Kotnarowski4.12 - John Kotnarowski Lecture Outline Looking...

John Kotnarowski
Lecture Outline: April 12, 2007
Looking 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)