Chapter 33

With the nation mired in the depths of the Depression, patrician New York governor Franklin D. Roosevelt crushed the incumbent Herbert Hoover in the election of 1932, sweeping all but a handful of states. Roosevelt offered few concrete specifics during the campaign, but his confident, buoyant manner — a striking contrast to Hoover's grim caution — persuaded desperate voters that he would act boldly.

Stricken by polio in 1921 and unable to walk unassisted, Roosevelt nonetheless projected extraordinary energy and optimism, famously promising Americans "a new deal" in his nomination acceptance speech. His inaugural address in March 1933 struck the keynote of his presidency, declaring memorably that "the only thing we have to fear is fear itself."

By Roosevelt's inauguration, the banking system was collapsing outright, with panicked depositors emptying accounts and states declaring emergency "bank holidays." Roosevelt's first act was to declare a national bank holiday, closing every bank in the country, while Congress rushed through the Emergency Banking Relief Act, allowing only financially sound banks to reopen under federal supervision.

Roosevelt then took to the airwaves for the first of his intimate radio "fireside chats," reassuring anxious Americans in plain, warm language that their money would be safer in a reopened bank than under a mattress. The gambit worked: confidence rushed back, and deposits soon exceeded withdrawals.

To address the farm crisis of collapsed crop prices, the Agricultural Adjustment Act (AAA) paid farmers to reduce production of staple crops and livestock, aiming to raise prices by shrinking supply. The policy proved painfully controversial — destroying crops and slaughtering livestock while many Americans went hungry — and the Supreme Court struck down the AAA's original processing tax as unconstitutional in 1936, though a revised version soon replaced it.

For industry, the National Industrial Recovery Act (NIRA) created the National Recovery Administration (NRA), which brought businesses, labor, and government together to set industry-wide codes on wages, hours, and prices, hoping to end ruinous competitive price-cutting and stabilize the economy.

The Civilian Conservation Corps (CCC) put some three million unemployed young men to work on conservation projects — planting trees, fighting erosion, and building trails in national parks and forests — while sending most of their modest wages home to their families. The program combined relief with popular environmental improvement and remained one of the New Deal's most beloved achievements.

The Public Works Administration (PWA) funded large-scale infrastructure — dams, bridges, schools — while the later Works Progress Administration (WPA), created in 1935 under Harry Hopkins, employed millions of Americans on public projects ranging from roads and buildings to murals, theater productions, and writers' guides, becoming the centerpiece of what historians call the "Second New Deal."

Among the New Deal's most ambitious achievements was the Tennessee Valley Authority (TVA), created in 1933 to build a chain of dams along the Tennessee River. The project controlled catastrophic flooding, generated cheap electric power for a chronically impoverished region, and produced fertilizer, all while providing thousands of jobs during construction.

The TVA also served as a demonstration of what direct federal ownership and planning could accomplish, providing the entire region with electricity for the first time and becoming a model — and a lightning rod for critics who saw it as dangerously close to socialism — for regional development programs.

The landmark Social Security Act of 1935 created a permanent federal system of old-age pensions funded through payroll taxes, along with unemployment insurance and aid to dependent children and the disabled. Though initially excluding many agricultural and domestic workers — disproportionately Black Americans — it established a lasting foundation of the American social safety net.

The National Labor Relations Act, or Wagner Act, of 1935 guaranteed workers the right to organize unions and bargain collectively, and established the National Labor Relations Board to enforce those rights. Union membership surged as the Congress of Industrial Organizations (CIO) organized millions of unskilled industrial workers previously ignored by craft unions.

The New Deal drew fire from critics on both the left and right. Conservative businessmen, organized in the American Liberty League, condemned Roosevelt's programs as an assault on free enterprise and the Constitution. From the populist left, Louisiana senator Huey Long built a massive following with his "Share Our Wealth" scheme, promising every family a guaranteed income funded by confiscatory taxes on the rich, before his assassination in 1935.

Radio priest Father Charles Coughlin turned from early support of Roosevelt to bitter denunciation over the airwaves, while Dr. Francis Townsend rallied the elderly behind his own pension scheme. Together these rival plans pressured Roosevelt to move further left with the "Second New Deal" of 1935, including Social Security itself.

Fresh off his overwhelming reelection in 1936, Roosevelt struck back at a conservative Supreme Court that had struck down the NRA, the AAA, and other New Deal measures. His 1937 "court-packing" plan proposed adding up to six new justices for every sitting member over age seventy, a transparent attempt to tilt the Court in his favor.

The scheme provoked a fierce bipartisan backlash as an assault on the separation of powers, and Congress ultimately rejected it — Roosevelt's first major political defeat. Yet the Court soon began upholding New Deal legislation regardless (dubbed "the switch in time that saved nine"), and subsequent retirements let Roosevelt reshape the Court's makeup through ordinary appointments.

Though a sharp recession in 1937–1938 revealed the New Deal had not fully cured the Depression — only the mobilization for World War II would finally do that — Roosevelt's programs permanently expanded the federal government's role in economic life, established the modern social safety net, and reshaped American politics for generations to come.