In Roosevelt's "New Deal," he focused on the 3 Rs, reform, relief, and recovery. Though they were all important to get the country out of the Great Depression, reform was the most essential in order to make sure that such a crisis will never happen again. Roosevelt focused on how the Great Depression came about, and saw that the cause was the failings of banks and then markets.
Thus, he implemented a bank reform, the Glass-Steagall Act, creating the FDIC (Federal Deposit Insurance Corporation). He immediately closed all banks and worked the Federal Reserve to stability and trustworthiness. By strengthening the Federal Reserve, Roosevelt ensured that, if the banks failed again, the money would not be lost. This prevents panics and huge withdrawals of money, which was the catalyst to the Great Depression.
Roosevelt then turned to the stock markets, creating the US Securities and Exchange Commission to control the stock market and oversee any unfair and fraudulent business that may lead to another stock market crash. The Securities Act of 1933 allowed for the federal government to oversee the securities of firms. This prevented falsified data, which in turn prevented misleading reports.
Though all 3 R's, relief, recovery, and reform were essential to the normalization of the US's economy, reform was the most important part, as it handled future depressions, while recovery and relief were temporary and transitional parts. Reform was the permanent solution to the Great Depression.
Great post Brian. While reform may have been the way to permanently stop a Depression - were the policies of the New Deal truly permanent? Glass-Steagall for instance was repealed in the late 1900's and much of the New Deal didn't permanently solve the Depression as the war played a major part. Thus, would these efforts count as reform or relief?
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