Archive for the ‘Roosevelt’ Category

The State Emblem of the Union of Soviet Social...

Image via Wikipedia

The Cold War was the most important political and diplomatic issue of the early postwar period. The main Cold War enemies were the United States and the Soviet Union. The Cold war got its name because both sides were afraid of fighting each other directly. In such a “hot war,” nuclear weapons might destroy everything. So, instead, they fought each other indirectly. They played havoc with conflicts in different parts of the world. They also used words as weapons. They threatened and denounced each other. Or they tried to make each other look foolish.

The term “Cold War” was first used in 1947 by Bernard Baruch, senior advisor to Harry Truman, the 33rd president of the United States, in reference to the frequently occurring and exacerbating crises between the United States and the former Soviet Union, despite having fought side-by-side against Nazi Germany in the Second World War.

Dating the end of the Cold War requires dating its begining, and defining what it was about. By one reaconing, the Cold War began in the 1945-1948 timeframe, and ended in 1989, having been a dispute over the division of Europe. By another account, the Cold War began in 1917 with the Bolshevik Revolution, and ended in 1991 with the collapse of the Soviet Union, having been a conflict between Bolshevism and Democracy.

The Cold War grew out of longstanding conflict between the Soviet Union and the United States that developed after the Russian Revolution of 1917. The Soviet Communist Party under V.I. Lenin considered itself the spearhead of an international movement that would replace the existing political orders in the West, and indeed throughout the world.

The Cold War can be said to have begun in 1917, with the emergence in Russia of a revolutionary Bolshevik regime devoted to spreading communism throughout the industrialized world. For Vladimir Lenin, the leader of that revolution, such gains were imperative. As he wrote in his August 1918 Open Letter to the American Workers, “We are now, as it were, in a besieged fortress, waiting for the other detachments of the world socialist revolution to come to our relief.”

Western governments generally understood communism to be an international movement whose adherents foreswore all national allegiance in favor of transnational communism, but in practice received their orders from and were loyal to Moscow. In 1918, the United States joined briefly and unenthusiastically in an unsuccessful Allied attempt to topple the revolutionary Soviet regime. Suspicion and hostility thus characterized relations between the Soviets and the West long before the Second World War made them reluctant allies in the struggle against Nazi Germany.

The United States and Great Britain fought against the Bolsheviks, unsuccessfully, between 1918 and 1920. In 1918 American troops participated in the Allied intervention in Russia on behalf of anti-Bolshevik forces. In the two decades thereafter, Soviet attitudes towards the West oscillated wildly. American diplomatic recognition of the Soviet Union did not come until 1933. Even then, suspicions persisted. During World War II, however, the two countries found themselves allied and downplayed their differences to counter the Nazi threat.

The Cold War was a decades-long struggle for global supremacy that pitted the capitalist United States against the communist Soviet Union. Although there are some disagreements as to when the Cold War began, it is generally conceded that mid- to late-1945 marks the time when relations between Moscow and Washington began deteriorating. This deterioration ignited the early Cold War and set the stage for a dynamic struggle that often assumed mythological overtones of good versus evil.

At the close of World War II, the Soviet Union stood firmly entrenched in Eastern Europe, intent upon installing governments there that would pay allegiance to the Kremlin. It also sought to expand its security zone even further into North Korea, Central Asia, and the Middle East. Similarly, the United States established a security zone of its own that comprised Western Europe, Latin America, Southeast Asia, Australia, New Zealand, and Japan. From the long view of history, it is clear that both sides were jockeying for a way to secure their futures from the threat of another world war, but it was the threat that each side perceived from the other that allowed for the development of mutual suspicion. It was this mutual suspicion, augmented by profound distrust and misunderstanding that would ultimately fuel the entire conflict.

Over the years, leaders on both sides changed. Yet the Cold War continued. It was the major force in world politics for most of the second half of the twentieth century. Historians disagree about how long the Cold War lasted. A few believe it ended when the United States and the Soviet Union improved relations during the nineteen-sixties and early nineteen-seventies. Others believe it ended when the Berlin Wall was torn down in 1989, or when the Soviet Union collapsed in late 1991.

