Question

Read the following paper and answer on students’ questions and comments:

It is easy to look a gift horse in the mouth if the gift has already been obtained. The New Deal is responsible for guarantees on our bank deposits, the Social Security system’s retirement stability, protecting workers from exploitation, and a myriad of other gifts – already received and deposited (Volanto, 2010). The most interesting thing about the stated position of the opposite party asserting that the New Deal served to prolong the Great Depression is that the things that are occurring in modern day politics and economics are not even slightly discussed or asserted. During the New Deal asserted by President Roosevelt, the recovery package allowed workers to demand salaries that were 25 percent above market value (Foner, 2014). In today’s struggling economy, minimum wage is a matter of great debate. Many cities have even publically discussed the issue of higher wages and leading CEO’s have lowered their own wages well below market value in order to prove the point of financial equality whether or not it fits in with the market value analysis. Seattle, Washington recently raised their minimum wage to 15 dollars an hour. For a fast food employee, this is well above market value and yet it is supported by the masses in order to better the American economy. Market value is not king in the way that the strength of the American economy at large is. In a similar fashion to the expansion of government reach that is supported by popular vote today, the New Deal served to expand government activities and regulatory authority (Roberts & Stratton, 2001). The reasoning for the government expansion during the New Deal was to allow the government to expand their reach in order to assist in the national emergency that was the Great Depression. The point of this debate is certainly not to dissect every ‘argument’ in the opponents stated position of the New Deal prolonging the Great Depression and therefore being a sore mistake.

The purpose of this debate is to educate each other on how history is repeating itself. This is not a seventy five year old issue. This issue is happening today and if effects every single one of us. If the opponents truly believe that the New Deal was a very paramount mistake to assist in economy recovery, this plea is directly to them. The plea is not in the fashion of a simple academic rebuttal but as a citizen informing a citizen that history is repeating itself. The New Deal pulled along American Society until the World War infused industry again. The similar version of the New Deal is occurring today in political reforms that act to pull the United States along until it can regain its balance.

Another pillar of support for this rebuttal lies in the fact that the New Dealers relied on the current government rather than the Constitution (Roberts & Stratton, 2001). The challenge of historical definitions of the founders and even challenges to the constitution and the amendments themselves further solidify the parallel of the New Deal and today’s political processes.

References

Foner, E. (2014). The New Deal. In Give Me Liberty! An American History (Vol. 2, pp. 807-848). New York, NY: W. W. Norton & Company. http://newsroom.ucla.edu/releases/FDR-s-Policies-Prolonged-Depression-5409

Roberts, P. C., & Stratton, L. M. (2001). The Fed's Depression and the Birth of the New Deal. Policy Review, (108), 19.)

Volano, K. (2010). Where are the New Deal Historians of Texas?: A Literature Review of the New Deal Experience in Texas. East Texas Historical Journal, 48(2), 41-57.
Questions and Comments

Student 1: Whole idea of having higher wages for lower class and lower wages for the higher-class lowing wages for the higher class is so that there is no change in unemployment and reviving the economy. Is not a capital idea it is a communist idea, which would be going against our nature, and would end up having to go from a depression into total chaos. I am not against raising the minimum wage that being said. It has been shown that dramatically increasing the minimum wage does cause an increase in unemployment as well. When unemployment is incusing the economy slows down putting us in a depression which prolong a depressing.
https://mises.org/library/yes-minimum-wages-still-increase-unemployment

Student 2: You raise some good examples of how the current effects of a version of Roosevelt's New Deal are benefitting America. However I'd be more interested in seeing the numbers from the actual time period of the Great Depression. Can you provide some concrete numbers or figures showing how the New Deal did not prolong the Great Depression? In his rebuttal, Mr.Norrish points out that by raising wages, many employers would stop hiring as well as lay-off workers. Can you give some examples of ways the New Deal back then helped to end or at least curb the Great Depression?

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Student #1, Response
I absolutely agree with you that the dramatically increasing of the minimum wage does cause an increase of unemployment as well, because it often provokes the business closures. But at the same time the increasing of the minimum wage not necessary should be drastic and abrupt; on the contrary such an increasing should correspond to the real economic situation in the country and should be realized gradually and in concord with the representatives of the business’s society....

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