Progressivism: Conclusion

Transcription

1 Progressivism: Conclusion

2 Response to early 20 th century problems from many angles Populism Socialism Progressivism Muckrakers Upton Sinclair (The Jungle) Jacob Riis (How the Other Half Lives) Lincoln Steffens (The Shame of the Cities) Ida M. Tarbell (The History of the Standard Oil Company)

3 Muckrakers crusading journalists exposed scandal, corruption, and injustice wrote in cheap and popular magazines light destroys corruption Ida Tarbell & John Rockefeller tradition continues today

4 Triangle Shirtwaist

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7 Ida Tarbell on John D. Rockefeller Mr. Rockefeller was "good." There was no more faithful Baptist in Cleveland than he. Every enterprise of that church he had supported liberally from his youth. He gave to its poor. He visited its sick. He wept for its suffering... Yet he was willing to strain every nerve to obtain for himself special and illegal privileges from the railroads which were bound to ruin every man in the oil business not sharing them with him.

8 It may be that Mr. Rockefeller is one of those double natures that puzzle the psychologist. A man whose soul is built like a ship in air-tight compartments to use the familiar figure -- one devoted to business, one to religion and charity, one to simple living and one to nobody knows what. But between these compartments there are no doors.

9 Progressive Reform Dehumanization labor unions/regulation of working conditions Imperfect Information FDA Monopolies Break them up: Sherman Anti-trust Act Regulate them: FTC

10 Continued Externalities Subsidize positive National parks environmental concerns Reduce negative Prohibition (18 th amendment) Public goods Public sanitation services Economic Injustice Minimum safety standards in housing 16 th Amendment graduated income tax Massive expansion of private charity

11 Underlying philosophy Human nature basically good Trust and empower the people Scientific knowledge will provide progress Trust and empower experts

12 Blows to Progressivism WWI Science produced machine gun/mustard gas, but not knowledge to avoid war People Proved human as in the human predicament Jazz Age: Roaring 20 s Post war prosperity Henry Ford Harding, Coolidge, Hoover a chicken in every pot and a car in every garage We in America today are nearer to the final triumph over poverty than every before in the history of any land. -- Herbert Hoover, 1928

13 Outline: The Great Depression Economic Fluctuations and Recession Crash, Recession, and Depression Government Attempts To End the Depression The Constitution and the Growth of Government The Legacy of the Great Depression

14 Macro-economic Instability Normally output and employment rise and fall cyclically.

15 Recession: The Breakdown Economies generally grow. At times, though, they shrink: recessions. Employment drops; output drops significantly below what economy could produce with full employment.

16 Recession vs. Depression A depression is a very severe recession. One definition of a depression: A drop of GDP of at least 10%.

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18 Great Depression begins as Economic Crisis Recession begins summer of 1929 Oct. 24, 1929: Stock market crashes By election of % unemployment in America 50% Cleveland, 60% in Akron, 80% in Toledo 185,000 bankruptcies (large and small) over 4000 banks went bankrupt one-third of American farmers lost farms

19 Why? Recession: The Breakdown Shock hits the economy: stock market drop, bank panic, crop failure, housing bubble burst. Wages, prices should adjust downward quickly to preserve full employment. But wages, prices do not move down quickly: contracts, inertia. Excess supply of goods and labor. Firms cut production and lay off workers: recession.

20 Crash, Recession, and Depression Series of unfortunate events. Boom economy in 20s. 1929: Problems begin to emerge. Drought. Decline in industrial production. Stock market crash: October 24,28, : Problem shifts from stock market to banks. Stock market losses raise concerns about banks. Runs. Bank failures. Devastating.

21 Recap: Causes of the Great Depression The stock market bubble bursts. Then trouble spreads to the banks. The Federal Reserve does nothing to stabilize banks or to keep money supply from shrinking.

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23 Crash, Recession, and Depression Series of unfortunate events : 1/3 decline in money supply. Consumers stop buying; businesses stop investing. The Federal Reserve did not maintain the money supply and did not rescue banks. Terrible mistakes: These two failures are the main reasons why the recession morphed into a Great Depression. Large tariff increases in 1930 (infamous Smoot- Hawley tariffs).

