The Great Devaluation

13It's a Wonderful Life

The backdrop of the Great Depression led to the landslide victory of Democrat Franklin Delano Roosevelt over incumbent President Hoover in 1932. Roosevelt carried every state outside the northeast and won 57 percent of the popular vote, a record for the Democratic party at the time.

Roosevelt's campaign promised reforms of a New Deal for the American people, which were the opposite of Hoover's protectionist policies. When Roosevelt accepted the Democratic nomination, he stated, “Ours must be a party of liberal thought, of planned action, of enlightened international outlook, and of the greatest good to the greatest number of our citizens.” His New Deal offered financial reforms, public works, and regulations designed around what he called the three Rs—relief, recovery, and reform—as the solution to the Great Depression.

The ideas of the New Deal had been considered radical just four years prior. Then, Republican candidate Herbert Hoover had also won in his own landslide in 1928, on the exact opposite platform. Hoover had been elected on an agenda of protectionism and putting the American worker “first.” These promises by Hoover were followed through with the Smoot-Hawley tariffs in 1930, which placed a tax on over 125,000 imported goods. These protectionist policies, at first anyway, kept America prospering above other countries. We had boom years in 1928 and 1929 while the rest of the world was in recession. These same policies, however, later hastened ...