(L80) The New Deal & The Industrial Revolution

1.) Evaluate this claim: “The New Deal was a wise series of government actions that healed the problems afflicting the economy.”

The New Deal was a series of atrociously planned government actions that resulted in a famished, unemployed, and economically unsound people. The National Industrial Recovery Act for example allowed each industry to draft production codes for itself; this meant minimum wages, minimum prices, hours of production, specific production methods, etc. The claim backing this decision was that what businesses really needed was stability, rather than competition. The result of acting on this claim was basically stomping out smaller businesses on a major scale. Big businesses, having multiple locations and bountiful resources were in no competition with smaller businesses in the sense of service; however, the one area small businesses could compete in was prices. With new codes preventing small businesses from competing with prices, most perished by the hand government intervention. It was stated by UCLA professors Harold Cole and Lee Ohanian that “the abandonment of these policies coincided with the strong economic recovery of the 1940s”.
Another “wise” government action attached to The New Deal was the Agricultural Adjustment Act. This time, the government decided to stimulate the economy and raise food prices by destroying crops that had already been planted and grown. Acreage limitation was also implemented, and pigs were slaughtered needlessly to raise pork prices. This caused about 2 million tenant farmers and sharecroppers to become jobless, and to top it all off it was soon discovered after the fact that the United States was not producing enough food to sustain the population, even at a minimum subsidence level diet. What a way to heal the economy, way to go government intervention!

2.) How was the standard of living affected by the Industrial Revolution?

In short, the industrial revolution created numerous opportunities for workers that hadn’t previously existed. Before the industrial revolution, workers could have either made a profitable living through agriculture, or by gaining the tools necessary to enter into an independent trade. After the industrial revolution however, there was newly made space in the economy for a work force of people who were able to do neither of these things; factory work employed many people who would have otherwise suffered because they did not have the resources to meet the needs of the economy.

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(L45) The Welfare State

1.) What is the primary problem facing a policymaker who is trying to design a program to benefit people in unfortunate circumstances?

The biggest issue in creating a welfare-benefits program is the fact that it needs to be created in such a way that it is good enough to help people, but not so good that people never give up the help to support themselves (without welfare). This entails creating a target group; however people just outside of the guidelines of this target group are more likely to worsen their own situations, to place themselves within the guidelines in order to receive assistance. This means greater numbers of people are taking out, and less are paying in. Welfare benefits also create incentive for people within the guidelines (say, unemployed people) to stay within the guidelines, because rather than bettering their situations through work, they are handed a better situation. Even for those who originally have intentions of using welfare just to get them back on their feet again become comfortable in the situation they have been gifted. Overall, the rules of the program have encouraged those within the guidelines to stay there, and those outside of the guidelines, to get between them.

2.) In practice, what have been some of the outcomes — intended or unintended — of anti-poverty programs?

Throughout the growth of the welfare state, many disturbing side effects have been revealed. The largest of these realities being the fact that the welfare state does not actually decrease poverty! From 1967 to 1994, welfare spending quadrupled; poverty levels however, remained the same. It has also been discovered that poor people without government assistance are two and a half times more likely to escape poverty than those who are on welfare. It’s effects on family life have been absolutely devastating as well, and it has been linked to extremely high divorce rates. Children who come from families receiving government assistance typically have an IQ 20% lower than the average child coming from a non-welfare funded family. Welfare also has proven to impair young men’s earning abilities, cause behavioral and emotional issues in children three times greater than that of those without government assistance, and double the chances of a criminal future. Tax payer’s hard earned money is being drained into a system promoting broken families and lives of despair, all the while being framed as the greater good; is this something that you really want to be supporting?