of the Workforce was either unemployed, or underemployed. The term for the human suffering at the hands of [[economic planning|government planners]] was "wastage." According to the Brain Trusters own statistics, of "100 Per Cent Manpower," 23.8 were "Per Cent Wastage." <ref>''Population and the Pattern of Unemployment, 1930-1937'', Rupert B. Vance and Nadia Danilevski, The Milbank Memorial Fund Quarterly, Vol. 18, No. 1. (Jan., 1940), pp. 27-43.</ref> After four years of "government solutions," contemporaneous reports were stating "much of the unemployment in 1937 was due to a decrease in the number of jobs available." <ref>''Population and the Pattern of Unemployment, 1930-1937'', Vance and Danilevski.</ref>

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==World War II and the end of the New Deal ==

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Prosperity had returned by 1938 for most people—but not for the bottom third, who remained plagued by structural unemployment. The impact of war mobilization and massive war spending doubled the GNP. Businessmen ignored the mounting national debt and heavy new taxes, redoubling their efforts for greater output as an expression of patriotism. Patriotism drove most people to voluntarily work overtime and give up leisure activities to make money after so many hard years. Patriotism meant that people accepted rationing and price controls for the first time. "Cost-plus" pricing in munitions contracts guaranteed that businesses would make a profit no matter how many mediocre workers they employed, no matter how inefficient the techniques they used. The demand was for a vast quantity of war supplies as soon as possible, regardless of cost. Business hired every person in sight, even driving sound trucks up and down city streets begging people to apply for jobs. New workers were needed to replace the 12 million working-age men serving in the military. These events magnified the role of the federal government in the national economy. In 1929, federal expenditures accounted for only 3% of [[GNP]]. Between 1933 and 1939, federal expenditure tripled, and Roosevelt's critics charged that he was turning America into a [[socialism|socialist]] state. However, spending on the New Deal was far smaller than on the war effort.

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==Conflicting interpretation of the New Deal economic policies==

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=== Depression Statistics ===

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[[File:Econ30s.jpg|thumb|400px|major economic indicators, 1929-52]]

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===Relief Statistics===

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Table 3: Families on Relief 1936-41:

===Prolonged/Worsened the Depression===

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A 1995 survey of economic historians and economists asked "Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression." Of the economists 27% agreed and 51% disagreed. Of the economic historians, only 6% agreed and 74% disagreed. (the rest were in the partly agree/disagree group).<ref>[http://eh.net/lists/archives/eh.res/feb-1997/0010.php See]</ref>

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===Unemployment continues===

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Darby counts WPA workers as employed; Lebergott as unemployed

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===Fiscal Conservatism===

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Fiscal conservatism was a key component of the New Deal, as Zelizer (2000) demonstrates. It was supported by Wall Street and local investors and most of the business community; mainstream academic economists believed in it, as apparently did the majority of the public. Conservative southern Democrats, who favored balanced budgets and opposed new taxes, controlled Congress and its major committees. Even liberal Democrats at the time regarded balanced budgets as essential to economic stability in the long run, although they were more willing to accept short-term deficits. Public opinion polls consistently showed public opposition to deficits and debt. Throughout his terms, Roosevelt recruited fiscal conservatives to serve in his administration, most notably [[Lewis Douglas]] the Director of Budget from 1933 to 1934, and [[Henry Morgenthau Jr.]], Secretary of the Treasury from 1934 to 1945. They defined policy in terms of budgetary cost and tax burdens rather than needs, rights, obligations, or political benefits. Personally the president embraced their fiscal conservatism. Politically, he realized that fiscal conservatism enjoyed a strong wide base of support among voters, leading Democrats, and businessmen. On the other hand, there was enormous pressure to act–and spending money on high visibility programs attracted Roosevelt, especially if it tied millions of voters to him, as did the WPA.

