Themes in American History: Capitalism, Slavery, Democracy

Blog Post #4- Rauchway’s Reflation and Relief

The reading Reflation and Relief by Rauchway describes how the United States managed to come back from the Great Depression using economic policies. Frank Delano Roosevelt took an approach that “was indeed to some degree part of American political tradition” (Isaiah Berlin, 1997) as he isolated the U.S. from the rest of the world. He didn’t pay much attention to overseas trade but focused on the “repair (of) finance, agriculture, and manufacturing” (Rauchway, Ch. 4). I was quite surprised to learn that Roosevelt managed to pull America out of the mud through policies that didn’t involve foreign affairs and wasn’t the only one as Berlin considered this approach as a “great social experiment.” 

The velocity of the economic change after the great depression shocked me. I was aware that the period after the great depression was one where the economy thrived, but I wasn’t aware that after the New Deal, the economy grew at rates of 8 to 10 percent a year and the unemployment rate drastically fell from its peak in 1932. All of this was completed in a matter of years. 

Overall the most interesting thing from this piece was the confidence that Americans had for Roosevelt. Nowadays we are used to a separation between the people and the President. Even if some may support the president, many do not. Due to this, seeing Roosevelt speaking on the radio, describing what he had done step by step and explaining the Emergency Bank Act surprised me because it showed the nation as one instead of as separate. Additionally, Roosevelt’s boldness in his policies allowed for such a rapid change. This also added to my knowledge about American history as Roosevelt’s decision to take the US Dollar off the gold standard was one that seemed unfathomable at the time. However, through his decision and other global issues with the gold standard, many countries began to get rid of this, changing the way currency was backed for a long time.

Overall Roosevelt helped take the United States out of the great depression through his bold policies and due to the support he received from the citizens of the United States. He helped boost the economy and backed out of the gold standard which subsequently caused many other countries to follow.


One thought on “Blog Post #4- Rauchway’s Reflation and Relief”

  1. Several very interesting lines of thought here. I’m not sure, but I think Berlin’s comment was meant as a criticism more than a compliment, since in hindsight it might have been easy to blame FDR/the US for not doing more to stave off the rise of fascism in Europe and Japanese imperialism in Asia… in a different sense, I’m not sure his comment is all that accurate, since the New Deal, like the Progressive Era, was in fact informed by European ideas of social democracy, Keynesianism, etc… Moreover, it could be said that the American economy was much more geared towards domestic production and consumption than it would be in the globalized postwar years.

    It also may be possible to overestimate the degree of consensus behind FDR’s presidency. True, he won re-election overwhelmingly in 1936 (and slightly less so in 1940 and 1944) and anecdotally, he seems to have been very popular as well; but throughout his presidency and ever since he was dogged by conservative critics who accused him of asserting unprecedented and demagogic powers, and he also had to contend with opposition from Congress (notably, from conservative southern Democrats) and the Supreme Court.

    Lastly, the overall effectiveness of the New Deal remains subject to interpretation—unemployment dropped during FDR’s first term, but then grew precipitously during the recession of 1937–38… some historians have argued that it was only the advent of WWII that finally pulled the U.S. out of the Depression.

    A fine post, nonetheless!

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