The New Deal: Crash Course US History #34 — Transcript

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1. 0:00Episode 34 – The New Deal
2. 0:01Hi, I’m John Green, this is CrashCourse U.S. history, and today we’re going to get
3. 0:03a little bit controversial, as we discuss the FDR administration’s response to the
4. 0:07Great Depression: the New Deal.
5. 0:08That’s the National Recovery Administration, by the way, not the National Rifle Association
6. 0:13or the No Rodents Allowed Club, which I’m a card-carrying member of.
7. 0:16Did the New Deal end the Depression (spoiler alert: mehhh)?
8. 0:20More controversially, did it destroy American freedom or expand the definition of liberty?
9. 0:25In the end, was it a good thing?
10. 0:27Mr. Green, Mr. Green.
11. 0:28Yes.
12. 0:29Ohh, Me from the Past, you are not qualified to make that statement.
13. 0:32What?
14. 0:33I was just trying to be, like, provocative and controversial.
15. 0:35Isn’t that what gets views?
16. 0:37You have the worst ideas about how to make people like you.
17. 0:39But anyway, not EVERYTHING about the New Deal was controversial.
18. 0:42This is CrashCourse, not TMZ.
19. 0:48intro The New Deal redefined the role of the federal
20. 0:54government for most Americans and it led to a re-alignment of the constituents in the
21. 0:59Democratic Party, the so-called New Deal coalition.
22. 1:01(Good job with the naming there, historians.)
23. 1:03And regardless of whether you think the New Deal meant more freedom for more people or
24. 1:07was a plot by red shirt wearing Communists, the New Deal is extremely important in American
25. 1:13history.
26. 1:14Wait a second.
27. 1:15I’m wearing a red shirt.
28. 1:16What are you trying to say about me, Stan?
29. 1:17As the owner of the means of production, I demand that you dock the wages of the writer
30. 1:19who made that joke.
31. 1:20So after his mediocre response to the Great Depression, Herbert Hoover did not have any
32. 1:24chance of winning the presidential election of 1932, but he also ran like he didn’t
33. 1:29actually want the job.
34. 1:30Plus, his opponent was Franklin Delano Roosevelt, who was as close to a born politician as the
35. 1:35United States has ever seen, except for Kid President.
36. 1:38The phrase New Deal came from FDR’s campaign, and when he was running FDR suggested that
37. 1:42it was the government’s responsibility to guarantee every man a right to make a comfortable
38. 1:48living, but he didn’t say HOW he meant to accomplish this.
39. 1:51Like, it wasn’t gonna come from government spending, since FDR was calling for a balanced
40. 1:54budget and criticizing Hoover for spending so much.
41. 1:57Maybe it would somehow magically happen if we made alcohol legal again and one thing
42. 2:00FDR did call for was an end to Prohibition, which was a campaign promise he kept.
43. 2:05After three years of Great Depression, many Americans seriously needed a drink, and the
44. 2:09government sought tax revenue, so no more Prohibition.
45. 2:12FDR won 57% of the vote and the Democrats took control of Congress for the first time
46. 2:16in a decade.
47. 2:17While FDR gets most of the credit, he didn’t actually create the New Deal or put it into
48. 2:22effect.
49. 2:23It was passed by Congress.
50. 2:24So WTFDR was the New Deal?
51. 2:27Basically, it was a set of government programs intended to fix the depression and prevent
52. 2:31future depressions.
53. 2:32There are a couple of ways historians conceptualize it.
54. 2:35One is to categorize the programs by their function.
55. 2:37This is where we see the New Deal described as three R’s.
56. 2:40The relief programs gave help, usually money, to poor people in need.
57. 2:44Recovery programs were intended to fix the economy in the short run and put people back
58. 2:48to work.
59. 2:49And lastly, the Run DMC program was designed to increase the sales of Adidas shoes.
60. 2:53No, alas, it was reform programs that were designed to regulate the economy in the future
61. 2:58to prevent future depression.
62. 2:59But some of the programs, like Social Security, don’t fit easily into one category, and
63. 3:04there are some blurred lines between recovery and reform.
64. 3:07Like, how do you categorize the bank holiday and the Emergency Banking Act of March 1933,
65. 3:12for example?
66. 3:13FDR’s order to close the banks temporarily also created the FDIC, which insures individual
67. 3:18deposits against future banking disasters.
68. 3:20By the way, we still have all that stuff, but was it recovery, because it helped the
69. 3:24short-term economy by making more stable banks, or was it reform because federal deposit insurance
70. 3:29prevents bank runs?
