M4 Unit 12

Yohandra Fuentes

The AAA and NIRA Programs

The Great Depression is a worldwide economic downturn that happen between 1929 to 1939. The economic downturn originated from the United States of America, but it affected the world. The impact was severe in the United States and Europe and it was mild in Japan and Latin America. People did not have employment and the standards of living had dropped precipitously. The government had to find a solution to bounce back to good economic standards thus the introduction of the New Deal. The New Deal was fairly effective and made people gain trust in the government. Further , the government enacted laws that facilitated more involvement in the lives of the citizens.

The Agricultural Adjustment Act was part of the New Deal program that was initiated to bounce back the economy of the people of the United States. The Agricultural Adjustment Act was purposefully enacted to restore Agricultural prosperity. The Great Depression had slowed down the economy of the people considering it came after the first world war. After the first world war the European people had ventured into producing their own crops and thus the framers in the United States had most of their stock from the farm with them. The government led by President Roosevelt founded the AAA program so that the farmers in America would generate income. The framers were going at a loss, selling their produce at very low prices which did not generate enough income for them.

The Agricultural Adjustment Act was designed in a manner that farmers were requested to limit the number of crops in their production and in return the government would pay them subsidies. The target crops were cotton, corn, tobacco, rice, milk, wheat, and peanuts. The subsidies were paid for by a tax on the companies that processed crops. The subsidies were meant to limit overproduction of the crops. The AAA program was successful in increasing crop prices and income for the farmers. However, it is noteworthy comprehending that before the Agricultural Adjustment Act was functional the supreme court had ruled against it in 1933. The supreme court stated that the Act was unconstitutional on grounds of soil conservation. The Act had to undergo some amendments before it became law.

The National Industrial Recovery Act (NIRA) was enacted by congress in 1933 and was part of the New Deal programs to help in reviving the economy. NIRA sanctioned and enforced alliances of industries. The Act was primarily for industrial revival in the United States. The Act codified rules on fair competition and regulated the companies that would form alliances with companies within the United States. The Act had provisions that protected consumers, competitors, and employers. Further, employees were also accorded the right to be heard and the freedom to join labor organizations. The NIRA program was successful in raising real wages but lowered employment opportunities. The NIRA and AAA programs were part of the new deal during the Great Depression and both did not achieve much success as it was anticipated.

The New deal had several other programs in place that were enforced to achieve various goals. The main goal was to revive the economy of the United States however the programs did not turn out to be successful as expected. The reasons thereto being that the mechanisms that were used to revive the economy were contradictory to the norm of the economy of the United States of America. The AAA and NIRA program were beneficial and their impact was visible only that to some scholars and economic analysts, the programs did not bring forth the much anticipated saving situation. However, it is important to appreciate the New Deal programs because from the events that followed are a great reference for economic studies and progress in the United States and the rest of the world.

References

Bernanke, Ben S. "Essays on the great depression." In Essays on the Great Depression. Princeton University Press, 2009.https://doi.org/10.1515/9781400820276

Fethia, Braik. "New Deal for Minorities." Revue de Traduction et Langues Volume16 Numéro (2017): 67-76.

Robbins, Lionel, and Murray Weidenbaum. The great depression. Routledge, 2017. https://doi.org/10.4324/9781315132327

Romer, Christina D. "What ended the great depression?" The Journal of Economic History 52, no. 4 (1992): 757-784. https://doi.org/10.1017/S002205070001189X

Ohanian, Lee E. "What–or who–started the great depression?" Journal of Economic Theory 144, no. 6 (2009): 2310-2335.https://doi.org/10.1016/j.jet.2009.10.007