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Unformatted text preview: e market. Reconstruction Finance Corporation –
Theoretically, through lending money to groups at
the top of the economy, the RFC was going to
help people all over (filter-down system), but it
- But on the other hand, there was the Hawley-Smoot
Tariff (1930) i.e. one of the biggest mistakes ever, as it
raised tariffs ultra high and therefore totally killed off
foreign trade. To balance the budget, Hoover then
decreased expenditures and increased taxes (Revenue
Act of 1932). Wow, somebody slap him!
- The basic problem was this: Hoover was too much of a
traditionalist to give up the balanced budget idea (he
vetoed a bunch of relief bills for this reason, and he also
refused to repeal Prohibition). But as far as he could w/o
giving that up, he did try to reform, so he can be thought
of as a bridge between the 20s and FDR. 202 *The Presidential Election of 1932*
- The Republicans ran Hoover, e/t he was pretty much
screwed due to his poor leadership abilities (no inspiring
speeches and such), while the Democrats picked New
York Governor Franklin Delano Roosevelt, who
supported direct relief payments for the unemployed and
extensive public works as governor.
- In order to find a good platform, Roosevelt gathered a
“Brain Trust” of lawyers and university professors.
Together, they decided that the gov’t had to regulate
business and restore purchasing power to the masses by
cutting production, which would lead to rising prices and
rising wages (“economics of scarcity”).
- But Roosevelt also believed in direct unemployment
relief and repealing prohibition, which, when combined
with the whole Bonus Army debacle in 1932 (where
WWI vets marched to Washington to ask for their
pensions and had the army turn on them), led to a
landslide victory for him.
*FDR’s First Term: The First Hundred Days and the New
- So, other than proclaim that we have nothing to fear but
fear itself (in FDR’s inaugural address), which helped
people stop freaking out, what the heck did FD...
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- Fall '10