According to David Kennedy book, The American people in the great depression freedom from fear part one, Kennedy argues that it was not really the stock market crash of 1929 that caused the fear in the American people but the wars which American fought. The main culprit of this depression was the World War 1. He also claims that the fall of an obscure bank in Vienna had a hand in the great depression.
According to David Kennedy the years between the great depression and the Second World War was a year of bewilderment and changes for the people of America since this has not happened in any one lifetime. Being that they suffered the great depression and then before they were fully recovered they suffered the Second World War, a war far worse than has been seen in human history. “These changes included a transition from economic and social paralysis to unprecedented outburst of national energy (Kennedy, 2001, pg Xiii)
With Franklin D. Roosevelt new deals had different views on it being that some people saw it as the way to recovery but some people like Amity shlaes in her book the forgotten man saw Roosevelt’s deal as hindrance to the recovery. David Kennedy begs to differ and does not want to accept this simplicity. “He traces the complex play between continuing stagnations and Roosevelt’s remarkable program of social and economic reform. When Roosevelt came to power he found a deficit which was in excess of 60% of the federal government expenditure which was unprecedented in the American history. According to Kennedy, Roosevelt found a government which was positively minuscule in comparison to the state governments and their budgets.
Roosevelt introduced three bills in his first hundred days in office the first being the Beer-wine revenue act. This was done in anticipation of the end to prohibitions. The second was the economy act which was supposed to cut about $500 000 000 from the federal budget and the third being the banking act.
While shale claims that Roosevelt budget was only geared towards helping not the taxpayer but the person at the bottom of the economic heap. Kennedy begs to differ in a sense that he says that what made Roosevelt take such action was the panic which came about in 1933 when people got to the banks and withdrew all their savings either in gold or currency to put them under the mattress. Since people were disillusioned with the depression and they had witnessed about five thousand banks closing in the past three years (Kennedy, 2001, pg 131). Although Kennedy admits that the banking act was hastily put up as he quoted Raymond Moley that the advisor “forgot to be democrats or republican because they nations banking sector was teetering on collapse.” The banking act was levered in eighty intensive hours by the new advisors of Roosevelt and the previous appointees of Hoover. This was done in the first 100 days of Roosevelt presidency since he understood what was needed and had to be done. The banking act was put together because the country was under siege since most people had taken a cue from the governor of Michigan who had declared a eight day banking holiday in Michigan. The governor wanted to protect his banks from collapsing but instead it caused a tremor which went through out the country (2001) “The American took this action due to the fact that they had suffered for more than three years and had no faith in their banking system. (pg131) According to Kennedy the emergency banking act furnished a startling demonstration for action and congress willingness to submit to his leadership. But did nothing to address the capitalist system the American had. After this bill was passed it restore at least some faith in Roosevelt leadership and also in the banking sector even if it did not address the root cause of the problem. (pg 136)
The second emergency measure which Roosevelt took was sent to the congress on March 10th this was the cutting of Federal Reserve by $500 million. Roosevelt called on the elimination of some government agencies since he said that due to this the government had been going on the road towards bankruptcy for the past three years. Roosevelt also asked for the reduction of civil servant salary and military employees. This also included the salaries of the congressmen and he also requested a cut of almost 50% from the veteran payment. Roosevelt signed this act on March 20th which was followed later on by the beer act. (pg136)
While shale would argue that Roosevelt “ with his brain trust of outside experts, he transformed the way the federal government did business by centralizing power at the expense of the individual states. Kennedy argues that Roosevelt saved the economy of America, ended the banking crisis. Roosevelt also drastically cut on the federal budget expenditure while providing for the new revenue with the re-legalization of the beer and light wines (pg 137) Kennedy also argues that the president had also taken on two of the most powerful lobby groups in Washington and vanquished them. The lobby groups were the veteran and the prohibitionists. Even though Shlae claims that Roosevelt hired thousands of out of work writers and photographers to portray the daily life of American towns and cities and evangelize the new deal. Kennedy would argue that what Roosevelt did brought the American people out of its stagnancy and gave them the will to have confidence in their country. He was able to rekindle the country’s confidence in itself. He was also able to lead and the congress was able to follow. Although Kennedy admits that Roosevelt’s’” new deal was not really new since his banking act was implementation of Hoovers treasury, his economy bill was the fulfillment of his campaign promise, the beer bill was archconservative Raskob political objective. He had the guts to lead America out of its darkest age and that was what the American people needed.