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PAUL JAY: Welcome to the Real News Network. I'm Paul Jay in Baltimore. During the 1930s in the deep depression, unemployment went from, in 1929, before the crash of around 4% to as high as 25%, but if you take into account the number of people that started working part-time for lower wages and the unemployed, I'm told that the actual loss of labor power in the economy was as high as 50%, people not working full-time.
In order to save the day for the crisis of global capitalism, and of course this great depression and deep crisis affected virtually every country in the world, except perhaps the Soviet Union, which had its own issues but was not as affected as the Western capitalist countries were. That being said, there were two basic responses: in Europe, the response eventually was fascism. The rebellion and the working class and the rise of the socialist movement was crushed through brute force of Hitler and Mussolini and fascists leadership, both in France and other places.
In the United States, where there were forces advocating the same kind of fascism. In fact, Henry Ford was a big supporter of Adolf Hitler. In the end, the response was something different. The response was Roosevelt and the New Deal. The New Deal made a great compromise with labor. It created a social safety net that more or less didn 't exist prior to the New Deal. Unemployment insurance, Social Security, banking regulation, support for agricultural workers, for farmers, subsidies and such, it was a whole range of measures that both benefited the people and to some extent helped take away the most severe consequences of the depression, at least for some, certainly many people suffered terribly.
That being said, the New Deal also saved capitalism, which had given rise to the great crisis in the first place. The New Deal was a compromise, that 's the bottom line, and since the new deal was established in the 30s, it has been attempted to be undone by both some Democratic presidents and Republican. We're telling this story in a series of interviews with historian, Peter Kuznick who now joins us from Washington. Thanks for joining us again, Peter.
PETER KUZNICK: That was a very good summary of the New Deal there.
PAUL JAY: Thank you. Peter is a professor of history and director of the nuclear studies at Institute at American University. He's the co-writer with Oliver Stone of the Untold History of The United States.
So, please go back and watch the earlier parts of this series because we are working through things kind of chronologically. Although, we are going to step back just a little bit because we had made our way up to Truman and the purging of the Democratic Party, of the New Dealers at the leadership of the Democratic Party and the administration under Truman, President Truman. But we haven't really talked about just what the new deal is that was being undone. So Peter, give us just the basic strokes, what the problem was and what the new deal was and tried to address.
PETER KUZNICK: The problem, as you stated very, very cogently, was that the capitalist economy collapsed by 1933 when Roosevelt took office. You have to remember that Roosevelt doesn't take office until March and later have a constitutional amendment, and the then presidents take office on January 20th but at this point, Roosevelt takes office in March. So, between his election in November and is taking off as the economy continued to plummet, Hoover, Herbert Hoover, his predecessor accused Roosevelt of deliberately letting the economy collapse.
Some of the clear indications of that were the increased collapse of the banking system. By the time Roosevelt took office, the entire banking system had collapsed. We had bank... We had ... bank in state after state, so first you've got a collapse of the banking system, on top of which we've got a collapse in agricultural production. Farm prices plummeted about 60%, or farm income had plummeted about 60%. Industrial production was down 50%. Unemployment, as you said, officially was 25%, but the actual unemployment and underemployment was much, much higher than that. So, you've got a collapse of industry, you've got a collapse of agriculture, you've got a collapse of banking and you have a collapse of morale.
Roosevelt's election in 1932 represented a sense of hope again. Hoover was thoroughly discredited. Hoover was willing to invest directly to save people 's cattle but he wouldn't invest directly to save the farmers themselves. That was typical of Hoover's approach. So, even though Hoover is more accurately treated as the first of the new kind of presidents, the interventionist presidents because Hoover actually intervened far more than any of the previous presidents would have into the economy, Hoover was not willing to go beyond voluntarism for the kind of programs that Roosevelt did implement.
Roosevelt ran on a fairly conservative platform but once he got into office, he realized that more dramatic steps were needed. Even still, he was not a radical by any means, especially in the beginning. He was in an excellent position to nationalize the entire banking system. He could've done that with little protest. The bankers were considered to be the enemy of the people in 1933. They were thought to be-
PAUL JAY: Thousands of banks had closed their doors.
PETER KUZNICK: Thousands of banks collapsed across the country, rural banking system almost entirely. Entire states had shut down their banking, and so Roosevelt could've come in there and done something very, very dramatic as many people urged him to do but Roosevelt took a much more tempered kind of approach, a moderate approach. He made his famous fireside chat, called for a moratorium, closed the banks temporarily, reopened the banks and without any major fundamental structural changes in the banking system, restored confidence in the banking system and the banks were able to continue functioning with more regulation, but generally along the lines they had functioned before. He did not privatize the banking system. In other areas-
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