Question

This week's material focuses on the horrific period of the Great Depression. This era led to significant changes within the United States as both government roles and individual relationships with the government vastly changed.

1. How did the role of the executive change during this period? Why did it change?
2. How did different individuals react to the Great Depression? Why was the response so varied?

Primary Sources:/Huey Long sources -
1. What does Long argue is wrong with the current plan of the government?
2. What does he suggest as an alternative?
3. How might Americans react to this idea? Would all agree?

Answer 1

1) How did the role of the executive change during this period? Why did it change?

The Great Depression caused a severe financial collapse, along with high unemployment, bank failures, homelessness and poverty. Great depression led to formation of Keynesian economics. Monetary policy failed to revive the economy, since there was no demand, irrespective of interest level. Keynes argued that when monetary policy is ineffective, fiscal policy should play the role to boost aggregate demand. Hence role of government/executive increased significantly during this period. Before great depression government spending was primarily directed towards the military.

2) How did different individuals react to the Great Depression? Why was the response so varied?

New York Stock Exchange lost 50% of its value. One of every four workers was unemployed. Banks failed and life savings were lost. Unemployed roamed the country on foot and in boxcars in futile search of jobs. People expected further deflation and a recession so that even interest rates at zero did not stimulate investment. Still, despite their far higher and longer-lasting record of unemployment, Depression-era Americans remained hopeful for the future. About half (50%) expected general business conditions to improve over the next six months, while only 29% expected a worsening. And fully 60% thought that opportunities for getting ahead were better (45%) or at least as good (15%) as in their father’s day. Large majorities favored the federal government providing free medical care for those unable to pay (76%). A 53%-majority expressed support for “the government’s policy of reducing relief expenditures at this time,” while opinion was split on whether farm benefits should be increased (39%), decreased (31%) or left the same (31%). Relatively few (25%) were ready to decrease soldiers’ pensions but only 24% wanted to see them increased.

1. What does Long argue is wrong with the current plan of the government?

Long charged that the nation’s economic collapse was the result of the vast disparity between the super-rich and everyone else. A recovery was impossible while 95% of the nation’s wealth was held by only 15% of the population. In Long’s view, this concentration of money among a handful of wealthy bankers and industrialists restricted its availability for average citizens, who were already struggling with debt and the effects of a shrinking economy. Because no one could afford to buy goods and services, businesses were forced to cut their workforces, thus deepening the economic crisis through a devastating ripple effect. Long believed that it was morally wrong for the government to allow millions of Americans to suffer in abject poverty when there existed a surplus of food, clothing, and shelter. He blamed the mass suffering on a capitalist system run amok and feared that impending civil unrest threatened the democracy.

2. What does he suggest as an alternative?

Huey Long unveiled his “Share Our Wealth” plan (also known as Huey Long's "Share the Wealth" plan), a program designed to provide a decent standard of living to all Americans by spreading the nation’s wealth among the people. Long proposed capping personal fortunes at $50 million each (roughly $600 million in today's dollars) through a restructured, progressive federal tax code and sharing the resulting revenue with the public through government benefits and public works. Long advocated free higher education and vocational training, pensions for the elderly, veterans benefits and health care, and a yearly stipend for all families earning less than one-third the national average income – enough for a home, an automobile, a radio, and the ordinary conveniences. Long also proposed shortening the work week and giving employees a month vacation to boost employment, along with greater government regulation of economic activity and production controls. He later proposed a debt moratorium to give struggling families time to pay their mortgages and other debts before losing their property to creditors.

3. How might Americans react to this idea? Would all agree?

The conservative national media dismissed Long’s program, lampooning Long as a "hick", "buffoon", "communist", "socialist" and "fascist dictator". Long countered that the national newspapers were the pawns of the wealthy Wall Street financiers who were threatened by his program. A political poll by the Roosevelt re-election team, the first national poll of its kind, revealed that Long was siphoning key Democratic support from FDR's campaign.