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The GREAT DEPRESSION & the NEW DEAL [APUSH Unit 7 Topics 9-10] Period 7: 1898-1945 - YouTube
Channel: Heimler's History
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Well hey there and welcome back to Heimler’s
History. So we’ve been going through Unit
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7 of the AP U.S. History curriculum
and in the last video we considered
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the 1920s with all of its uproarious
roaring, but in this video it’s time
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to get depressed because we need to talk
about the Great Depression. So if you’re
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ready to get them brain cows milked limited
welfare state style, then let’s get to it.
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So in this video I’m going
to try to do the following:
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Explain the causes of the Great
Depression and its effects on the economy.
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So despite the cultural and moral crises
that were playing out in the 1920s, it was,
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in general an era of American prosperity,
not for all, but for a lot of people. But
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all that prosperity came crashing down on
October 29th, 1929, otherwise known as Black
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Tuesday when the stock market crashed. Now to
be clear, the crash was a weeks-long process,
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but generally speaking, the bottom fell
out on October 29th. So, what caused this?
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Well, first, farmers across the nation had
overproduced for several years and were therefore
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in severe debt. And you might wonder how in the
world OVER production can be a problem. Well,
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when you combine overproduction with high tariffs,
then baby, you got a depression stew going.
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Tariffs, which is to say, taxes on imports,
were exceedingly high in the 1920s. And in 1930,
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president Herbert Hoover signed the Hawley-Smoot
Tariff into law which crippled the ability of the
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United States to sell its excess products, both
agricultural and otherwise, on a global market. So
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that’s why agricultural overproduction put farmers
in a bad way leading up to the stock market crash.
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Additionally, the stock market itself was
artificially inflated during the 20s due
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to risky investment behavior like buying
on margin, otherwise known as speculation.
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Because it was assumed that the stock
market prices would continue to rise,
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then it became a common practice to borrow
money to buy stocks. And this was a good
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bet for a while because the stock prices rose
and you made back the money you had borrowed.
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But what happens when you borrow a bunch
of money you don’t have to buy stocks on
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the assumption that prices will increase and then
the bottom falls out? Well, in addition to losing
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all the value of your stock purchases, you’re also
in crushing debt without the funds to pay it back.
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So without getting too far into the weeds,
these were some of the causes of the stock
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market crash of 1929, which is generally
understood as the beginning of the Great
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Depression. Once the Depression hit Americans,
poverty and homelessness abounded and people
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began foreclosing on their home mortgages left and
right. And no small amount of people who had lost
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their homes took up residence in shantytowns which
they dubbed Hoovervilles after President Hoover.
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They did this as a criticism of Hoover’s laissez
faire economic policies at the beginning of the
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Great Depression. Hoover, as a Republican,
believed that given enough time, the economy
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would correct itself, and therefore minimal
government intervention was the right move.
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Now in 1932 it was time for a presidential
election and Democrat Franklin D. Roosevelt
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won in a landslide. Part of the reason is
because in the face of American suffering,
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Roosevelt was the opposite of Hoover. Roosevelt
campaigned on the promise of heavy government
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intervention, and once he came to power,
Roosevelt did more to expand the size and
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scope of the federal government than any
president before him. Now I know that some
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of my more conservative students just threw
up in their mouths a little when I said that,
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but you know, apparently that’s what the
majority of Americans wanted in 1932.
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And so it was under Roosevelt’s leadership
that policymakers in the 1930s responded to
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mass unemployment and social upheavals caused by
the Depression by transforming the United States
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into a limited welfare state, and that just
means that the government was going to take
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responsibility for the social and economic welfare
of its citizens. Now the big program you need to
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know here is Roosevelt’s New Deal which was the
banner under which many pieces of legislation
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were passed in order to shore up the American
economy and address joblessness in America.
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Now technically, there are two phases of the
New Deal, but I’m going to talk about it as if
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it was one thing so as to avoid confusion.
Now according to Roosevelt’s reckoning,
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the New Deal was there to address the
three R’s: relief for the unemployed,
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recovery for businesses, and reform of
economic institutions and let’s look at
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some of the New Deal legislative solutions
to each. Under relief for the unemployed,
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you saw works programs like the Public Works
Administration (PWA) which employed Americans
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to do federal infrastructure work like building
roads and dams and bridges. Similarly you had the
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Tennessee Valley Authority (TVA) which hired
people to run electric power plants which did
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work to control flooding and erosion. Also you
had the Civilian Conservation Corps (CCC) which
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employed young men between the ages of 18-24 to
manage soil conservation and forestry projects.