For the first few years of the early Cold War (between 1945 and 1948), the conflict was more political than military. Both sides squabbled with each other at the UN, sought closer relations with nations that were not committed to either side, and articulated their differing visions of a postwar world. By 1950, however, certain factors had made the Cold War an increasingly militarized struggle. The communist takeover in China, the pronouncement of the Truman Doctrine, the advent of a Soviet nuclear weapon, tensions over occupied Germany, the outbreak of the Korean War, and the formulation of the Warsaw Pact and the North Atlantic Treaty Organization as rival alliances had all enhanced the Cold War’s military dimension. U.S. foreign policy reflected this transition when it adopted a position that sought to “contain” the Soviet Union from further expansion. By and large, through a variety of incarnations, the containment policy would remain the central strategic vision of U.S. foreign policy from 1952 until the ultimate demise of the Soviet Union in 1991.

Successive American presidents and successive Soviet premiers tried to manage the Cold War in different ways, and the history of their interactions reveals the delicate balance-of-power that needed to be maintained between both superpowers. Dwight Eisenhower campaigned as a hard-line Cold Warrior and spoke of “rolling back” the Soviet empire, but when given a chance to dislodge Hungary from the Soviet sphere-of-influence in 1956, he declined. The death of Stalin in 1953 prefaced a brief thaw in East-West relations, but Nikita Kruschev also found it more politically expedient to take a hard line with the United States than to speak of cooperation.

The United States and the Soviet Union were the only two superpowers following the Second World War. The fact that, by the 1950s, each possessed nuclear weapons and the means of delivering such weapons on their enemies, added a dangerous aspect to the Cold War. The Cold War world was separated into three groups. The United States led the West. This group included countries with democratic political systems. The Soviet Union led the East. This group included countries with communist political systems. The non-aligned group included countries that did not want to be tied to either the West or the East.

By 1960, both sides had invested huge amounts of money in nuclear weapons, both as an attempt to maintain parity with each other’s stockpiles, but also because the idea of deterring conflict through “mutually assured destruction” had come to be regarded as vital to the national interest of both. As nuclear weapons became more prolific, both nations sought to position missile systems in ever closer proximity to each other’s borders. One such attempt by the Soviet government in 1962 precipitated the Cuban Missile Crisis, arguably the closest that the world has ever come to a large-scale nuclear exchange between two countries.

It was also in the early 1960s that American containment policy shifted from heavy reliance on nuclear weapons to more conventional notions of warfare in pursuit of a more “flexible response” to the spread of communism. Although originally articulated by President Kennedy, it was in 1965 that President Johnson showcased the idea of flexible response when he made the initial decision to commit American combat troops to South Vietnam. American thinking had come to regard Southeast Asia as vital to its national security, and President Johnson made clear his intention to insure South Vietnam’s territorial and political integrity “whatever the cost or whatever the challenge.”

The United States ultimately fought a bloody and costly war in Vietnam that poisoned U.S. politics and wreaked havoc with its economy. The Nixon administration inherited the conflict in 1969, and although it tried to improve relations with the Soviets through detente – and even took the unprecedented step of establishing diplomatic relations with Communist China – neither development was able to bring about decisive change on the Vietnamese battlefield. The United States abandoned the fight in 1973 under the guise of a peace agreement that left South Vietnam emasculated and vulnerable.

Although Nixon continued to negotiate with the Soviets and to court Maoist China, the Soviet Union and the United States continued to subvert one another’s interests around the globe in spite of detente’s high-minded rhetoric. Leonid Brezhnev had been installed as Soviet premier in 1964 as Kruschev’s replacement, and while he too desired friendlier relations with the United States on certain issues (particularly agriculture), genuinely meaningful cooperation remained elusive.

By the end of the 1970s, however, the chance for an extended thaw had utterly vanished. Jimmy Carter had been elected president in 1976, and although he was able to hammer out a second arms limitation agreement with Brezhnev, the 1979 Soviet invasion of Afghanistan significantly soured U.S.-Soviet relations. Seeking to place a greater emphasis on human rights in his foreign policy, Carter angrily denounced the incursion and began to adopt an increasingly hard line with the Soviets. The following year, Americans overwhelmingly elected a president who spoke of waging the Cold War with even greater intensity than had any of his predecessors, and Ronald Reagan made good on his promises by dramatically increasing military budgets in the early 1980s.

Nonetheless, by 1985 Mikhail Gorbachev had replaced Brezhnev in Moscow, and he quickly perceived that drastic changes to the Soviet system were necessary if the USSR. was to survive as a state. He instituted a series of liberal reforms known as perestroika, and he seemed genuinely interested in more relations with the West, known as glasnost. Although President Reagan continued to use bellicose language with respect to the Soviet Union (as when he labeled it an “evil empire”), the Gorbachev-Reagan relationship was personally warm and the two leaders were able to decrease tensions substantially by the time Reagan left the White House in 1989.

