John KotnarowskiLecture Outline: April 12, 2007Looking Back:1). What caused the Depression?2). How does the U.S. get out of it (short of war)?The Depression and the New Deal:1). Did the New Deal handle the Depression effectively?•No: High unemployment and low business index (problems that are not reconciled until 1940-41 with rearmament)•It did help the nation (esp. inspiring confidence and purpose)2). Economic evaluation of the New Deal: •It failed:-Conservative/Business Response: The New Deal was the wrong way of going about dealing with the Depression. It was the work of an intrusive government making an already bad economic situation worse.-Bottom Line: FDR failed to inspire business confidence and as a result, businesses were less apt to invest, hire, explore, etc. In the end, there was insufficient investment to get out of the Depression.•Most likely, the problem was not with the government. It was with the traumatized business’ lack of self-confidence. It was probably not even possible to restore the lost confidence (ex. Hoover’s inability)
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