24 Crash, Recession, and Depression Hard times. The Great Depression shows how bad things can get in a market economy : 30% drop in GDP. Industrial production plummets. Farm prices plummet. One third of American farmers lose land. Over 9000 banks shut down. Terrible dust storms make things worse.

25 Great Depression Stats Year Real GDP $ billions Price level 1958=100 Suicide Rate Unemployment Foreclosures % , , , , ,400

26 Crash, Recession, and Depression Hard times. Many men on streets. Many hide in houses until they get foreclosed. Many men leave families. Blacks hit especially hard. Great Depression damaged an entire generation, some beyond repair.

27 Great Depression as Economic Crisis Recession begins summer of 1929 Oct. 24, 1929: Stock market crashes By election of % unemployment in America 50% Cleveland, 60% in Akron, 80% in Toledo 185,000 bankruptcies (large and small) over 4000 banks went bankrupt one-third of American farmers lost farms

28 Great Depression as Moral Crisis Individual demoralization Social deception Alcoholism Abandonment Suicide National demoralization

29 Great Depression as Political Crisis Violent conflict Loss of faith in the system Rise of demagogues: Manipulates emotions, fears, and prejudices to obtain vast power America: Huey Long confiscate incomes over $1 mil. $2000 guaranteed income/free college SOW clubs boast 7 million members Europe: Hitler, Mussolini, Stalin

30 FDR to the Rescue optimistic & energetic president as legislative leader unprecedented federal involvement

31 Election of 1932 The Great Depression 31

32 FDR s Approach Charismatic Leadership A New Deal Bold, persistent experimentation Anticipated and then influenced by Keynsian economics prime the pump Stimulate demand by increasing spending or cutting taxes

33 FDR (continued) Revolutionized government Four Freedoms Speech, Jan. 6, 1941 of Speech of Worship from Want from Fear

34 Year House of Representatives Senate Democrats Republicans Democrats Republicans

35 Government Efforts To End the Election of 1932 The New Deal Depression The National Recovery Administration Agricultural Adjustment Act Short-term relief: CCC, WPA, others Regulation: SEC, FDIC, NLRB, FCC, minimum wage, Social Security Keynesian economics.

36 Two New Deal Programs The Agricultural Adjustment Act (AAA) is designed to help farmers. It does not work very well. The Works Progress Administration (WPA) does provide jobs for many.

37 Long-term Structural Changes Caused by the New Deal Agricultural Price Supports Government regulation of business SEC to regulate the stock market FDIC to regulate bank deposits NLRB to regulate labor relations Social Security to provide retirement income for the elderly Acceptance of deficit spending

38 Government Efforts To End the Depression The Real Solution: Restore money supply. This plus passage of time, rather than just World War II, end the Great Depression.

39 The Constitution and the Growth of Government Proponents of government growth argued against the Constitution. In practice, the Constitution did not prevent government growth. Commerce clause interpreted broadly. Takings clause interpreted narrowly. Free speech, freedom of religion, and due process: not economic freedom.

40 The Legacy of the Great Depression Before the Great Depression, the government did not take responsibility for the economy. Default switched from no intervention to intervention. WWII solidified this mindset. Since then, almost any glitch has been subject to government action.

41 The Legacy of the Great Depression Most important legacy of Great Depression is philosophical: We expect the government to solve economic problems. The days of limited government are over.

42 A spiritual-political dilemma God would have us be both free and equal America s response

43 Why Focus on Income? lifespan education leisure income consumption Equal 1800 Unequal lifespan leisure education consumption income Equal 2010 Unequal

44 The Gospel and Economic Inequality The Savior, through scriptures and church leaders, has repeatedly told us to help the poor. And now, for the sake of retaining a remission of your sins from day to day, that ye may walk guiltless before God I would that ye should impart of your substance to the poor, every man according to that which he hath, such as feeding the hungry, clothing the naked, visiting the sick and administering to their relief, both spiritually and temporally, according to their wants. Mosiah 4:26. Helping the poor is part of the public virtue we need to sustain society.

45 The Gospel and Economic Inequality Does the admonition of Christ to help the poor extend to the way we use government? In other words, is using government to compel spending on aid to the poor a way to fulfill the command in Mosiah 4:26?