The president running on the "return to normalcy" ticket after WWI. However, his administration was marked by scandals and Harding died in office in 1923. The Secretary of the interior (Albert Fall) sold the navy oil reserve and accepted 1/4 million dollars in bribes and was sent to prison, named the Tea Pot Dome Scandal. The Attorney General (Harry Daugherty) resigned in disgrace.
Coolidge defined the political element of the 1920s, taking over after the death of Harding. He viewed that the "Business of America is business." His administration was defined by deregulation and corruption, undoing much of the progressive era's progress.
Herbert Hoover was a known humanitarian, but when he was elected in 1928, he made it clear that government was not in the business of "humanitarianism." He thought welfare degraded humans, but pledged ensure there was a "chicken in every pot, a car in every garage." He was a strong proponent of laissez faire capitalism, and he refused to compromise his beliefs during the Great Depression. His incompetence in dealing with the onset of the Great Depression resulted in the onset of "Hoovervilles:" shanty towns where people lived when their houses were foreclosed upon.
There were four world views in response to the crash of 1929.
1. War Communism (1918-1921)
War Communism outlined the nationalization of all the means of production and transportation, abolition of $, imposition of national economy of a single plan and compulsory labor and Stalin's 5 Year Plan
Centers around a centrally planned economy
2. Fascist View
Autarky- self-reliant economy, only domestic goods and services+ Corpratism
3. Keynesian Economics
Saw that the economy had to be saved through gov. intervention. His theory was outlined in the Phases of Business and saw that the only way to stimulate the economy was to spend gov money to create jobs. He thought we had to spend at the bottom to see results.
4. Hayek's view
Thought the only way to heal economy was to leave it alone and thought Keynes was a socialist (which he wasn't)
FDR was known for his pragmatism in recovering a broken economy, using tactics under Keynesian economics to save capitalism in the United States, and creating a system that would change the United States forever. In his run for presidency, he pledged a "New Deal" for the American people, or programs to end the depression and prevent future depressions. This Deal would forever change the relationship common people have with their government. Roosevelt was married to Eleanor Roosevelt; both coming from wealthy and politically prominent East coast families. Roosevelt came into politics first as the assistant secretary of the us navy. In 1920 he lost his bid for vp. In 1921 he was struck with polio, but still managed to hold a facade in public that he was healthy. In 1928-1930, he was Governor of NY, where he made successful attempts to combat the affects of the GD, including putting money into public works, providing tax relief for farmers, a set price of milk and low cost of public utilities and rural electrification.
By the end of Hoover's administration, the banking system has collapsed and panic ensues in the Feb. 1933. In the last two week s of Hoover's term, depositors withdraw $1.2 billion from banks and hold it at home. On the last day in office, Hoover writes in his journal, and highlights the failure he feels in himself and the future of the US.
Known as the "international kiss" this act was a PR move for the United States, and ratified by the senate overwhelmingly. As opposed to passing the League of Nations, this toothless bill agreed to condemn recourse to war as a solution to international controversies. This bill was a weak response to the catastrophe of WWI, and a clear indication of the new era of United States isolationism.
Under the Hoover Administration
-full freedom of association (unions able to meet)
-bans federal courts' power to do injunctions
-no yellow dog contracts
The Supreme Court at the time of FDR's first term were mostly comprised of haunch conservatives. However, over time they began to rule in FDR's favor, but he still attempted to create sweeping reform that the courts would not rule in his favor. He proposed to reorganize the courts by appointing one new judge for every one over 70 years old, which was met with much criticism. The Supreme court ruled against the NRA (1935), finding it unconstitutional to set prices, overstepping the government's powers. However, the courts did rule for the minimum wage law in Washington in 1937. After several of his bills were shot down in the courts, in Roosevelt's 12 year term he was able to appoint 4 judges: Black, Frankfurter, Douglass, and Jackson.
Most productive congress ever, both houses and president= democrat. Was considered the "first new deal."
(Relief, Recovery, Reform)
1. Banking Crisis tackled in March 1933
FDR took a pragmatic response to the crisis by using his broad executive power to create a 4 day banking holiday to examine all the banks and decide which ones to shut down and which to reopen with a stamp of approval under the Emergency Banking Act.