71. 3:31A second way to think about the New Deal is to divide it into phases, which historians
72. 3:34with their A number one naming creativity call the First and Second New Deal.
73. 3:39This more chronological approach indicates that there has to be some kind of cause and
74. 3:42effect thing going on because otherwise why would there be a second New Deal if the first
75. 3:46one worked so perfectly?
76. 3:47The First New Deal comprises Roosevelt’s programs before 1935, many of which were passed
77. 3:52in the first hundred days of his presidency.
78. 3:54It turns out that when it comes to getting our notoriously gridlocked Congress to pass
79. 3:58legislation, nothing motivates like crisis and fear.
80. 4:02Stan can I get the foreshadowing filter?
81. 4:05We may see this again.
82. 4:06So, in a brief break from its trademark obstructionism, Congress passed laws establishing the Civilian
83. 4:10Conservation Corps, which paid young people to build national parks, the Agricultural
84. 4:15Adjustment Act, the Glass Stegall act, which barred commercial banks from buying and selling
85. 4:20stocks, and the National Industrial Recovery Act.
86. 4:23Which established the National Recovery Administration, which has lightening bolts in its claws.
87. 4:28The NRA was designed to be government planners and business leaders working together to coordinate
88. 4:33industry standards for production, prices, and working conditions.
89. 4:36But that whole public-private cooperation idea wasn’t much immediate help to many
90. 4:40of the starving unemployed, so the Hundred Days reluctantly included the Federal Emergency
91. 4:45Relief Administration, to give welfare payments to people who were desperate.
92. 4:49Alright.
93. 4:50Let’s go to the ThoughtBubble.
94. 4:51Roosevelt worried about people becoming dependent on relief handouts, and preferred programs
95. 4:55that created temporary jobs.
96. 4:57One section of the NIRA created the Public Works Administration, which appropriated $33
97. 5:02billion to build stuff like the Triborough Bridge.
98. 5:05So much for a balanced budget.
99. 5:06The Civil Works Administration, launched in November 1933 and eventually employed 4 million
100. 5:11people building bridges, schools, and airports.
101. 5:15Government intervention reached its highest point however in the Tennessee Valley Authority.
102. 5:19This program built a series of dams in the Tennessee River Valley to control floods,
103. 5:23prevent deforestation, and provide cheap electric power to people in rural counties in seven
104. 5:28southern states.
105. 5:29But, despite all that sweet sweet electricity, the TVA was really controversial because it
106. 5:33put the government in direct competition with private companies.
107. 5:37Other than the NIRA, few acts were as contentious as the Agricultural Adjustment Act.
108. 5:42The AAA basically gave the government the power to try to raise farm prices by setting
109. 5:47production quotas and paying farmers to plant less food.
110. 5:50This seemed ridiculous to the hungry Americans who watched as 6 million pigs were slaughtered
111. 5:54and not made into bacon.
112. 5:57Wait, Stan, 6 million pigs?
113. 6:00But…bacon is good for me...
114. 6:02Only property owning farmers actually saw the benefits of the AAA, so most African American
115. 6:06farmers who were tenants or sharecroppers continued to suffer.
116. 6:10And the suffering was especially acute in Oklahoma, Texas, Kansas, and Colorado, where
117. 6:15drought created the Dust Bowl.
118. 6:17All this direct government intervention in the economy was too much for the Supreme Court.
119. 6:21In 1936 the court struck down the AAA in U.S. v. Butler.
120. 6:25Earlier in the Schechter Poultry case (AKA the sick chicken case - finally a Supreme
121. 6:30Court case with an interesting name) the court invalidated the NIRA because its regulations
122. 6:35“delegated legislative powers to the president and attempted to regulate local businesses
123. 6:40that did not engage in interstate commerce.”[1] Thanks, ThoughtBubble.
124. 6:43So with the Supreme Court invalidating acts left and right, it looked like the New Deal
125. 6:47was about to unravel.
126. 6:48FDR responded by proposing a law that would allow him to appoint new Supreme Court justices
127. 6:53if sitting justices reached the age of 70 and failed to retire.
128. 6:57Now, this was totally constitutional – you can go ahead at the Constitution, if Nicolas
129. 7:01Cage hasn’t already swiped it – but it seemed like such a blatant power grab that
130. 7:05Roosevelt’s plan to “pack the court” brought on a huge backlash.
131. 7:09Stop everything.
