The Economics of the Great Depression and the New Deal

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The Economics of the Great Depression and the New
Deal

• Dr. Gary Quinlivan
• Dean of the Alex G. McKenna School of Business,
  Economics, and Government
• Saint Vincent College
• GQ_at_stvincent.edu

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Stock Market Crash of 1929

• Jeremy J. Siegel, Stocks for the Long Run,
  McGraw-Hill, 1998
• Burton G. Malkiel, A Random Walk Down Wall
  Street, Norton, 1999.

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Bank Failures
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Hoover Response

• 1. 1930 Smoot-Hawley Tariff
• 2. 1930 1 tax cut for one year
• 3. 1930 400 million in public work expenditures
• 4. 1932 Huge increase in taxes
• 5. 1932 Reconstruction Finance Corporation

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Foreign Trade Policy
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Higher Taxes Hoover and FDR
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FDR Its the Private Sectors Fault
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FDRs New Deal 1933-35

• 1. Banking Act of 1933 FDIC
• 2. AU stock Nationalized
• 3. Federal Farm Mortgage Corporation Home Loan
  Corporation
• 4. First Agricultural Adjustment Act
• 5. TVA
• 6. Federal Emergency Relief Act (FERA 5-12-33)
• 7. Public Works Administration (Harold
  Ickes--Dept. of Interior)
• 8. Works Project Administration in 1935
• 9. Securities Act 6/33--created SEC in 6/34
• 10. 6/33 National Industry Recovery Act
• 11. Bank Act of 1935

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FDR 1935-36 Higher Taxes, Fed support of Unions
Expansion of the Welfare State

• 1. SS Act of 1935
• 2. Wagner Act of 1935
• 3. 8/35 Guffney-Snyder Act
• 4. 1936 Walsh-Healey Act
• 5. 1936 Tax on Retained Earning Higher MTR
• 6. Fair Labor Standards Act
• 7. 1938 2nd AAA
• 8. Federal bureau of Mines
• 9. Federal Control over Interstate Pipelines
  Trucking, and Air Travel

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Depression of 1937-38
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Fiscal Policy Government Expenditures
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Magnitude of Federal Government Expenditures
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Fiscal Policy Taxes
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Monetary Policy
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References

• Milton Friedman and Anna J. Schwartz, A Monetary
  History of the United States 1857-1960,
  Princeton University Press, 1963. Chapter 7 8.
• Michael R. Darby, Macroeconomics The Theory of
  Income, Employment, and the Price Level, McGraw
  Hill, New York, 1976, Chapter 10.
• Bennett T. McCallum, Monetary Economics Theory
  and Policy, Macmillan, 1989.
• R.A. Mundell, AA Reconsideration of the Twentieth
  Century,_at_ American Economic Review, July 2000,
  pp. 327B339.
• Gene Smiley, Rethinking the Great Depression,
  Ivan R. Dee, 2002.
• Gary M. Quinlivan and Brian Surkan, For Freedom
  and Prosperity Philip M. McKenna and the Gold
  Standard League, Center for Economic and Policy
  Education, 1999.