Redefining Liberalism

I. Introduction

A. President Franklin Delano Roosevelt urged Congress for " broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe". He thereby launched a program of federal activism called the New Deal that would change the nature of the American government.

B. The New Deal represented a new form of liberalism, the ideology of individual rights that had long shaped the character of American society and politics.

C. To protect those rights, New Deal activists called for "social welfare" liberalism, which expanded individual rights. Beginning in 1930s and cont. until 1970s, they increased the amount and scope of national legislation; created an increasingly centralized federal administrative system; and instituted new programs, such as Social Security, that gave the national gov. responsibility for the welfare of every American citizen.

D. Critics charged the New Deal as a program of "big government" and "social welfare" that directly repudiated traditional classical liberal principles.

II. The New Deal Takes Over, 1933-1945

A. Although many Americans, esp. wealthy conservatives, hated the new Democratic president, FDR, he was immensely popular.

B. Hoover and FDR were similar in that, they were both committed to maintaining the nations' basic social and institutional structures, believed in the morality of a balanced budget and extolled the values of hard work, cooperation, and sacrifice.

C. The New Deal program put people to work, instilling hope for the nation's future.

D. Roosevelt's Leadership

1. FDR's public correspondence was a staff of fifty to handle all the letters to the White House. Roosevelt's masterful use of the radio, esp. the "fireside chats" during his first two terms, bolstered his relationship with the people.

2. FDR dramatically enlarged the role of the executive branch in stetting the budget and initiating legislation.

3. He relied of his "Brain Trust" of professors from Columbia and Harvard universities: Raymond Moley, Rexford Tugwell, Adolph A. Berle, and Felix Frankfurter.

4. His also turned to his cabinet: Secretary of the Interior Harold L. Ickes, Frances Perking at Labor, Henry A. Wallace at Agriculture, and Henry Morgenthau, Jr., the secretary of the Treasury.

5. Financier Bernard Baruch influenced FDR, attracting hundreds of talented lawyers to Washington, where they had a direct hand in shaping legislation.

6. Inspires by the idealism of the New Deal, many of them devoted their lives to public service and the principles of social welfare liberalism.

E. The Hundred Days

1. In a legendary legislative session, known as the "Hundred Days", Congress enacted 15 major bills, which focused on 4 major problems - banking failures, agricultural overproduction, the business slump, and soaring unemployment.

2. The Emergency Banking Act.

a. First addressing the banking crisis, since bank failures had cut into the savings of nearly 9 million families and to prevent more failures dozens of states had close their banks.

b. On March 5, FDR declared a national "bank holiday" - a euphemism for closing all the banks - and called Congress into special session. Four days later, Congress passed the Emergency Banking Act, which permitted banks to reopen if a Treasury Department inspection showed they had sufficient cash reserves.

c. The act worked because FDR convinced the public it would through the fireside chat. When the banking systems reopened on March 13, deposits exceeded withdrawals, restoring stability to one of the nation's prime financial institutions (Capitalism saved in 8 days).

d. A 2nd banking law of 1933, the Glass-Steagall Act, further restored public confidence; it creates he Federal Deposit Insurance Corp. (FDIC), which insured deposits up to $2500.

e. Congress created the Home Owners Loans Corp. to refinance home mortgages threatened by foreclosure.

f. It then est. the Civilian Conservative Corps (CCC), which mobilized 250,000 young men to for reforestation and conservative work.

g. Two controversial measures: Tennessee Valley Authority (TVA), set up a gov-owned corp. that would produce cheap hydroelectric power and encourage economic development. The second act legalized the sale of beer, offending moral reformers.

3. The Agricultural Adjustment Act.

a. Because farmers formed more than a quarter of the workforce, the Agricultural Adjustment Act (AAA), was a measure jointly developed by administration officials and major farm organizations, represented a new level of gov. involvement in the farm economy.

b. To solve the problem of overproduction, which resulted in low prices for farm crops, the AAA set up an allotment system for 7 major commodities (wheat, cotton, corn, hogs, rice, tobacco, and dairy products).

c. The act provided cash subsidies to farmers who cut their production of these crops; to pay these subsidies, the act imposed a tax on the processors of these commodities, which they in turn passed on to consumers.

d. New Deal policymakers hoped that farm prices would rise as production (& supply) fell, spurring consumer purchases by farmers and assisting a general economic recovery.

e. By dumping $ in farmers' hands (a special interest policy), the AAA stabilized the farm eco.

f. Benefits were unevenly distributed, with subsidies going primarily to owners of large and medium-sized farms, who often cut production by reducing the amount of land, they rented to tenants and sharecroppers.

g. In the South, sharecropping forced 200,000 black families off the land and they joined the Southern Tenant Farmers Union (STFU), to try and protect themselves (biracial).

h. STFU could do little due to the white economic power and dispossessed of access to land and denied gov aid, hundreds of thousands of black sharecroppers and white smallholders moved to the cities.

4. The National Recovery Act.

a. The New Deal's initial response to depressed levels of business activity was the National Industrial Recovery Act, which drew on the regulatory approaches of Baurch's WIB during WWI and Hoover's trade associations of the 1920s (reflects "corporatist"