Despite improved East-West relations, however, Gorbachev’s reforms were unable to prevent the collapse of a system that had grown rigid and unworkable. By most measures, the Soviet economy had failed to grow at all since the late 1970s and much of the country’s populace had grown weary of the aged Communist hierarchy. In 1989 the spontaneous destruction of the Berlin Wall signaled the end of Soviet domination in Eastern Europe, and two years later the Soviet government itself fell from power.

The DoD Cold War Recognition Certificate was approved for service during the “Cold War era” from 02 September 1945 to 26 December 1991. By this account, after 45 years of protracted conflict and constant tension, the Cold War ended with the collapse of the Soviet Union. This is, upon reflection, a rather tendentious reading of history, since it takes the central conflict of the Cold War to have been the struggle between the two competing social systems, which could only end with one or the other being consigned to the ash heap of history.

President Bush presented the Medal of Freedom award to former President Ronald Reagan at a ceremony in the East Room on January 13, 1993. President Bush said that Reagan” … helped make ours not only a safer but far better world in which to live. And you yourself said it best. In fact, you saw it coming. We recall your stirring words to the British Parliament. Here were the words: “the march of freedom and democracy . . . will leave Marxist-Leninism on the ashheap of history.” Few people believe more in liberty’s inevitable triumph than Ronald Reagan. None, none was more a prophet in his time. Ronald Reagan rebuilt our military; not only that, he restored its morale.”

During the Cold War 325 Americans died as a result of hostile action; More than 200 airmen were killed by Communist air defenses, and more than 40 American intelligence aircraft were shot down, killing 64 Cryptologists and 40 crew members. Countless other Americans had their lives disrupted through military service in support of the Cold War.

 
Franklin D. Roosevelt was elected to four term...
Image via Wikipedia

By late winter 1933, the nation had already endured more than three years of economic depression. Statistics revealing the depth of the Great Depression were staggering. More than 11,000 of 24,000 banks had failed, destroying the savings of depositors. Millions of people were out of work and seeking jobs; additional millions were working at jobs that barely provided subsistence. Currency values dropped as the deflationary spiral continued to tighten and farm markets continued to erode.

During the previous summer the Democratic Party had unveiled a generalized plan for economic recovery in its platform. They called their platform a “contract” and set forth in it a series of provisions to remedy the economic disaster. Although frequently lacking specifics, the platform addressed a wide range of issues: among them were agricultural relief, Prohibition, unemployment, and old age insurance. While not followed very closely by Franklin Roosevelt’s administration, the platform did indicate that election of the Democratic candidate would result in unprecedented governmental growth to deal with the problems pressing on the nation. Roosevelt set about to prepare the nation to accept expansion of federal power. Roosevelt recognized that the programs he was about to introduce for congressional legislative action to relieve the dire effects of the Great Depression were unprecedented in peacetime.

In his 1933 inaugural address Roosevelt stated: “Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangement without loss of essential form. That is why our constitutional system has proved itself the most superbly enduring political mechanism the modern world has produced. It has met every stress of vast expansion of territory, of foreign wars, of bitter internal strife, of world relations.” Yet, at the same time, he was prepared to recommend measures that he knew could succeed only with strong public pressure in support of extraordinary federal powers to deal with “extraordinary needs.”

The first document featured with this article is the speech given on Inauguration Day in March 1933. It is particularly memorable for its attack on the psychology of the Great Depression. Less memorable but more enduring is the justification that Roosevelt planned to use to expand the power of the federal government to achieve his legislative objectives and thereby ease the effects of the Great Depression. Woven throughout his inaugural address was his plan. He aimed to declare war on the Great Depression and needed all the executive latitude possible in order to wage that war. For in addition to his famous statement “the only thing we have to fear is fear itself,” he also said “I shall ask the Congress for the one remaining instrument to meet the crisis — broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.”

Resources

Graham, Otis L., Jr. An Encore for Reform: The Old Progressives and the New Deal. New York: Oxford University Press, 1967.

Leuchtenburg, William. Franklin D. Roosevelt and the New Deal, 1932-1940. New York: Harper and Row, 1963.

