[[Image:29-49.gif|right|250px|thumb|Dow Jones Industrial Averages, 1929-50.]]
The '''"New Ordeal"''' is a neologism rarely used by opponents of Franklin D. Roosevelt and his New Deal, which was one of the most successful economic recovery programs in US history during peacetime. It took the US economy two decades, between 1929 and 1949, to finally recover from the [[Crash of '29]] which resulted from a number of factors, including delayed repayment of loans by wartime allies (World War I) and the
reluctance of the Harding, Coolidge, and Hoover administrations to regulate the financial sector. The "new ordeal" in the minds of those who accept that such a thing even existed, encompasses the four presidential terms U.S. President [[Franklin D. Roosevelt]] had been elected to, the final term having been administered mostly by his successor, President [[Harry S. Truman]].
During the two decades between 1929 and 1949, America experienced
two recessions, and [[World War II]], which claimed the lives of 55 million people worldwide. Many of the nations involved in World War II resorted to "economic planning," as Economist [[Friedrich Hayek]] referred to it, to address the so-called "crisis in capitalism" in the 1930s.
The Depression had within it a recession from 1937-1938; 1933 to 1937 were recovery years stimulated by the [[New Deal]] government spending. However by 1937 the US economy had not recovered to the levels of 1929. Manufacturing demand stimulated by WWII and the pent up post-war demand for durable consumer goods fueled the 1941-1949 recovery, until finally, in 1949, the New York Stock Exchange reached the level it had been at prior to the crash of October, 1929.
===The Second New Deal===
All during the winter and spring of 1938 a group of
young instructors from Harvard and Tufts were busy on a book which they called ''An Economic Program for American Democracy.'' which appeared in October, 1938. These instructors had been moving under the guidance of Dr. Alvin H. Hansen,<ref>Alvin H. Hansen, ''Fiscal Policy and Business Cycles'', (Norton, 1941).</ref> The theory propounded may be briefly stated thus: The expansion of the American economy came to an end in 1929. Before that it had grown primarily because technological expansion went forward on an amazing scale. But all this came an end. Population now increased at a slower rate. The theory continued : Government spending on the First [[New Deal]] had been proved to be a powerful tonic. People realized that government pump priming could lead to a self-sustaining economic recovery. The government set up built in stabilizers to maintain prosperity, such as the Federal Deposit Insurance Corporation (FDIC).
By 1938 Roosevelt embarked on a massive defense appropriations buildup; the Administration would advance 30% to a defense contractor when placing an order. The National City Bank reported an increase of overall business profits in the year 1939 over 1938 of 63.6%, and in its December 1940 Bulletin showed for 284 companies "directly affected by war and defense program" a rise of 79.2%. The ''Wall Street Journal'' reported, "Betterment in profits was naturally more pronounced, as a rule, in those industries benefiting directly or indirectly from the European conflict." <ref>''Wall Street Journal'', May 3, 1940.</ref>