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Fiscal conservatism was a key component of the New Deal, as Zelizer (2000) demonstrates. It was supported by Wall Street and local investors and most of the business community; mainstream academic economists believed in it, as apparently did the majority of the public. Conservative southern Democrats, who favored balanced budgets and opposed new taxes, controlled Congress and its major committees. Even liberal Democrats at the time regarded balanced budgets as essential to economic stability in the long run, although they were more willing to accept short-term deficits. Public opinion polls consistently showed public opposition to deficits and debt. Throughout his terms, Roosevelt recruited fiscal conservatives to serve in his administration, most notably [[Lewis Douglas]] the Director of Budget from 1933 to 1934, and [[Henry Morgenthau Jr.]], Secretary of the Treasury from 1934 to 1945. They defined policy in terms of budgetary cost and tax burdens rather than needs, rights, obligations, or political benefits. Personally the president embraced their fiscal conservatism. Politically, he realized that fiscal conservatism enjoyed a strong wide base of support among voters, leading Democrats, and businessmen. On the other hand, there was enormous pressure to act–and spending money on high visibility programs attracted Roosevelt, especially if it tied millions of voters to him, as did the WPA.

Douglas proved too inflexible, and quit in 1934. Morgenthau made it his highest priority to stay close to Roosevelt, no matter what. Douglas' position, like many of the [[Old Right]] was grounded in a basic distrust of politicians and the deeply ingrained fear that government spending always involved a degree of patronage and corruption that offended his Progressive sense of efficiency. The Economy Act of 1933, passed early in the Hundred Days, was Douglas' great achievement. It reduced federal expenditures by $500 million, to be achieved by reducing veterans’ payments and federal salaries. Douglas cut government spending through executive orders that cut the military budget by $125 million, $75 million from the Post Office, $12 million from Commerce, $75 million from government salaries, and $100 million from staff layoffs. As Freidel concludes, "The economy program was not a minor aberration of the spring of 1933, or a hypocritical concession to delighted conservatives. Rather it was an integral part of Roosevelt's overall New Deal."<ref>Freidel 1990, p. 96</ref> Revenues were so low that borrowing was necessary (only the richest 3% paid any income tax before 1942.) Douglas therefore hated the relief programs, which he said reduced business confidence, threatened the government’s future credit, and had the "destructive psychological effects of making mendicants of self-respecting American citizens."<ref>Zelizer</ref> Roosevelt was pulled toward greater spending by Hopkins and Ickes, and as the 1936 election approached he decided to gain votes by attacking big business.

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[[File:Debt29-50.jpg|thumb|400px|left|National Debt as a percentage of GNP climbs from 20% to 40% as Hoover begins relief efforts with the [[Reconstruction Finance Corporation]] and levels off during the New Deal; soars during WW2 from ''Historical Statistics US'' (1976)]]

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Morgenthau shifted with FDR, but at all times tried to inject fiscal responsibility; he deeply believed in balanced budgets, stable currency, reduction of the national debt, and the need for more private investment . The Wagner Act met Morgenthau’s requirement because it strengthened the party’s political base and involved no new spending. In contrast to Douglas, Morgenthau accepted Roosevelt’s double budget as legitimate–that is a balanced regular budget, and an “emergency” budget for agencies, like the WPA, PWA and CCC, that would be temporary until full recovery was at hand. He fought against the veterans’ bonus until Congress finally overrode Roosevelt’s veto and gave out $2.2 billion in 1936. His biggest success was the new Social Security program; he managed to reverse the proposals to fund it from general revenue and insisted it be funded by new taxes on employees. It was Morgenthau who insisted on excluding farm workers and domestic servants from Social Security because workers outside industry would not be paying their way.<ref>Zelizer 2000; Savage 1998</ref>

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Morgenthau shifted with FDR, but at all times tried to inject fiscal responsibility; he deeply believed in balanced budgets, stable currency, reduction of the national debt, and the need for more private investment . The Wagner Act met Morgenthau’s requirement because it strengthened the party’s political base and involved no new spending. In contrast to Douglas, Morgenthau accepted Roosevelt’s double budget as legitimate–that is a balanced regular budget, and an “emergency” budget for agencies, like the WPA, PWA and CCC, that would be temporary until full recovery was at hand. He fought against the veterans’ bonus until Congress finally overrode Roosevelt’s veto and gave out $2.2 billion in 1936. His biggest success was the new Social Security program; he managed to reverse the proposals to fund it from general revenue and insisted it be funded by new taxes on employees. It was Morgenthau who insisted on excluding farm workers and domestic servants from Social Security because workers outside industry would not be paying their way.<ref>Zelizer 2000; Savage 1998</ref>

