meanwhile, thousands of tons of unmarketable crops sat rotting in
grain storage bins, while farm income plummeted and thousands of families were
forced to abandon their homesteads. Reeling from the pressures of such a massive
economic downturn, more than 11,000 banks had closed their doors, and the U.S.
banking system had all but ceased to function. The nation, in short, appeared
to be falling into an economic abyss that might well result in the total
breakdown of order. Some observers even feared that without immediate and
dramatic action, the country might well slip into revolution.
FDR's response to this unprecedented crisis was to initiate the
"New Deal" —a series of economic measures designed to alleviate the worst effects of the depression,
reinvigorate the economy, and restore the confidence of the American people in their banks and other
key institutions. The New Deal was orchestrated by a core group of FDR advisors brought in from
academia and industry known as the "Brains Trust" who, in their first "hundred days" in office,
helped FDR enact fifteen major laws. One of the most significant of these was the Banking Act of
1933, which finally brought an end to the panic that gripped the nation's banking system. The
success of the Banking Act, depended in large measure on the willingness of the American people
to once again place their faith—and money—in their local banks. To ensure this, FDR turned to the
radio, and in the first of his many "fireside chats," convinced the American people the crisis was
over and that their deposits—backed by the newly established the Federal Deposit Insurance
Corporation (FDIC)—were safe.
Other significant New Deal measures included the establishment of the Works
Progress Administration (WPA), the Civilian Conservation Corps (CCC), and the Agricultural Adjustment
Administration (AAA). The most famous measure of the New Deal was the 1935 Social Security Act,
which led to the establishment of the Social Security Administration and the creation of a
national system of old-age pensions and unemployment compensation. Social Security also granted
federal financial support to dependant children, the handicapped, and the blind. The New Deal
also led to the establishment of a number of significant regulatory agencies, such as the
Securities and Exchange Commission (SEC), set up to stave off a further crash of the Stock
Market, the Federal Housing Administration (FHA), which ultimately made home ownership
affordable for millions of average Americans, as well as the National Labor Relations Board,
the Civil Aeronautics Authority, and the Federal Communications Commission.
While the New Deal did much to lessen the worst affects of the Great Depression,
its measures were not sweeping enough to restore the nation to full employment. Critics of FDR's
policies, on both the right and the left, have thus found ample reason to condemn it. Conservatives
argue, for example, that it went too far, and brought too much government intervention in the
economy, while those on the left argue that it did not go far enough, and that in order to be
truly effective, the Roosevelt Administration should have engaged in a far more comprehensive
program of direct federal aid to the poor and unemployed. But the New Deal's greatest achievements
transcend mere economic statistics, for in a world where democracy was under siege, and the
exponents of fascism and communism flourished, the New Deal offered hope and restored the faith of
the American people in their representative institutions. It also transformed the federal
government into an active instrument of social justice and established a network of laws
and institutions designed to protect the American economy from the worst excesses of liberal capitalism.
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