Though the U.S. economy had gone into depression six months earlier, the Great Depression may be said to have begun with a catastrophic collapse of stock-market prices on the New York Stock Exchange in October 1929. During the next three years stock prices in the United States continued to fall, until by late 1932 they had dropped to only about 20 percent of their value in 1929. Besides ruining many thousands of individual investors, this precipitous decline in the value of assets greatly strained banks and other financial institutions, particularly those holding stocks in their portfolios. Many banks were consequently forced into insolvency; by 1933, 11,000 of the United States’ 25,000 banks had failed. The failure of so many banks, combined with a general and nationwide loss of confidence in the economy, led to much-reduced levels of spending and demand and hence of production, thus aggravating the downward spiral. The result was drastically falling output and drastically rising unemployment; by 1932, U.S. manufacturing output had fallen to 54 percent of its 1929 level, and unemployment had risen to between 12 and 15 million workers, or 25-30 percent of the work force.

The Great Depression began in the United States but quickly turned into a worldwide economic slump owing to the special and intimate relationships that had been forged between the United States and European economies after World War I. The United States had emerged from the war as the major creditor and financier of postwar Europe, whose national economies had been greatly weakened by the war itself, by war debts, and, in the case of Germany and other defeated nations, by the need to pay war reparations. So once the American economy slumped and the flow of American investment credits to Europe dried up, prosperity tended to collapse there as well. The Depression hit hardest those nations that were most deeply indebted to the United States, i.e., Germany and Great Britain. In Germany, unemployment rose sharply beginning in late 1929, and by early 1932 it had reached 6 million workers, or 25 percent of the work force. Britain was less severely affected, but its industrial and export sectors remained seriously depressed until World War II. Many other countries had been affected by the slump by 1931.

Almost all nations sought to protect their domestic production by imposing tariffs, raising existing ones, and setting quotas on foreign imports. The effect of these restrictive measures was to greatly reduce the volume of international trade: by 1932 the total value of world trade had fallen by more than half as country after country took measures against the importation of foreign goods.

The Great Depression had important consequences in the political sphere. In the United States, economic distress led to the election of the Democrat Franklin D. Roosevelt to the presidency in late 1932. Roosevelt introduced a number of major changes in the structure of the American economy, using increased government regulation and massive public-works projects to promote a recovery. But despite this active intervention, mass unemployment and economic stagnation continued, though on a somewhat reduced scale, with about 15 percent of the work force still unemployed in 1939 at the outbreak of World War II. After that, unemployment dropped rapidly as American factories were flooded with orders from overseas for armaments and munitions. The depression ended completely soon after the United States’ entry into World War II in 1941. In Europe, the Great Depression strengthened extremist forces and lowered the prestige of liberal democracy. In Germany, economic distress directly contributed to Adolf Hitler’s rise to power in 1933. The Nazis’ public-works projects and their rapid expansion of munitions production ended the Depression there by 1936.

At least in part, the Great Depression was caused by underlying weaknesses and imbalances within the U.S. economy that had been obscured by the boom psychology and speculative euphoria of the 1920s. The Depression exposed those weaknesses, as it did the inability of the nation’s political and financial institutions to cope with the vicious downward economic cycle that had set in by 1930. Prior to the Great Depression, governments traditionally took little or no action in times of business downturn, relying instead on impersonal market forces to achieve the necessary economic correction. But market forces alone proved unable to achieve the desired recovery in the early years of the Great Depression, and this painful discovery eventually inspired some fundamental changes in the United States’ economic structure. After the Great Depression, government action, whether in the form of taxation, industrial regulation, public works, social insurance, social-welfare services, or deficit spending, came to assume a principal role in ensuring economic stability in most industrial nations with market economies.

Big Brother had come to stay.

Really helpful post from scoop2go
1. False Prosperity
* overdependence on mass production, consumer spending, advertising, welfare capitalism, high tariff, “invisible hand”
* automobile was the leading industry
* chemicals, appliances, radio, aviation, chain stores
* overproduction in textiles, farming, autos
* real wages increased only 11%
* 60% population less than $2000 poverty minimum
* top 5% earned 33% income – spending by the rich essential
* Andrew Mellon cut taxes

2. Speculation
* Fed loaned at 3.5%, gold inflow 1927, Great Bull Market 1928
* broker loans on call rose from $3.5b in 1927 to $8.5b in 1929
* Goldman Sachs investment trusts, 50% margin trading at 5% interest
* only 1.5m of 120m population were investors
* pooling tactic of “anglers” – John J. Raskob
* Charles Mitchell of National City Bank: “I know of nothing fundamentally wrong with the stock market.” (Oct. 21, 1929)
* Joe Kennedy: “Only a fool holds out for the top dollar” (sold after RKO merger in October 192