Deficits held relatively constant throughout the 1930s at about 40% of the GDP.<ref>Economists at the time used GNP (gross national product) and today they prefer GDP (gross domestic product). For the US, GNP and GDP are almost the same.</ref>

===Claims the New Deal adopted or resembled Fascist economic models===

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The term "fascism" in the 21st century has very strong connotations of mass murder and death camps, however, in the 1930s it meant the [[planned economy]] and [[corporativism]] exemplified by the economic plans of Benito Mussolini in Italy. And, comparisons have been made between the economic systems of Fascist Italy and the New Deal programs. Communists, classical liberals, conservatives, and [[Herbert Hoover]] used the term fascism in that manner at that time. Likewise, modern-day [[paleoconservatives]] argue that the New Deal was a major milestone in the rise of America's [[managerial state]].

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[[File:FDR-LBJ.png|thumb|left|220px|The New Deal was the inspiration for [[Lyndon B. Johnson]]'s [[Great Society]] in 1960s. Johnson (on right) headed the Texas NYA and was elected to Congress in 1938.]]

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Some economists argue that although the New Deal did not end the depression, all in all it helped to prevent the economy from decaying further by increasing the regulatory functions of the federal government in ways that helped stabilize previous trouble areas of the economy: the stock market, the banking system, and others. Others argue that it worsened the depression. All analysts agree the New Deal produced a new political coalition that sustained the ~~Democratic~~ Party as the majority party in national politics for more than a generation after its own end.

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Some economists argue that although the New Deal did not end the depression, all in all it helped to prevent the economy from decaying further by increasing the regulatory functions of the federal government in ways that helped stabilize previous trouble areas of the economy: the stock market, the banking system, and others. Others argue that it worsened the depression. All analysts agree the New Deal produced a new political coalition that sustained the Democrat Party as the majority party in national politics for more than a generation after its own end.

Roosevelt's 12 years in office saw a dramatic increase in the power of the federal government as a whole. Roosevelt also established the presidency as the preeminent center of authority within the federal government. By creating a large array of agencies protecting various groups of citizens—workers, farmers, and others—who suffered from the crisis, enabling them to challenge the powers of the corporations, the Roosevelt administration generated a set of political ideas—known to later generations as New Deal liberalism—that remained a source of inspiration and controversy for decades and that helped shape the next great experiment in liberal reform, the [[Great Society]] of the 1960s. The wartime [[FEPC]] executive orders that forbade job discrimination against African Americans, women and ethnic groups was a major breakthrough that brought better jobs and pay to millions of minority Americans. Historians usually treat FEPC as part of the war effort and not part of the New Deal itself.

==="New Deal" as Political Metaphor===

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Since 1933 politicians and pundits have often called for a "new deal" regarding this or that political object. That is, they demand a completely new, large-scale approach to a project. As Arthur A. Ekirch Jr. (1971) has shown, the New Deal stimulated utopianism in American political and social thought on a wide range of issues.

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==Brain trust==

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Roosevelt gathered around himself informal advisors, mostly university professors, dubbed by the media the [[Brain Trust]]. A key advisor was [[Raymond Moley]], who by 1936 broke with Roosevelt and provided the most important conservative critique.