2. FDR used "fireside chats" to communicate with 70% of households
3. Created a "Brain Trust"
Headed by Harry Hopkins, including people from the campaign, democrats, republicans, and experienced people from past administrations. Francis Perkins was the secretary of labor and the first woman to sit on the executive cabinet. She brought labor organizations in the New Deal and ended child labor along with minimum wage/overtime laws and social security.
3. New Agencies under the new Deal
Agricultural Adjustment Act (1933)
-farmer aid to stop producing and ease overinflation
-tax on food processors
-agency to distribute
Civilian Conservation Corps (1933)
-working not protesting
Works Progress Administration (1933)
-employed artists to educate public
FDR's Deal met opposition from both the left and the right. The right saw FDR as a traitor because of his wealthy background- that he was not "looking out" for the wealthy interests. The left, like Huey Long, a democrat from LA who was eventually assassinated in 1935, thought that FDR should go further to share the wealth of the country. From fringe groups, he also met opposition from men like Father Charles Coughlin, an anti-Semitic, nativist, pro-fascist leader.
The vehicle in which to enforce the NLRA, its job is to mediate, enforce, banned company unions and banned firing or blacklisting for union activity.
Nicknamed the "Wagner Act" for the senator that pushed for its passage, the wagner act actually had teeth to enforce. Bargaining powers were reaffirmed.
Both left and right argued that Roosevelt spent too much/too little. However, in 1937, in the beginning of his second term, Roosevelt cut back on government spending and there was a recession called the "Roosevelt Recession." With the beginning of WWII, the production of goods and services for the war ramped up the economy once again. During his 4th and final term his health was deteriorating, and in 1945, FDR died, Truman taking over.
Francis Perkins helped pass this monumental bill.
-no child labor
-federal minimum wage
40 hr work week
In the 19th and early 20th century, Labor was disliked by the public and disenfranchised by the government. The Knights of Labor (1869) was founded by Terrance Powderly, and sought to organize textile workers. Workers were organized regardless of skills/race/gender. The American Federation of Labor (1886) was founded by Samuel Gompers, and only organized male, skilled workers for shorter hours, higher pay and better working conditions. It was a small subset and cooperated with business. Industrial Workers of the World (1906) was known as "one big union", or the wobblies. They reached the height of their influence in the PNW in the timber camps of Spokane.
The Haymarket Massacre (1886) was in Chicago, IL, where a bomb blew up a peaceful protest, wherein police killed many protesters fleeing the scene. Union leaders, without any proof, were arrested and convicted. In 1892, the Homestead Steel Strike was a strike against Carnegie's US Steel, attempting to get union recognized. The PA state militia and the "Pinkertons" were used to break up the strikers, a foe of organized labor. In 1894, the Pullman Strike was initiated by the American Railway Union (Eugene Debs) and US army troops were sent in to "Face off" strikers.
This brief but severe depression in the United States post- WWI resulted/was caused by rampant deflation and 10% unemployment. After this brief depression, there was a huge economic boom. This resulted in a 40% growth in the GDP along with strides in technological innovation.
The 1920s weakened labor, especially through court injunctions and companies' ability to get away with union busting tactics:
1. Violence, intimidation, surveillance
2. Court injunctions
3. Firing and blacklisting
4. Yellow Dog contracts
5. Exploiting internal divisions (race, gender, skilled/unskilled, immigrants)
6. Scabs (replacement workers for striking workers, often disenfranchised groups in need of work. Exploiting racism and nativism)
Galbraith stated there were 4 aspects to countervailing power which controlled and stabilized the business cycle:
1. Government Regulation
2. Organized Labor
3. Consumer Groups
4. Market competition
Each of these factors held very little power in the 1920s leading up to the Great Depression. Government regulation was heavily defunded and stripped of power during the Harding administration. He removed gov. oversight of financial institutions, he defunded the Federal Trade Commission. The Treasury Department provided business with tax loopholes, resulting in reckless and unregulated business practices. Organized Labor in the 1920s was weakened by the courts and the government. Labor organizations like AFL and IWW were not allowed to organize or strike through court injunctions, deportation of immigrant organizers and overturning laws that helped workers, like minimum wage laws. Consumer groups were weak and without mainstream support. The National Consumers League inspected US companies, monitoring conditions and if they were union. Lastly, competition was all but eliminated during the 1920s; the market was dominated by monopolies. All these factors resulted in a huge bubble, one that was soon going to burst
During the 1920s, there was a burgeoning economy for a variety of reasons, including new technology, installment plans, and a lack of competition abroad. To buy the new and improving technology, many Americans bought into the immediate gratification of buying products without the necessary funds, borrowing from banks or stores themselves to buy things like cars and washing machines. This coupled with weak competition abroad, the United States overtook international economy in many Latin American countries such as Guatemala through dishonest and corrupt practices, and eliminated competition in many markets. Thus resulted in a new wave of imperialism in the United States, all in the name of economic gain.
