Your SlideShare is downloading. ×
Task 5.2 New Deal And Cornell Notes
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Task 5.2 New Deal And Cornell Notes

2,548
views

Published on

Published in: Economy & Finance

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
2,548
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
45
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • Unequal Distribution of Wealth : From 1923-1929 the average output per worker increased 32% in manufacturing. During that same period of time average wages for manufacturing jobs increased only 8%. Thus wages increased at a rate one fourth as fast as productivity increased. As production costs fell quickly, wages rose slowly, and prices remained constant, the bulk benefit of the increased productivity went into corporate profits. The rich were not willing to share their wealth and the government because of a laissez-faire philosophy was not willing to force the rich to do so Overproduction: For an economy to function properly, total demand must equal total supply. In an economy with such disparate distribution of income it is not assured that demand will always equal supply. Essentially what happened in the 1920's was that there was an oversupply of goods. It was not that the surplus products of industrialized society were not wanted, but rather that those whose needs were not satiated could not afford more, whereas the wealthy were satiated by spending only a small portion of their income. The economy based on a relatively few people (the rich) purchasing luxury goods to sustain itself. Layoffs were inevitable as supplies increased Installment Credit: Three quarters of the U.S. population would spend essentially all of their yearly incomes to purchase consumer goods such as food, clothes, radios, and cars. These were the poor and middle class: families with incomes around, or usually less than, $2,500 a year. The bottom three quarters of the population had an aggregate income of less than 45% of the combined national income; the top 25% of the population took in more than 55% of the national income. While the wealthy too purchased consumer goods, a family earning $100,000 could not be expected to eat 40 times more than a family that only earned $2,500 a year, or buy 40 cars, 40 radios, or 40 houses. One obvious solution to the problem of the vast majority of the population not having enough money to satisfy all their needs was to let those who wanted goods buy products on credit. The concept of buying now and paying later caught on quickly. By the end of the 1920's 60% of cars and 80% of radios were bought on installment credit. Between 1925 and 1929 the total amount of outstanding installment credit more than doubled from $1.38 billion to around $3 billion. Installment credit allowed one to "telescope the future into the present.” This strategy created artificial demand for products which people could not ordinarily afford. It put off the day of reckoning, but it made the downfall worse when it came. By telescoping the future into the present, when "the future" arrived, there was little to buy that hadn't already been bought. In addition, people could not longer use their regular wages to purchase whatever items they didn't have yet, because so much of the wages went to paying back past purchases. Loans were defaulted as people lost their jobs which exacerbated the problems. The government refused to step in because Social Darwinism was the philosophical basis by the leaders in power.
  • Transcript

    • 1. Overproduction Unequal Distribution Of Wealth Installment Credit Overspeculation Causes of the Great Depression
    • 2. Downward Spiral Towards Economic Depression Unequal Distribution of Wealth Overproduction Installment Buying Layoffs No Government Intervention Pullback in Consumer Spending
    • 3.  
    • 4.  
    • 5. The New Deal
    • 6. The “Old Deal” What?
      • President Hoover’s reaction to the Great Depression
      President Herbert Hoover
    • 7. The “Old Deal” What did he want to do?
      • Refused to create government programs until it was too late
      • Let the business cycle take care of things
      Children in one of the Bonus Army Camps
    • 8. The Bonus Army 1932
      • 25,000 WWI veterans
      Who?
      • Marched to Washington D.C. to get a $ bonus they were supposed to get in 1945
      What?
    • 9. The Bonus Army 1932
      • Called out the troops and dispersed the army
      What did Hoover do?
    • 10. The Election of 1932
      • Roosevelt offers a “New Deal” for America
      • Roosevelt wins with 60% of the vote
      What?
    • 11. Roosevelt’s New Deal
      • What?
      • Programs meant to help the country by getting the government involved in the economy
      1. Relief - help people out in the short term 2. Recovery - get the economy back on its feet 3. Reform - keep this from everyhappening again
      • Meant to do 3 things
    • 12. Bank Holiday - First Step
      • Why?
      • Many banks had failed, wiping out families’ savings
      • People lost confidence in the banks
      Depositors Congregate Outside Closed Bank
    • 13. Bank Holiday - First Step
      • How?
      • Closed banks for four days to reorganize
      • President explains in a “fireside chat”
      • Confidence restored
    • 14. Next Step - “Alphabet Soup”
      • In the first 100 days of his administration Roosevelt passes tons of legislation
      Hundred Days
      • The agencies he creates (like AAA)
      Alphabet Soup
    • 15. Next Step - “Alphabet Soup”
      • 18-25 year old guys get jobs and send money home to their families
      CCC - Civilian Conservation Corps CCC workers in Lassen National Forest, California
    • 16. Next Step - “Alphabet Soup”
      • Government pays farmers not to farm
      AAA - Agricultural Adjustment Administration
      • Meant to cause prices to rise and halt overproduction
    • 17. Next Step - “Alphabet Soup”
      • Government runs a hydroelectric power plant
      TVA - Tennessee Valley Authority
      • Provides cheap power & fertilizer to the poor region
      Construction at Norris Dam, which was being built by the TVA on the Clinch River in Northeastern Tennessee
    • 18. Next Step - “Alphabet Soup”
      • Insurance for the $ you put in banks
      FDIC - Federal Department Insurance Corp.
      • Protected people’s savings
      Bank Employee Checks Depositor's Account
    • 19. Next Step - “Alphabet Soup”
      • Watchdog agency for the stock market
      SEC - Securities and Exchange Commission New York Stock Exchange
    • 20. Next Step - “Alphabet Soup”
      • Gave direct relief ($) to those who needed it
      FERA - Federal Emergency Relief Admin.
      • Beginnings of a welfare program
    • 21. Next Step - “Alphabet Soup”
      • Taxed people working now to give payments to the elderly
      Social Security Social Security Information Poster
    • 22. His Greatest Mistake Packing the Supreme Court What? Why?
      • Increase the # of Supreme Court justices from 9 to 15
      • Kept declaring his programs unconstitutional (including NRA, AAA, SEC, etc.)
    • 23. His Greatest Mistake Packing the Supreme Court February, 1937, Richmond (Virginia) Times Dispatch, "Fall In!" What did this cartoonist think about the Supreme Court?
    • 24. His Greatest Mistake Packing the Supreme Court Results?
      • Public grew angry (FDR taking too much power)
      • FDR passed much less legislation after this
      Supreme Court Exterior
    • 25. The New Deal - Pros and Cons Pros
      • Restored optimism and hope to Americans
      Cons
      • Did not really fix the depression
      • Left the nation with much debt
      • Provided necessary relief to many
      • Left people too dependent on government (?)