The New Deal was Franklin Roosevelt's remedy for the Great Depression, launched in 1933 with a Second New Deal following in 1935. The government insured bank deposits, provided relief to the jobless, introduced social security for seniors, strengthened labour protections and put millions of Americans to work building roads, dams and bridges. In his second term Roosevelt added a minimum wage, a 44-hour work week and overtime pay.
The New Deal had plenty of doubters. In 1939 America's unemployment rate was still 17%. But for most it was a welcome riposte to the excesses of laissez-faire capitalism. It entrenched a new idea: that in hard times the state should intervene more directly in the economy. The economist who gave this intellectual shape was John Maynard Keynes, who argued that when private demand collapses, governments should spend more to sustain employment and growth.
Congress had passed the Smoot-Hawley tariff in 1930 to protect manufacturers, starting a damaging trade war. The Federal Reserve, worried about inflation, tightened the money supply as debts soured, deepening the downturn. President Herbert Hoover resisted offering federal relief to the needy. By 1933 one in four American adults was jobless, nearly half of America's banks had failed and GDP had shrunk by 30%.
Remember: Silly is a state of Mind, Stupid is a way of Life.