With a new wave of modern advertising in the 1920s and merchandise, there was also a new market: women. Corporate America co-opted the emerging women's rights movement/ appealing to motherly "instinct" to sell new technology. The automobile was a major element of this.
Because of the rampant growth of production during war time, farmers and manufacturers went into debt in order to benefit more from the high prices for goods during the war. After the war, the demand went down; but the production continued to match the pace during WWI, resulting in over-production and the devaluing of goods. While corporate America thrived during the 1920s, the farming and manufacturing community was growing weaker and weaker. This was the first symptom of the Great Depression, and was the first group that showed signs of the widening economic gap.
As labor advanced during WWI, companies softened a bit, trying to squelch the revolutionary nature that was being cultivated. They raised wages a bit, offered small amount of stock options and created "company unions" to disable the threat of collective bargaining. They tried to cultivate company loyalty by superficial means.
With the huge growth of the economy in the United States during the 1920s, there was a wave of consolidation in the corporate world. By 1930, 200 of the largest corporations in the United States owned 50% of the wealth, while 50% of the banking resources was owned by 1% of the banks. This was the peak of the bubble about to burst.
During the 1920s, the stock market valuation quadruples. When the bubble burst, billions of dollars are withdrawn from banks in order to buy stock and many common citizens buy stock on margin, promised they will make it all back and more in the end. In September of 1929, panic begins to set in when they realize the market is wildly inflated and over valued. The "crash" is a series of wild drops in October 1929. On oct. 18, the market goes into free fall before major banks and investment companies intervene to quell panic. Even the most trusted companies, or "Blue chips" plummet: including, GE, ATT, US Steel, etc.
Galbraith, a Canadian economist, listed five reasons he attributed to the crash of 1929:
1. Unequal income distribution
2. Dishonest Business practices
3. Unsound banking structure
4. US as a creditor nation
5. Poor state of economic intelligence
During the month of October, there were a series of wild drops in the stock market.
it's message shifted from complete radicalism, it created a dual-unionism movement, which created more division in the fight for organized labor. During the rise of fascism in 1933 (Hitler) it shifted to the popular front and became very popular among artists, advocates and working people. it strengthened, but was still vulnerable to anti-communist scares.
Hitting an already struggling and impoverished community, the dust bowl of 1930 was because of a drought and the destruction of farm land in the central United States. It was the consequence of unregulated farm practices and was one factor in a mass migration west for work.
Mass demonstrations marked the late 1920s and early 30s, raising the concern in many of Bolshevism. One of these protests was by over 40,000 veterans on Washington demanding government payments which were expected in 1945. Because of the Great Depression, they requested them early. In Minneapolis, there was also a march for $8 a week given to people to live off of.
In 1934, there was an upsurge of strikes on the west coast. Long shoremen across the coast struck. The strikes turned violent with tear gas. These violent strikes spurred FDR's National Labor Relations Act.
Started by John L Lewis, this organization organized industrial workers and had a scope broader than just unionizing. It sought to transform society as a whole and they fought for civil rights, pay equity and raised tremendous amounts of funds for the democratic party. Lewis did not like communists, but recognized their organizing power. It targeted big companies and was an umbrella organization for unions like the United Auto Workers. In 1937, it organized a successful sit-down strike against GM and Carnegie Steel was successfully organized after the previous success.
During the rush of modernity during the 1920s, there was an upsurge of fear in reaction to the changing times. There was a strong movement of fundamentalism in reaction to the growing wave of secularism, along with a new wave of nativism. There was a huge KKK revival in the South, as well as in the North and Midwest. With the Great Migration of Blacks, Jews and Catholics there was a lot of fear and hate in response. There was also immigration restriction and prohibition, largely propelled by fear of immigrants and their consumption of alcohol. Because of Russia's revolution, there was a Great Scare that the revolutionaries would infect the United States,