The Great Depression and the New Deal

On October 29, 1929 — "Black Tuesday" — the New York Stock Exchange collapsed, wiping out millions of investors and triggering the Great Depression. Between 1929 and 1933, U.S. GDP fell by 30%, industrial production dropped by nearly half, and unemployment soared to 25% — roughly 13 million Americans without work. Over 9,000 banks failed, destroying the savings of millions. The Dust Bowl — a catastrophic drought across the Great Plains — compounded the misery, displacing 2.5 million people. President Herbert Hoover's limited response proved inadequate, and in 1932, Franklin Delano Roosevelt won the presidency in a landslide, promising a "New Deal for the American people." Between 1933 and 1938, FDR pushed through an unprecedented wave of legislation: the Social Security Act (1935) created a federal pension system and unemployment insurance; the FDIC insured bank deposits; the Securities and Exchange Commission regulated Wall Street; the Works Progress Administration employed 8.5 million people; and the National Labor Relations Act guaranteed workers the right to unionize. The New Deal did not end the Depression — World War II did that — but it fundamentally transformed the relationship between the American government and its citizens, creating the modern welfare state.