The New Deal’s New Deal

By Brianna Devlin

3 years after the Wall Street Crash of 1929, Herbert Hoover, the incumbent president, campaigned against Franklin D. Roosevelt in the 1932 presidential election. The Great Depression and the global spread of economic decline it caused, undoubtedly had an effect on the 1932 presidential election. Herbert Hoover, who was president at the time of the stock market crash, and the years following, lost his reelection to FDR. FDR lined his campaign with promises for welfare and economic reforms which would provide the nation with what he coined “New Deals” for the people that Hoover could not provide during his administration.[1] Similarly to the Great Depression, the current global pandemic has had worldwide economic consequences. Unlike the Great Depression, many countries have recognized a potential economic depression with consequences similar to the Great Depression and have put preemptive economic policies in place. In the current presidential election, presidential runners have endorsed or criticized economic stimulus policies that would work to prevent the risk of a severe economic depression.

Although the parallels between the Great Depression and our current economic decline could be considered slight, the current, preemptive “New Deal” type policies being drafted and endorsed during the 2020 campaign cycle that reflects FDR’s 1932 campaign style. While no one can predict the outcome of the 2020 election, it bears a resemblance to the campaigns leading up to the 1932 election: a Republican incumbent campaigning against a Democratic household-name during a time of economic uncertainty. While not to argue the political and moral alignments and how they differ between the 1932 and 2020 presidential candidates, it is interesting to note the parallel power dynamics between parties and candidates during a time of economic uncertainty nearly 90 years apart. FDR campaigned a few years after the consequences of the stock market of 1929 had its chance to unfold, naturally, the current global economic situation has yet to unfold to such lengths as the Great Depression, if it leads down that path at all. It does beg the question: does history repeat itself, and if so, does history have enough repetitive patterns to learn from?

FDR’s policies were social and economic reform programs that lessened the strain of the Great Depression. His New Deal policies ranged from unemployment pay through the Federal Emergency Relief Administration to job creation and expansion agencies like the Civil Works Administration and the Works Progress Administration.[2] Many of FDR’s policies affect and influence American life and politics today. In continuation of worker’s rights, FDR created the National Recovery Act which instituted a mandatory minimum wage per hour and gave rights to labor unions, as well as creating the Public Works Administration which created and promoted long-term projects maintaining and building public works infrastructure.[3] FDR created a legacy in his policies that not only continues to affect our political landscape almost 90 years later but also provides a map to follow when faced with worldwide economic disaster. Much like the 1932 election coinciding with a crack in the already frail economic system, our current 2020 campaign cycle shows symptoms of Great Depression-like consequences.

As unemployment and underemployment rates start to slowly rise due to pandemic related shutdowns, stimulus check policies have already been pushed through in an attempt to slow the consequences of mass business closures. While the CARES Act, the $2 trillion stimulus package that is being dispersed to 88 million Americans,[4] is still slowly distributing stimulus checks in the upcoming weeks, there is new attempts and predictions of new rounds of stimulus checks. Although unemployment rates were only at 4.4% by the end of March,[5] unemployment rates are predicted to increase to around 14% by June.[6] With the risk of a quickly escalating unemployment rate a proposal was given of the Emergency Money for the People Act, which would give eligible citizens $2,000 a month for at least six months.[7] While this act is in the very early stages and will likely face several changes if it is passed, bears resemblance to FDR era “New Deals.” In an attempt to step ahead of the predicted rise in unemployment, another proposal was offered called the “Getting America Back To Work Act.” This act would provide refundable payroll tax rebates to companies impacted by COVID-19, but only for companies who rehired former employees let go due to the pandemic.[8] While not the ideal act to benefit all those who are impacted by unemployment, or even retirement and social security, it is a temporary solution that could potentially slow the predicted sharp rise in unemployment.

While the parallels between FDR’s New Deal campaigns and policies with the current pandemic stimulus packages are not so cut and paste, there is a pattern to follow. A question remains whether history repeats itself and is there a lesson to be learned from that repetition? The Great Depression was a post-industrial age economic depression that paved a new path for modern economic policies. In retrospect, the lessons learned from the Great Depression was a new, modern lesson during it’s time, providing for a mass wave of new policies improving aspects of, at the time, modern society; a wave of policies that could only come after a major catastrophe. With the current economic downturn we are facing in 2020, we can recognize the economic patterns and trends that lead to the Great Depression and take preventative measures, in hopes of avoiding Great Depression-esque ramifications.

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[1] Kenneth T. Walsh, “The Most Consequential Elections in History: Franklin Delano Roosevelt and the Election of 1932,” US News, Sept 10, 2008, https://www.usnews.com/news/articles/2008/09/10/the-most-consequential-elections-in-history-franklin-delano-roosevelt-and-the-election-of-1932.

[2] Walsh, “Consequential.”

[3] Walsh, “Consequential.”

[4] Zack Friedman, ““What Your Next Stimulus “Check” Really Might Look Like,” Forbes, April 25, 2020, https://www.forbes.com/sites/zackfriedman/2020/04/25/next-stimulus-package/#6f52688b7cb1.

[5] “National Employment Monthly Update,” National Conference of State Legislatures, last modified April 3, 2020. https://www.ncsl.org/research/labor-and-employment/national-employment-monthly-update.aspx.

[6] Friedman, “Next Stimulus “Check.””

[7] Friedman, “Next Stimulus “Check.””

[8] Friedman, “Next Stimulus “Check.””

Friedman, Zack. “What Your Next Stimulus “Check” Really Might Look Like.” Forbes, April 25, 2020. https://www.forbes.com/sites/zackfriedman/2020/04/25/next-stimulus-package/#6f52688 b7cb1.

National Conference of State Legislatures. “National Employment Monthly Update.” Last modified April 3, 2020. https://www.ncsl.org/research/labor-and-employment/national-employment-monthly-upd ate.aspx.

Walsh, Kenneth T. “The Most Consequential Elections in History: Franklin Delano Roosevelt and the Election of 1932.” US News, Sept 10, 2008. https://www.usnews.com/news/articles/2008/09/10/the-most-consequential-elections-in-h istory-franklin-delano-roosevelt-and-the-election-of-1932.