132. 7:10I’ve just been informed that Nicolas Cage stole the Declaration of Independence not
133. 7:13the Constitution.
134. 7:14I want to apologize to Nic Cage himself and also everyone involved in the National Treasure
135. 7:19franchise, which is truly a national treasure.
136. 7:22Anyway, in the end, the Supreme Court began upholding the New Deal laws, starting a new
137. 7:26era of Supreme Court jurisprudence in which the government regulation of the economy was
138. 7:30allowed under a very broad reading of the commerce clause.
139. 7:34Because really isn’t all commerce interstate commerce?
140. 7:37I mean if I go to Jimmy John’s, don’t I exit the state of hungry and enter the state
141. 7:42of satisfied?
142. 7:43Thus began the Second New Deal shifting focus away from recovery and towards economic security.
143. 7:48Two laws stand out for their far-reaching effects here, the National Labor Relations
144. 7:52Act, also called the Wagner Act, and the Social Security Act.
145. 7:55The Wagner Act guaranteed workers the right to unionize and it created a National Labor
146. 7:59Relations Board to hear disputes over unfair labor practices.
147. 8:02In 1934 alone there were more than 2,000 strikes, including one that involved 400,000 textile
148. 8:08workers.
149. 8:09Oh, it’s time for the Mystery Document?
150. 8:10Man, I wish there were a union to prevent me from getting electrocuted.
151. 8:14The rules here are simple.
152. 8:15I guess the author of the Mystery Document.
153. 8:17And I’m usually wrong and get shocked.
154. 8:19“Refusing to allow people to be paid less than a living wage preserves to us our own
155. 8:24market.
156. 8:25There is absolutely no use in producing anything if you gradually reduce the number of people
157. 8:30able to buy even the cheapest products.
158. 8:33The only way to preserve our markets is an adequate wage.”
159. 8:36Uh I mean you usually don’t make it this easy, but I’m going to guess that it’s
160. 8:40Franklin Delano Roosevelt.
161. 8:42Dang it!
162. 8:43Eleanor Roosevelt?
163. 8:45Eleanor.
164. 8:46Of course it was Eleanor.
165. 8:48Gah!
166. 8:49The most important union during the 1930s was the Congress of Industrial Organizations,
167. 8:53which set out to unionize entire industries like steel manufacturing and automobile workers.
168. 8:58In 1936 the United Auto Workers launched a new tactic called the sit-down strike.
169. 9:03Workers at the Fisher Body Plant in Flint, Michigan simply stopped working, sat down,
170. 9:08and occupied the plant.
171. 9:09Eventually GM agreed to negotiate, and the UAW won.
172. 9:13Union membership rose to 9 million people as “CIO unions helped to stabilize a chaotic
173. 9:18employment situation and offered members a sense of dignity and freedom.”[2]
174. 9:23That quote, by the way, is from our old buddy Eric Foner.
175. 9:25God, I love you, Foner.
176. 9:26And unions played an important role in shaping the ideology of the second New Deal because
177. 9:30they insisted that the economic downturn had been caused by underconsumption, and that
178. 9:34the best way to combat the depression was to raise workers’ wages so that they could
179. 9:39buy lots of stuff.
180. 9:41The thinking went that if people experienced less economic insecurity, they would spend
181. 9:45more of their money so there were widespread calls for public housing and universal health
182. 9:49insurance.
183. 9:50And that brings us to the crowning achievement of the Second New Deal, and/or the crowning
184. 9:54achievement of its Communist plot, the Social Security Act of 1935.
185. 9:58Social Security included unemployment insurance, aid to the disabled, aid to poor families
186. 10:03with children, and, of course, retirement benefits.
187. 10:05It was, and is, funded through payroll taxes rather than general tax revenue, and while
188. 10:10state and local governments retained a lot of discretion over how benefits would be distributed,
189. 10:15Social Security still represented a transformation in the relationship between the federal government
190. 10:19and American citizens.
191. 10:21Like, before the New Deal, most Americans didn’t expect the government to help them
192. 10:24in times of economic distress.
193. 10:27After the New Deal the question was no longer if the government should intervene, but how
194. 10:31it should.
195. 10:32For a while, the U.S. government under FDR embraced Keynesian economics, the idea that
196. 10:36the government should spend money even if it means going into deficits in order to prop
197. 10:40up demand.
198. 10:41And this meant that the state was much more present in people’s lives.
199. 10:44I mean for some people that meant relief or social security checks.
200. 10:47For others, it meant a job with the most successful government employment program, the Works Progress
201. 10:52Administration.
