The Great Depression and Vietnam War

The Great Depression and Vietnam War

On October 29, 1929 (termed as ‘Black Tuesday’), when Americans woke up, they found out that the banks, in which they had invested, had gone bankrupt (collapsed). All their money was lost. This situation of banks continued for a decade and this period was known as the ‘Great Depression’.

There were many reasons that led to this depression, but the two main factors were: firstly, the disparate distribution of money (wealth) during the 1920s and, secondly, the far-reaching stock-market speculation during the 1930s. Ben Bernanke (2000), a renowned macroeconomist, wrote the following, “…the principal debate about the causes of the Great Depression in the United States was over the importance to be ascribed to monetary factors. It was easily observed that the money supply, output, and prices all fell precipitously in the contraction and rose rapidly in the recovery.” (Bernanke, 6) The rich got richer and the poor got poorer. This disparity generated an unstable economy and the American economy capsized. The effect of this Great Depression spread all over the industrialized world. One of the main causes of this gap between the rich and the poor (normally the working class) was, the greater than before manufacturing productivity throughout the 1920s. The average output was augmented by 32%, whereas the average salaries of the workers had a marginal 8% upsurge. If we calculate the ratio, the increase in wages was only one fourth of the production output. Moreover, the prices of products were invariable and the bulk profits were pocketed by the corporate owners. The decision of the Federal Government in lowering the taxes also accounted for the gap between the rich and the poor.

Authorities tried to ease out the economy in any possible manner, but not all of the schemes were successful. Some proved to be defunct and further deteriorated the economy, like the ‘Hawley-Smoot Tariff Act’. But some schemes, like the ‘Boulder Dam Project’ (now known as Hoover Dam), really helped in somewhat stabilizing the economy. The construction of the dam was started in order to generate employment opportunities. Another step towards stabilizing the banks and the economy was the setting up of the ‘Reconstruction Finance Corporation’. William H. Young and Nancy K. Young (2007) wrote as follows, “Hoover presented many proposals to Congress programs to reform the banking program, to expand public works across the country, and to create the Reconstruction Finance Corporation (RFC), an agency that could grant government loans to save banks, farms, railways, and businesses from bankruptcy.” (Young et al, 241). It was meant to make available crisis funds for banks going bankrupt. The intention was to safeguard those people’s money that was invested in those banks. The system was so effective that it is widely used even today.

In order to combat, recuperate and restructure the Great Depression affected economy, President Franklin Delano Roosevelt ratified a policy that became famous by the name ‘New Deal’. It was a very effective policy, which was supported by Elna C. Green (2003), “Such an ambitious agenda grew out of a very different economy: where the New Deal tried to minimize suffering during a devastating depression, the strong post-World War II economy encouraged policy makers to dream of the complete elimination of poverty.” (Green, xii). Under the New Deal, many programs were started that shaped the economy in many ways. People were provided employment and many reform works were undertaken. America’s economy that was at its lowest slump roared back to its feet. The New Deal had unswerving humanitarian intents and it also aimed at expanding Federal powers in order to attain its goals. America would never have been the same without Roosevelt’s intervention.

Vietnam War

The Vietnam War started in 1945 and ended in 1975. In a larger perspective, the main reason for the involvement of the US in the war was its Cold War with the USSR. There had been a few events over the period 1947-1955 that led to the involvement.

In 1947, State Department analyst, George F. Kennan, developed the Containment doctrine in order to stop the USSR from spreading Communism. This doctrine influenced the US foreign policy to a greater extent. During 1948 and 1949, the USSR tried to oust the US, British and French forces from West Berlin by cutting all entrances to the city. The US in return carried out the Berlin airlift and also dropped crucial supplies into West Berlin. During the latter half of 1949, the USSR tested its first atomic bomb. In October, the same year, Communist forces of Mao Zedong took over control from the Nationalist government in China. These events forced the US to assume whether the Communists were planning to take over the world and even plot secret operations in the US. Subsequently, NSC-68 memo was written, according to which the US government was supposed to increase its military buildup.

It was the speech of President Dwight David Eisenhower, in 1954 that became the outline for the US Cold War policy. In his speech, Eisenhower went a step ahead of Kennan’s Containment policy. He stated that Communism should not be stopped in the US alone, but it should be opposed all over the world. This theory was called the Domino theory. In such circumstances, Vietnam seemed to be exceptionally significant, because if Vietnam became communist, its neighbors (Indochina and all of Southeast Asia) might as well become communist. Owing to this theory, the US wanted to avert the elections (1956) in Vietnam and supported a Vietnamese nationalist, Ngo Dinh Diem, who opposed the elections and later, with the help of the US, became the President of South Vietnam. Noam Chomsky (2004) wrote, “Returning to 1954, after the Geneva Conference, the United States quickly seized control of South Vietnam, eliminating British and French influence and establishing the Diem dictatorship, which, in a sense, still persists.” (Chomsky, 24). In 1960, John Fitzgerald Kennedy was elected as the US President. In 1962, Military Assistance Command of Vietnam (MACV) was formed, under which American personnel helped in training the Vietnamese army (ARVN) and within a year, the American presence in Vietnam rose to 15,000.

At the home front, America witnessed a lot of protests against the Vietnam War. The public faith in the government and its leaders weakened. The main uprising was from the students, as Carl Cavanagh Hodge and Cathal J. Nolan (2007) wrote, “Among domestic opponents of the Vietnam War the reaction was visceral, as was Nixon’s own response to the reaction. Having soothed student opposition to the war by ending the draft, he now faced the biggest protests to date. That held at Kent State University on May 4 was the most consequential.” (Hodge et al, 308)

During 1968-1973 various efforts were initiated to end the conflict through diplomacy and finally, in January 1973 an agreement was arrived at. The US forces were pulled out of Vietnam and the US prisoners of war were freed. The Vietnam War was the longest in the American history. It resulted in 58,000 deaths and 350,000 casualties of Americans and an estimated 2 million deaths of the Vietnamese. The American Congress learnt a lesson from this war and enacted the War Powers Act in 1973. According to this act, the President was required to get a clear approval from the Congress before committing the American forces anywhere oversees.

The present scenario is such that even Moscow wants to better its relationship with the US, regardless of what happened in Vietnam.