slideshow

Ask the Politially Correct!

Question?

What was FDR's Second New Deal?

Politically Correct Resolution:

During the depression years while the United States had a 25%

unemployment rate, the government was paying the larger farmers

not to grow crops to creat a world wide demand for agricultural

products. While many Americans were starving, the international

financial community was investing in Germany's (Nazi) rearmament.

In fact one of the investors, Henry Ford, was instrumental in

having a factory in Germany that built tanks for the Nazi's.

In the 1930's while Americans starved, the German people,

under Hitler, with Investments (seed money) from the international

financial community suffered little from the Depression years.

The "second" New Deal (1935-40s) aimed at restoring the economy

from the bottom up (History 1302)!

The "second" New Deal attempted to end the Depression by spending

at the bottom of the economy where government funds attempted to

turn non-consumers into consumers again.  Many of the programs lasted

only until World War II while others became permanent fixtures in

American life. The Works Progress Administration was a huge

federal jobs program that sought to hire unemployed breadwinners for

the purpose of strengthening their family's well-being as well as boosting

consumer demand.  The jobs varied but consisted of mainly of construction

of public roads, buildings and parks.  Over the course of its

life (1935-43) over eight million Americans worked on WPA projects.  

This was "counter-cyclical demand management" on a huge scale.

The 1935 Social Security Act set

up a modest worker-funded but federally-guaranteed pension system.  Not

on the princely scale that had had advocated, nevertheless, Social

Security (at the time) did act as a safety net for a few older workers,

promoted increased some consumer demand and earned a place as a fixture on

the American political and social landscape.

Finally, another significant component of the "second" New Deal was the

National Labor Relations Act of 1935.  Usually called the Wagner Act after

its sponsor, Senator Robert Wagner of New York, this law attempted to prevent

employer's use of intimidation and coercion in breaking up unions.  It set

up the National Labor Relations Board to guarantee the right of collective

bargaining for American workers.   The results were immediately discernable: 

the formation of the Congress of Industrial Organizations whose auto worker

and coal miner units soon saw their wages increase significantly.  Again,

higher wages among the masses of the working class is an example of the

"second" New Deal's attempt to restore the economy from the bottom up.

Assessing the legacy

World War II ended both the temporary New Deal programs and the Depression

they were attempting to cure. Keep in mind that many facets of the New

Deal--Social Security, the Federal Deposit Insurance Corporation and the

Securities and Exchange Commission to name only three--have remained

in American life from the 1930s until the present. 

War ended the Depression simply because of increased government spending,

an intensified version of what Roosevelt was already doing with the WPA

and similar programs..  Responding to the external threats posed by the

Axis Powers (Germany, Japan and Italy) Roosevelt and the Congress threw

fiscal caution to the wind and spent what was necessary to win the war. 

In so doing, they also achieved pre-Depression levels of employment and

prosperity.

What then is the legacy of the New Deal as a whole?  Would it have ended

the Depression? The best answer to that is that it went a long way toward

alleviating the worst suffering of the Depression while still being captive

to the conventional thinking (political, fiscal, racial) of the day. One

cannot answer the question of whether it could have ended the Depression

based on historical facts.  World War II interrupted the process.

What are the other long-term consequences of the Depression and New Deal? 

The rise of the "Roosevelt Coalition" of farmers, union members, working

class people, Northern blacks and liberals made the Democratic Party the

nation's dominant party for almost sixty years.  Further, the political

consensus that developed after World War II held that never again should

the government allow another depression to take hold.  Thus, there followed

an unprecedented level of federal economic intervention.   This huge

expansion in the role, size and power of government in American social

and economic life is aptly summed up in Republican President Richard Nixon's

famous 1971 remark, "We're all Keynesians now." (History 1302)

Basically the "Keynesians Theory" was spend your way to prosperity. The

same theory that is being used today! It didn't work then and it won't

work now! That is, if the special interests are allowed to get their

sticky fingers in what is left of the "American Pie"!

"How fortunate for governments that the people they administer to don't

think"! (Adolf Hitler)

"MEMORES ACTI PRUDENTES FUTURI"

(Mindful of what has been done, aware of what will be)