202. 10:53The WPA didn’t just build post offices, it paid painters to make them beautiful with
203. 10:58murals, it paid actors and writers to put together plays, and ultimately employed more
204. 11:02than 3 million Americans each year until it ended in 1943.
205. 11:05It also, by the way, payed for lots of photographers to take amazing photographs, which we can
206. 11:11show you for free because they are owned by the government so I’m just going to keep
207. 11:15talking about how great they are.
208. 11:16Oh, look at that one, that’s a winner.
209. 11:18Okay.
210. 11:19Equally transformative, if less visually stimulating, was the change that the New Deal brought to
211. 11:23American politics.
212. 11:24The popularity of FDR and his programs brought together urban progressives who would have
213. 11:28been Republicans two decades earlier, with unionized workers - often immigrants, left
214. 11:33wing intellectuals, urban Catholics and Jews.
215. 11:36FDR also gained the support of middle class homeowners, and he brought African Americans
216. 11:40into the Democratic Party.
217. 11:41Who was left to be a Republican, Stan?
218. 11:43I guess there weren’t many, which is why FDR kept getting re-elected until, you know,
219. 11:47he died.
220. 11:48But, fascinatingly, one of the biggest and politically most important blocs in the New
221. 11:51Deal Coalition was white southerners, many of whom were extremely racist.
222. 11:55Democrats had dominated in the South since the end of reconstruction, you know since
223. 11:59the other party was the party of Lincoln.
224. 12:00And all those Southern democrats who had been in Congress for so long became important legislative
225. 12:05leaders.
226. 12:06In fact, without them, FDR never could have passed the New Deal laws, but Southerners
227. 12:09expected whites to dominate the government and the economy and they insisted on local
228. 12:14administration of many New Deal programs.
229. 12:16And that ensured that the AAA and the NLRA would exclude sharecroppers, and tenant farmers,
230. 12:22and domestic servants, all of whom were disproportionately African American.
231. 12:26So, did the New Deal end the depression?
232. 12:28No.
233. 12:29I mean, by 1940 over 15% of the American workforce remained unemployed.
234. 12:33But, then again, when FDR took office in 1933, the unemployment rate was at 25%.
235. 12:39Maybe the best evidence that government spending was working is that when FDR reduced government
236. 12:44subsidies to farms and the WPA in 1937, unemployment immediately jumped back up to almost 20%.
237. 12:51And many economic historians believe that it’s inaccurate to say that government spending
238. 12:54failed to end the Depression because in the end, at least according to a lot of economists,
239. 12:58what brought the Depression to an end was a massive government spending program called
240. 13:03World War II.
241. 13:04So, given that, is the New Deal really that important?
242. 13:06Yes.
243. 13:07Because first, it changed the shape of the American Democratic Party.
244. 13:10African Americans and union workers became reliable Democratic votes.
245. 13:13And secondly, it changed our way of thinking.
246. 13:15Like, liberalism in the 19th century meant limited government and free-market economics.
247. 13:20Roosevelt used the term to refer to a large, active state that saw liberty as “greater
248. 13:26security for the average man.”
249. 13:28And that idea that liberty is more closely linked to security than it is to, like, freedom
250. 13:31from government intervention is still really important in the way we think about liberty
251. 13:36today.
252. 13:37No matter where they fall on the contemporary political spectrum, politicians are constantly
253. 13:40talking about keeping Americans safe.
254. 13:43Also our tendency to associate the New Deal with FDR himself points to what Arthur Schlessinger
255. 13:47called the “imperial presidency.”
256. 13:49That is, we tend to associate all government policy with the president.
257. 13:53Like, after Jackson and Lincoln’s presidencies Congress reasserted itself as the most important
258. 13:58branch of the government.
259. 13:59But that didn’t happen after FDR.
260. 14:00But above all that, the New Deal changed the expectations that Americans had of their government.
261. 14:05Now, when things go sour, we expect the government to do something.
262. 14:09We’ll give our last words today to Eric Foner, who never Foner-s it in, the New Deal
263. 14:14“made the government an institution directly experienced in Americans’ daily lives and
264. 14:19directly concerned with their welfare.”[3] Thanks for watching.
265. 14:23I’ll see you next week.
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273. 14:45be awesome.
274. 14:46________________ [1] Foner.
275. 14:47Give me Liberty ebook version p. 870 [2] Foner.
276. 14:48Give me Liberty ebook version p. 873 [3] Give me Liberty ebook version p. 898