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Under the heading of recovery for businesses, you
should know the National Industrial Recovery Act
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of 1933. Roosevelt believed that one of the main
factors causing economic hardship was the cut
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throat competition in the business sector that had
caused workers’ wages to remain low which in turn
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meant that they couldn’t buy as much. So the NIRA
sought to resolve this problem by establishing
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a set of codes agreed upon by representatives
from the laboring community and representatives
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from competing corporations. These codes created
security for workers by establishing minimum wage
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levels, shorter working hours, and the regulation
of the prices of certain petroleum products.
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Under the heading of reform of economic
institutions, you need to know the
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Glass-Steagall Act of 1933. Because many folks
had lost confidence in the banking system,
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the Glass Steagall Act came in to shore up that
confidence. Essentially it increased regulation
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in banks and limited the ways banks could invest
people’s money. To this end, the Glass-Steagall
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Act gave birth to a new entity called the Federal
Deposit Insurance Corporation (FDIC) which
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guaranteed people’s bank deposits with federal
money. Additionally, under this heading you should
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know about the Securities and Exchange Commission
(SEC). Not only had people lost confidence in
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banks, but also, understandably, in the stock
market. The SEC was established to regulate the
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stock market and prevent turdish behavior
like buying on margin and insider trading.
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Now in the second phase of the New Deal,
you need to know about one of the most
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enduring programs that was established,
namely, the Social Security Act of 1935.
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This law provided for a safety net of income
for workers over the age of 65. Basically,
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part of a worker’s wages were withheld
by the federal government and then paid
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back to them when they reached retirement age.
And that program is still going strong today.
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So I’ve only named a fraction of the
New Deal programs, but what you need
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to remember about the New Deal as a whole is
that it transformed the United States into a
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limited welfare state and seriously expanded
the aims of modern American liberalism.
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Now it won’t surprise you to know that not
everyone was happy about big daddy government
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getting so heavily involved in American life.
And what’s kind of crazy is that the New Deal was
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criticized BOTH by liberals and conservatives.
Liberals griped because the New Deal did too
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much for big businesses at the expense of
the unemployed and poor. In other words,
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for some liberals, the New Deal wasn’t liberal
ENOUGH. Conservatives, on the other hand,
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criticized the New Deal because of the extreme
federal overreach that it represented. Now the
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conservatives on more than one occasion took
Roosvelt’s New Deal to the Supreme Court,
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won a few of the cases and effectively
narrowed the scope of what part of the
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New Deal was constitutional and
what part was unconstitutional.
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Now Roosevelt was none too happy about this
narrowing of his efforts by the Supreme Court so
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he proposed a judicial reorganization bill, also
known as the court packing scheme. Basically, the
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idea was that this bill would allow the president
to appoint new Supreme Court Justices for every
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justice that was older than 70.5 years. At that
time, that meant that Rooselvet could appoint six
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additional judges to the Supreme Court. Of course,
Roosevelt aimed to pack the court with judges
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sympathetic to the New Deal and theoretically the
judicial limitations on his programs would cease.
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However, whether that would have been
the case or not, we’ll never know,
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because both parties in Congress
strongly opposed this measure as
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an abuse of constitutional checks and balances.
TO them it seemed that Roosevelt was grabbing
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too close to dictatorial powers for their
taste, and so the bill never materialized.
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Now regardless of its success
and failures, the New Deal
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was a BIG Deal. [chuckle]. It left a legacy
of reforms and regulatory agencies in its
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wake while also fostering a long term political
realignment of Black people, working class folks,
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and ethnic minorities to the Democratic
Party, because those groups believed that
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Roosevelt and the New Deal sought to help them
in their suffering during the Great Depression.
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Okay, that’s what you need to know about Unit 7
topic 9 and 10 of the AP U.S. History curriculum.
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My Ultimate REview Packet is right here in
case you ended help getting an A in your
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class and a five on your exam in May. And
hey, if you’re not too depressed after this
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