Hidden History: Roosevelt Opts for Austerity

The Great Depression – Part 7 Arsenal of Democracy

PBS (1993)

Film Review

For me the most significant segment of this final episode concerns the austerity cuts Roosevelt enacted in 1937, in response to business critics who attacked the burgeoning national debt.

As FDR laid off half the workers employed by the Works Progress Administration (WPA), the effects rippled throughout the economy. The stock market crashed in October 1937, even faster than in 1929. Businesses failed in record numbers and unemployment climbed to 20%. Once again, thousands of unemployed Americans were on the brink of starvation.

The 1937-38 depression is known as the “Roosevelt Depression.”

Part 7 also explores the mass migration of indigent Americans to California, under the misguided belief they would find plentiful food and jobs. Like 20 or so other states, California enacted laws to keep out the unemployed. With the help of local residents groups, police patrolled California’s borders for six weeks in 1938. They turned back all newcomers without $10 on their person.

Many of the state’s new migrants were housed in giant federal camps, as there was nowhere else for them to live.

After Eleanor Roosevelt testified to Congress about her fact finding tour to the camp, FDR introduced (and passed) a $5 billion spending bill.

In September 1939, Britain declared war on Germany following the invasion of Poland. By May 1940, Denmark, Norway, Holland and Belgium had fallen to the Nazis and Hitler was bombing the UK.

A year later, FDR initiated the first peace time draft in US history. Jobless men flocked to enlist because there were still no jobs. Forty percent failed their physicals due to lingering health effects of starvation.

A few weeks before the November 1940 presidential election (which he won), FDR authorized $7 billion in military aid to Britain, opening up thousands of jobs in the defense industry.

Yet it would take another three years – and US entry into the war – before the country returned to full employment.

2 thoughts on “Hidden History: Roosevelt Opts for Austerity

  1. Keynesian deficit budgeting defeated the sovereign money movement in the 30s, so of course socialist policies could never be successfully funded. It took the 2nd World War to get the “Free World” out of economic depression – and how did they fund that?

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.