The New Deal

In 1934, President Roosevelt appointed a review board of the NRA which was headed by Clarence Darrow. “The board concluded that in certain industries monopolistic practices existed to the prejudice of the little independents.”(Mitchell, 257) This assessment of the NRA was absolutely devastating to those involved. Disputed by officials, Darrow further claimed “The hope for the American people, including the small business man, not to be overwhelmed by their own abundance, lies in the planned use of America’s resources following socialization.”(Mitchell, 257) The NRA came under extreme attack for essentially taking advantage of small businessmen, almost making it impossible to compete with big business who received virtual immunity from anti-trust laws. Darrow and his review board was shortly ended.

One of the most prominent criticisms of the Franklin Roosevelt was written by Jim Powell in 2003. The Book is titled FDR’s Folly and brings up several aspects of the New Deal and raises serious questions with the response the government made to the Great Depression. In regards to the New Deal as a whole being utterly ineffective, Powell brings up the high unemployment throughout the Great Depression. Something that despite all the money and legislation the Roosevelt administration threw at the problem, really had no great solution. “From 1934 to 1940, the median annual unemployment rate was 17.2 percent. At no point during the 1930s did unemployment go below 14 percent.”(Powell, VII) These statistics are very telling as to the situation this country endured. It was very unfortunate, but in creating our first national deficit, FDR did not resolve the primary issue in the United States. This is extraordinary when you consider the millions of jobs the New Deal did provide. Is Powell’s criticism of unemployment unfair, or did Roosevelt truly prolong the depression. There truly is no solid answer to this question, which is why after 75 years, the positive and negative aspects of the New Deal are still greatly debated. It is undeniable that the New Deal at the very least employed millions of people. It is also necessary to recognize that if the New Deal was not at the very least appearing beneficial, FDR would not have won three more elections. On the flip side, as Powell said, there are several aspects that in hindsight, we have the ability to question, and obviously, not everything quite adds up. Another criticism from Jim Powell is the tax increase during the depression. In reality, an increase in taxes seems necessary to accommodate some of the legislation passed by the Roosevelt administration, such as the creation of Social Security, which would allow $200 a month for retirement. This money had to come from somewhere, as did all of the other funding spent on various projects. However, in a time, where people are already fighting for their survival, a tax increase increases the difficulty rather than aiding these people. However, it is necessary to note, that Roosevelt’s intentions were not intentionally to increase taxes. “Although FDR had stated in his January 1935 budget message that there wouldn’t be any new taxes, on July 19, 1935, he suddenly new taxes in a message to Congress that appealed to envy. He called for a “a wider distribution of wealth” via graduated taxes on individuals and corporations.”(Powell, 80) This system he would put in place would infuriate conservatives and their constituents. Under FDR, the highest tax rate would reach 75% of income for those earning over $100,000. It is difficult to comprehend these extremely high tax rates, but in the state this country was in at the time, it appears that most legislation was intended to do good, for the greatest amounts of people.