These two Main Causes led to further crises:

3. Stock Market Crash
* Sep. 3 Dow high of 381
* Sep. 6 Babson break – market became erratic
* Sep. 20 – collapse of Hatry in Britain
* Oct. 23 – J.P. Morgan buys to stop price decline
* Oct. 24 – panic selling began – 12.8m shares
* Oct. 29 – “Black Tuesday” – 16.4m shares
* prices decline to Dow low 41.22 on July 8, 1932

4. Banking Crisis
* deposits withdrawn, deflation
* 9000 banks fail in 1930, 1932 waves
* Austria’s bank failed May 1931

5. Unemployment
* ripple effect as leading factories close
* rose to 25-35% of total labor force, 80% in Toledo
* farm income declined 60%; 1/3 lost land

6. Trade Collapse
* foreign countries retaliate with high tariffs
* Weimar Republic unable to pay reparations or U.S. banks loans
* U.S. had been creditor with $638m annual surplus

7. Political Policy
* “The Ordeal of Herbert Hoover”
* laissez faire, balanced budget, trickle down, voluntarism
* no use of monetary or fiscal policies
* Agricultural Marketing Act, Hawley-Smoot tariff, RFC of Jesse Jones
* Three Little Pigs- Disney later said in an interview that the cartoon was popular in the Depression due to its simple moral message that “wisdom and courage is enough to defeat big, bad wolves of every description, and send them slinking away” (Watts 1995, p. 100).

The Wall Street Crash made a significant contribution to the onset of the Great Depression. It was a catastrophic downturn in share values caused by over-speculation. There had been repeated warnings during the “Roaring Twenties”, a time of prosperity, that the high values could not be sustained, but speculation continued nonetheless. Over a period of a few weeks in October 1929, the shares dropped in value disastrously with a number of knock-on effects.
The decline in stock prices caused bankruptcies, severe macro-economic difficulties including business closures, firing of workers and other economic repression measures. The resultant rise of mass unemployment and the Great Depression itself is seen as a direct result of the crash.
However, historians and economists still differ over whether the collapse of share prices caused the Great Depression or simply reflected the underlying weakness of the domestic economy. Some academic experts wonder whether the Wall Street Crash was anything more than a typical market correction signaling the beginning of a typical recession. In their view, the day has erroneously been linked to disconnected events that came along nearly two years later.
”The Depression did not begin the day of the crash of 1929,” said Ben S. Bernanke, a professor of economics and public affairs at the Woodrow Wilson School at Princeton University. ”It took a series of unrelated international financial events in late 1930 and early ’31 to turn what had been a normal recession into a panic.”
Though stock market investors refused to acknowledge any possibility other than limitless increases in share prices, warning clouds had risen over the horizon months before the crash. Bond prices began to retreat in the spring, and in May Congress adopted the Smoot-Hawley tariff law, establishing a wall of protectionism around the nation, taxing foreign imports.
That exacerbated the problem by preventing Europeans from selling enough goods in the United States to earn enough dollars to pay off their debts from World War I, but those effects did not show up immediately.
”The real disaster started in December 1930, with the failure of a private bank with an unfortunate name, the Bank of the United States,” Professor Bernanke said. Though the institution had no relationship to the Federal Government, the story of its collapse helped set off a panic among small depositors.
Bernanke describes 1931 as a year of small crises that built into a catastrophe. In April, the largest bank in Austria failed, helping to create a financial panic in Europe. In September, Britain abandoned the gold standard. Runs on banks restricted the money supply, setting off a round of severe deflation.
”The bottom fell out in June of 1931, nearly two years after the stock market crash,” he said. During the next two years, a worldwide financial panic touched off political and social upheaval from Central Europe to North America to the Far East.

On the 24th October 1929 and then again on the 29th October 1929, share prices on the New York Stock Exchange collapsed. To many people this came as a shock and very few people expected it. For seven years share prices had risen steadily and more people had invested money as a result. Many people had come to see the Stock Market as a safe and easy way of making money. However, in October1929, their hopes and dreams were dashed. The Wall Street Crash culminated in a downward spiral towards the Great Depression. (more…)

2_great_depression
In this paper we will be examining various interconnected reasons for the Great Depression. (more…)

us-politics
Example of a Pro-Roosevelt (interventionist) New Deal Essay (more…)

A compilation of useful articles on your coursework. Tyler Cowen is a professor of economics at George Mason University plus two book reviews (from 1964 and 1992. Can you spot which is which?) (more…)