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Difficulty: MediumThe New Deal: Policies, Reforms, and Debates

"We have seen the New Deal, during these three years, seek to control and direct our economic life by federal bureaus. It has sought to substitute government planning for individual initiative and state control for local government... This is not a road to economic recovery, but a road to state socialism. It is a philosophy of government that undermines the liberty of the individual and increases the power of the federal executive to a degree unprecedented in our history. The true solution to our economic distress lies not in government regimentation and spending, but in restoring confidence to private enterprise, reducing the tax burden, and returning to the constitutional principles of balanced powers and local self-government."

— Herbert Hoover, address to the Republican National Convention, 1936

Which of the following New Deal policies or programs most directly exemplifies the "government planning" and regulation of economic life criticized in the excerpt?

  1. A
    The introduction of Medicare to provide federal health insurance for elderly citizens
  2. The establishment of the National Recovery Administration to regulate industrial wages, prices, and production codesAnswer
  3. C
    The complete elimination of national unemployment and economic stagnation by the Civilian Conservation Corps
  4. D
    The total withdrawal from international trade and diplomatic treaties to achieve economic self-sufficiency

Answer

The establishment of the National Recovery Administration to regulate industrial wages, prices, and production codes
The correct answer is the option stating the establishment of the National Recovery Administration. The National Recovery Administration (NRA) was created to promote industrial recovery by setting codes of fair competition, which controlled prices, wages, and working conditions. This direct federal regulation of private businesses represents the exact form of 'government planning' and central intervention criticized by Hoover as undermining private enterprise and individual liberty.

Step-by-Step Solution

1
Analyze the stimulus text to identify the author's primary criticism.
The author (Herbert Hoover) is criticizing the New Deal's expansion of executive power, government planning, and regulation of economic activities by federal bureaus.
Hoover argues that this government planning undermines private enterprise and local self-government.
2
Evaluate the options to identify which program represents direct federal planning and regulation of industrial or economic life.
The National Recovery Administration (NRA) was designed to manage industrial recovery through code-writing, price-fixing, and wage regulations.
This direct intervention fits Hoover's description of 'substitut[ing] government planning for individual initiative.'
3
Eliminate incorrect options based on chronological and historical accuracy.
Medicare belongs to the 1960s Great Society; the CCC did not completely end unemployment; and the US did not withdraw entirely from international relations.
Eliminating these distractors leaves the correct New Deal policy.

Key Concept

The debates over the scope and role of the federal government during the New Deal era.
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Topics

The New Deal: Policies, Reforms, and Debates

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