American Culture in transition

American Culture in transition

Franklin D. Roosevelt was born in 1882 at Hyde Park New York, which is now a national historic site. He was elected to the New York senate in 1910 and was the Democratic nominee for vice-president in 1920.He was stricken with polio in 1921 was able to regain the use of his legs through exercise and swimming. Roosevelt became Governor of New York in 1928, and the Wall Street crashed in October 1929 to create the worst depression in American history. In 1932, Roosevelt was elected the 32nd president of the United States. This was mainly due to his success as the governor of New York. In his acceptance speech to the nomination as the Democratic presidential candidate, Roosevelt had told the American people that he pledged himself and the American people to a new deal (McJimsey, 2001).

The New Deal is a series of economic programs that were passed by Congress during the first term of Roosevelt’s tenure as president. These plans were a response to the Great Depression and focused on 3 R’s: relief, recovery and reform. They concerned relief for poor and unemployed citizens, recovery of the economy from the depression and major reforms in the fiscal system to prevent another depression. During the first 100 days in office, Roosevelt’s administration passed banking relief programs, work relief programs, emergency relief programs and agricultural programs. Historians have debated on whether or not Roosevelt’s New Deal prolonged the Great Depression. I am of the opinion that the new deal actually curtailed the effects of the Great Depression.

The Banking Act of 1933 was passed during the administration of President Roosevelt in light of the adverse conditions of the Great Depression. It called for a four-day mandatory closure of all United States banks for inspection before being re-opened. Roosevelt asked congress to pass legislation to guarantee that savers would not lose their money in case there was another financial crisis. This Act was necessary because by the beginning of 1933 American people were losing faith in the banking system and many were withdrawing money to keep at home.

The gold standard is a monetary standard that ties a unit of money to a stated amount of gold. The Gold Reserve Act of 1934 took away title to all gold and gold certificates held by the Federal Reserve Bank. It made the possession, trade of gold anywhere in the world a criminal offence for United States Citizens. It was enacted because domestic and foreign demand led to fear that banks would fail due to insufficient gold stocks to cover demand (Burns & Dunn, 2004).

The Federal Deposit Insurance Corporation was created by President Roosevelt in 1933.It was meant to provide federal government guarantee of deposits and create public confidence in the banking systems. Since 1934, no depositor has ever lost any money due to bank failure. The Securities and Exchange Commission was created in 1934 to put regulations on the securities industry, enforce securities laws and protect investors from fraud. It provides governance of securities law in the secondary market. Fannie Mae means Federal National Mortgage Association (Burns & Dunn, 2004). It was created in 1934 in response to a tight supply of money and failure of banks that made mortgage finance almost impossible to secure. It was created to make mortgage markets stable by insuring home loans.

The recession of 1937 is also known as Roosevelt depression. It was occasioned by cut in government spending fuelled by good economic news in 1936.It was a result of excessive government regulation, not tight fiscal and money policy. It is clear from the positive effects that the new deal had that it was needed to lift the economy from ruin. The few hiccups that occurred were not because of the programs but excessive regulation that occurred. This indicates that government intervention during desperate economic times is necessary. However, unnecessary strict regulations are a threat of their own and can lead to economic trouble like the recession of 1967.

References

Burns, J. M., & Dunn, S. (2002). The three Roosevelts: patrician leaders who transformed America. New York, NY: Grove

McJimsey, G. T. (2001). Documentary history of the Franklin D. Roosevelt presidency. Bethesda, MD: University Publications of America