Republican leaders blamed poor Americans for the Great Depression, saying they drained the economy because they refused to work hard enough. “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate,” Treasury Secretary's Mellon told Hoover. “It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.”
But the problem was not poor workers. The rising standards of living that had gotten so much attention in the new magazines of the 1920s mainly benefited white, middle-class, urban Americans. Farm prices crashed after WWI, leaving rural Americans falling behind, while workers’ wages did not rise along with production. The new economy of the 1920s benefited too few Americans to be sustainable.
Hoover tried to reverse the economic slide by cutting taxes and reassuring Americans that “the fundamental business of the country…is on a sound and prosperous basis.” But he rejected public works programs to provide jobs, saying that such projects were a “soak the rich” scheme that would “enslave” taxpayers, and called instead for private charity.
Wow - some things never change!
By 1932, Americans were ready to try a new approach. They turned to New York Governor Franklin Delano Roosevelt, who promised to use the federal government to provide jobs and a safety net to enable Americans to weather hard times. He promised the American people a “New Deal”: a government that would work for everyone, not just for the wealthy and well connected.
Under Roosevelt, Democrats protected workers’ rights, provided government jobs, regulated business and banking, and began to chip away at racial segregation. New Deal agencies employed more than 8.5 million people, built more than 650,000 miles of highways, built or repaired more than 120,000 bridges, and put up more than 125,000 buildings.
They regulated banking and the stock market and gave workers the right to bargain collectively. They established minimum wages and maximum hours for work. They provided a basic social safety net and regulated food and drug safety. And when World War II broke out, the new system enabled the United States to defend democracy successfully against fascists both at home—where by 1939 they had grown strong enough to turn out almost 20,000 people to a rally at Madison Square Garden—and abroad.
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The drawing of the Stock Market Crash
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