The Great Depression

            My grandparents, who raised me, were born during the 1930s and had to contend with the effects of the Great Depression. They were born in 1936 and 1939 and had vastly different stories. My grandpa was born to two college educated parents, one of whom was a professor of chemistry at Oklahoma University. My grandmother was born to two parents who had a third and a sixth-grade education. They grew up in the same town but lived vastly different lives. My grandpa had his own bedroom, and my grandmother lived in her grandparent’s garage with her parents and her four siblings. Times were tough after the stock market crash of 1929, but many Americans made do with what they had. One of the many things that my grandma talks about with pride is that her parents never accepted money in terms of the welfare programs that were created by the New Deal. She is also proud of her father who found work with the WPA, the Works Progress Administration, which was founded in 1935 as one of the agencies of the New Deal.[1] The New Deal agencies would help pull the country out of the Great Depression, even if they were ultimately deemed unconstitutional.

The New Deal had several goals. To bring the economy out of the depression, to make wealth distribution more equal and to realign American politics, so that the Democratic party could remain in power.[2] The first goal certainly succeeded, as the country was already on a trajectory to pull out of the depression when Roosevelt was elected. The second goal of equalizing the wealth distribution was tricky. Largely, the stimulus and money being used to help the economy, was going to big businesses, so that they could hire workers. This did not always mean that the employees were benefitting though. The third goal worked in some ways, because Roosevelt was the first and only four-term president in American history. Overall, the New Deal programs seemed to work on the surface. Though, as previously noted, some of what the New Deal created was deemed unconstitutional after the fact.

The theory that is widely accepted as an explanation for the Great Depression is that the Governments of the world oversee fiscal policies. When it came to the Stock Market crash in 1929, most of the governments around the world were slow to do anything or did not try and do anything to mitigate the crash. Some believe that their lack of immediate response, led to the lasting economic struggles for many.

The Great Depression ended in 1933, according to most historical accounts. Christina Romer article suggests that there was still explosive growth of the United States economy in 1938 and 1942, with the GNP increasing from 8% to 10%.[3] There were many factors in the economic recovery of the United States. Part of what helped to propel the United States economy to recovery were the many alphabet agencies created by the New Deal, during the Roosevelt administration. Another factor, which helped increase the GNP, was World War II, as the United States had not entered the war yet, they were still happy to supply weapons, munitions, and goods to the allied troops. This certainly helped the economy to rebound.  

Despite the rebounding economy, there was still a recession in 1938. A chart showing GNP vs. consumption shows that the two did not reach equilibrium until at least 1940.[4] Interestingly, the system that was designed to give more power to the laborer’s, was also failing them, but the system did even itself out and allow America to climb out of the depression. For my grandparents, this meant very different things. My great grandfather continued to teach at the University through the depression and economic resurgence. For my grandma’s parents, they took any jobs they could. They took in laundry, did janitorial work, worked at the hospital and my great grandfather took a job as a short order cook in a local diner. The times were tough, but this did not stop either side of my family from working or entering the workforce. This was common practice, and it lent a hand to women entering the workforce in droves in the post-depression years. The end of the Great Depression, and the recovery of the American economy, was truly the work of a team. The government played their role and the role that was played by ordinary workers cannot be overstated. The hard work of the American people was ultimately what secured the end of the Great Depression.

As we get to the 2020s, many who lived through the Great Depression are not around anymore. I am fortunate to have my grandparents around to tell me their stories. It is like an oral history of our family, but there are many that do not have this. It is so important to record these things for posterity as we move forward into the next decade, one hundred years removed from the events of the Great Depression.

[1] John D. Chichester, Herman Kehrli, Dilworth Walker and Charles D. Rosa. "Scope and Use of Works Progress Administration Projects." The Bulletin of the National Tax Association 21, no. 9. (1936). 258-264.

[2] Bradford A. Lee, "The New Deal Reconsidered." The Wilson Quarterly 6, no. 2. (1982). 62-76.

[3] Christina D. Romer, "What Ended the Great Depression?" The Journal of Economic History 52, no. 4. (1992). 757-784.

[4] Harold L. Cole and Lee E. Ohanian, "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis." Journal of Political Economy 112, no. 4. (2004). 779-816.

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Bibliography

John D. Chichester, Herman Kehrli, Dilworth Walker and Charles D. Rosa. "Scope and Use of Works Progress Administration Projects." The Bulletin of the National Tax Association 21, no. 9. (1936). 258-264.

Lee, Bradford A. "The New Deal Reconsidered." The Wilson Quarterly 6, no. 2. (1982). 62-76.

Ohanian, Harold L. Cole and Lee E. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis." Journal of Political Economy 112, no. 4. (2004). 779-816.

Romer, Christina D. "What Ended the Great Depression?" The Journal of Economic History 52, no. 4. (1992). 757-784.