A New Approach

From the 1920s Boom to the New Deal

After Republicans won control of the White House and Congress in 1920, they reduced business regulation and favored tax cuts for the wealthy. The decade brought rapid industrial growth, new consumer goods, rising stock prices, and optimism that prosperity would eventually benefit everyone.

That optimism fueled speculation. Many investors bought stocks with borrowed money, while warnings that prices were dangerously inflated were brushed aside. The market’s sharp decline, beginning in October 1929 and culminating in the crash on October 29, wiped out savings and helped trigger a deep economic collapse. Industrial output, trade, and crop prices plunged, and unemployment reached 13 million by 1933.

The 1920s boom had not benefited Americans equally. Farmers were already struggling, and workers’ wages did not keep pace with production. President Hoover rejected large federal public-works programs and favored tax cuts, reassurance, and private charity, while some Republican leaders blamed the poor for the crisis.

In 1932, voters chose Franklin D. Roosevelt, who promised a “New Deal” in which the federal government would provide jobs and a safety net. New Deal programs employed millions, built public infrastructure, regulated banking and markets, strengthened workers’ rights, and established protections such as minimum wages and food and drug regulation. These reforms created a new role for government, helping Americans weather hardship and later support the defense of democracy during World War II.

Presenter and Contributors

• Writer and narrator: Heather Cox Richardson
• Producer: Soundscape Productions
• Music composer: Michael Moss