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1930s
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The sweeping Democratic electoral victory in 1936 was followed by a deep economic relapse known as the "Roosevelt Recession." In just a few months, industrial production fell by 40 percent; unemployment rose by 4 million; stock prices plunged 48 percent.
Several factors contributed to the "little depression." Reassured by good economic news in 1936, Roosevelt slashed government spending the following year. The budget cuts knocked the economy into a tailspin. Roosevelt's virulent attacks on "economic royalists" also undermined business confidence.
The reform spirit was gone by the end of 1938. A conservative alliance of southern Democrats and northern Republicans in Congress blocked all efforts to expand the New Deal. In the congressional elections of 1938, Roosevelt campaigned against five conservative senators who opposed the New Deal. Nevertheless, all won re-election. Roosevelt's failures showed conservative Democrats that they could defy the president with impunity.
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