Objective: Students will begin their study of the Great Depression. Drill: -If you (the gov’t) pay a person to dig a hole and you pay another person to fill up that same hole, what have you accomplished?. John Keynes -Keynesian Economic Theory.
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Objective: Students will begin their study of the Great Depression.
-If you (the gov’t) pay a person to dig a hole and you pay another person to fill up that same hole, what have you accomplished?
John Keynes-Keynesian Economic Theory
Trickle Down Theory
-Gov’t gives tax cuts to big business and the like.
-Big business and the like invest it in the economy
-More jobs, goods and services are produced
-Consumers have more jobs and wages to spend on goods and services
-Gov’t make up the tax cuts with more tax revenue
-Gov’t makes up spending with increase tax revenue
-Business creates more goods, services and jobs.
-More consumers have jobs and spend their wages
-Gov’t create jobs thru public works
IV. FDR and the Three R’s: Relief, Recovery, and Reform
1. On Inauguration Day, FDR asserted, “the only thing we have to fear is fear itself.”
2. He called for a nationwide banking holiday to eliminate paranoid bank withdrawals, and then
commenced on his Three R’s.
V. Roosevelt Tackles Money and Banking
1. The Emergency Banking Relief Act of 1933 as passed first.
2. Then, Roosevelt settled down for the first of his thirty famous “Fireside Chats.”
President Franklin D. Roosevelt during one of his fireside chats in Washington, D.C., April 28, 1935. His conversational voice brought a sense of personality to the presidency.
3. The “Hundred Days Congress” passed the Glass-Steagall Banking Reform Act, that provided the Federal Deposit Insurance Corporation, which insured individual deposits up to $5000, thereby eliminating the epidemic of bank failure and restoring faith to banks.
VI. Creating Jobs for the Jobless
1. Roosevelt had no qualms about using federal money to assist the unemployed, so he created the Civilian Conservation Corps (CCC), which provided employment in fresh-air government camps for about 3 million uniformed young men.
i. They reforested areas, became fire fighters, drained swamps, and controlled floods.
2. The Agricultural Adjustment Act (AAA) made available many millions of dollars to help farmers meet their mortgages.
Oscar Heline, farmer from Iowa, interviewed by Studs Terkel in Hard Times (1970) “Grain was being burned. It was cheaper than coal. In South Dakota, the county elevator listed corn as minus three cents a bushel. If you wanted to sell them a bushel of corn, you had to bring in three cents. We had lots of trouble on the highway, people were determined to withhold produce from the market - livestock, cream, butter, eggs, what not. If they would dump the produce, they would force the market to a higher level. The farmers would man the highways and cream cans were emptied in ditches and eggs dumped out. They burned the Trestie Bridge, so the trains wouldn't be able to haul grain.”
3. The Home Owners’ Loan Corporation (HOLC) refinanced mortgages on non-farm homes and bolted down the loyalties of middle class, Democratic homeowners.
4. The Civil Works Administration (CWA) was established late in 1933, and it was designed to provide purely temporary jobs during the winter emergency.
5. Congress also authorized the Works Progress Administration (WPA) in 1935,
which put $11
million on thousands
of public buildings,
bridges, and hard-
surfaced roads and
gave 9 million people
jobs in its eight year