Chapter 2 Excerpt
With the failed realities of the country’s economic, industrial, and agricultural policies staring Roosevelt in the face, the administration designed the basic programs to help correct these problems. The CCC was one of the key programs to rejuvenate the country, restoring trees that had once sheltered the land from the now unchecked winds that blew across the Midwest and to help prevent erosion that was robbing the land of what little useful topsoil remained. The loss of trees in the barren soil coupled with unrestrained winds brought dust storms, and worsened the already-blighted existence of the families trying to survive in the Depression’s path. This geological condition created one of Roosevelt’s biggest economic problems—mass migration of families off the farmlands. The labor he needed to accomplish his goals was now in the inner cities, shanty towns, or working as migrant laborers all across America.
The newly elected president worked swiftly. Within a hundred days of his inauguration, FDR had signed the Emergency Conservation Corps (ECW) bill. The ECW bill married the strengths of the nation’s young men to FDR’s mission of reclaiming the decimated lands of the western states. The land recovery bill was only part of Roosevelt’s reforms in his first hundred days. Other areas of reform included insurance for bank deposits (FDIC), refinancing for home mortgages (getting people back home), Wall Street reforms, four billion dollars in federal relief spending, legalization of beer, the Tennessee Valley Authority, and the Agricultural Adjustment Administration. After the days of laissez-faire capitalism in the Roaring Twenties, Roosevelt was carving out a new mission for government in the thirties, with reform bills the likes of which few had ever imagined.
While some policies helped increase output, others seemed to produce strange outcomes. For example, the Agricultural Adjustment Act (AAA) provided crop subsidies to farmers to not farm—and even destroy their crops and animals (which included the destruction of six million swine)—so that prices would rise. The political commotion rising from these policies was to continue for some time with protests of prominent officials not being heard. Speaking on behalf of disbelievers, Henry Wallace, then secretary of agriculture, exclaimed of such programs, “I hope we shall never have to resort to it again. To destroy a standing crop goes against the soundest instincts of human nature.” Keynes was also critical of the policy of creating higher agricultural prices by limiting supply. In his open letter to the president, he wrote, “Thus rising prices caused by deliberately increasing prime costs or by restricting output have a vastly inferior value to rising prices which are the natural result of an increase in the nation’s purchasing power.” Walter Lippmann, a noted political commentator of the time, summed up the dissenting opinion when he wrote: “The excessive centralization and the dictatorial spirit are producing revulsion of feeling against bureaucratic control of American economic life.”
Despite the criticism, Roosevelt created still other programs to “prime the pump” of consumption, such as the SSA, the SEC, and the NRA. With more of the so-called “alphabet soup” of his programs, Roosevelt did get money into the hands of consumers. By creating the Social Security Act (SSA) in 1935, he ensured a steady subsidy, but not a pension plan, to the elderly and infirm members of this consumer-driven economy that had few available consumers.