==Main programs==

===National Recovery Act===

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In 1933 Italian Premier [[Benito Mussolini]] was a towering figure. Dr. Nicholas Murray Butler,<ref>[http://www.time.com/time/magazine/article/0,9171,774563-4,00.html Axis (1936-1943)], ''[[TIME magazine]]'', Sep. 20, 1943,</ref> President of Columbia University and [[Nobel Prize for Peace]], said of [[fascism]], it is as a “form of government of the very first order of excellence”; and found it “safe to predict that just as [[Oliver Cromwell|Cromwell]] made modern England, so Mussolini would make modern Italy.” <ref>[http://www.marxists.org/history/etol/writers/wright/1943/10/italy.htm What To Do With Italy?], John G. Wright, From Fourth International, Vol.4 No.10, October 1943, pp.308-311.</ref> Chairman [[Sol Bloom]] of the Foreign Affairs Committee of the U. S. House of Representatives, suggested Mussolini was a great man and had something the [[United States]] government might well look to for imitation.<ref>John T. Flynn, ''As We Go Marching'', Doubleday, 1944, p. 70.</ref> What they liked particularly was his [[corporative]] system. Mussolini organized each trade or industrial group or professional group into a state supervised trade association. Mussolini called it a corporative.<ref>[http://www.cmre.org/GeneSmileypresentation.pdf The New Deal and Corporatism], Prof. Emeritus Gene Smiley, Marquette University, Presented at the Committee for Monetary Research and Education,October 19, 2006,</ref> These corporatives operated under state supervision and provided economic planning of production, quality, prices, distribution, labor standards, etc. The National Recovery Act, or NRA as it came to be called, provided that a corporative system in America for each industry should be organized into a federally supervised trade association. It was not called a corporative. It was called a [[Code Authority]]. In [[Nazi]] Germany such government run planning authorities built on the Italian model were called [[industrial cartel]]s. This was the same as fascism.<ref>[http://www.rooseveltmyth.com/book/hbzfrm.htm ''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948, Book 1, Ch. 5.</ref> These code authorities could regulate production, quantities, qualities, prices, distribution methods, etc., under the supervision of the NRA that had the effect of ending the downward spiral of deflation and falling prices, but which risked the long-term effect of stifling innovation and favoring big business over small. Anti-trust laws forbade such organizations. Roosevelt had denounced Hoover for not enforcing these laws sufficiently. Now Roosevelt suspended the anti-trust laws and compelled men to combine.

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===Civilian Conservation Corps===

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One of FDR’s favorites was the [[Civilian Conservation Corps]] (CCC), a relatively small program designed to keep unemployed young men out of trouble while giving them food and clothing and discipline, and their families some cash. Roosevelt described work camps as a means for getting youth "off the city street corners."

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===Works Progress Administration===

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The Works Progress Administration ([[WPA]]) operated 1935-43 and was the largest and most controversial of the relief programs. Until now relief had been a local responsibility, although both Hoover and FDR had provided federal funding. Now the national government took full control; conservatives charged it was done to build a vast national political machine for Roosevelt. The WPA had a larger size and budget ($5 billion at first) than previous efforts such as FERA and CWA. [[Harry Hopkins]], a liberal close to FDR, was the director. The WPA was responsible for the building and renovation of over 100,000 public buildings and the construction of 600 airports, more than 500,000 miles of roads, and over 100,000 bridges. The WPA was also well known for its flexibility. It employed not only construction workers but also artists and authors as well as operating separate sewing projects for women. The [[NYA|National Youth Administration]] (NYA) was a unit of the WPA for young men and women (in contrast to its rival the CCC, which only enrolled young men).

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The Works Progress Administration ([[WPA]]) operated 1935-43 and was the largest and most controversial of the relief programs. Until now relief had been a local responsibility, although both Hoover and FDR had provided federal funding. Now the national government took full control; conservatives charged it was done to build a vast national political machine for Roosevelt. ~~TheWPA~~ had a larger size and budget($5 billion at first) than previous efforts such as FERA and CWA. [[Harry Hopkins]], a liberal close to FDR, was the director. The WPA was responsible for the building and renovation of over 100,000 public buildings and the construction of 600 airports, more than 500,000 miles of roads, and over 100,000 bridges. The WPA was also well known for its flexibility. It employed not only construction workers but also artists and authors as well as operating separate sewing projects for women. The [[NYA|National Youth Administration]] (NYA) was a unit of the WPA for young men and women (in contrast to its rival the CCC, which only enrolled young men).

===No training===

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A major failing of the New Deal, and especially the CCC and WPA, was the deliberate decision not to provide job training. The reason was that liberals (and especially labor unions) thought there were already too many unemployed skilled workers and there was no need for more. In retrospect this was one of the major failings of the New Deal, and was reversed in World War II, when the government subsidized job training on a very large scale in industry and the military. Ever since 1996 the consensus has been that job training is an essential part of any program designed to help the poor.

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