The New Deal, 19321940

interstate commerce? I mean, if I go to Jimmy John’s, don’t I exit the state of hungry and enter
the state of satisfied?

Thus began the second New Deal, shifting focus away from recovery and toward economic
security. Two laws stand out for their far-reaching effects here. The National Labor Relations Act
also called the Wagner Act, and the Social Security Act. The Wagner Act guaranteed workers
the right to unionize and it created the National Labor Relations Board to hear disputes over
unfair labor practices. In 1934 alone, there were more than 2,000 strikes, including one that
involved 400,000 textile workers.

The most important union during the 1930s was the Congress of Industrial Organizations, which
set out to unionize entire industries like steal manufactures and automobile workers. In 1936 the
United Autoworkers launched a new tactic called the sit down strike. Workers at the Fisher Body
Plant in Flint Michigan simply stopped working, sat down, and occupied the plant.

Eventually GM agreed to negotiate and the UAW won. Union membership rose to 9 million
people as quote “CIO unions helped to stabilize a chaotic employment situation and offered
members a sense of dignity and freedom” – Eric Foner.

And unions played an important role in shaping the ideology of the second New Deal because
they insisted that the economic downturn had been caused by under consumption and that the
best way to combat the depression was to raise workers’ wages, so that they could buy lots of
stuff.

The thinking went that if people experienced less economic insecurity they would spend more of
their money; so there were wide spread calls for public housing and universal health insurance.
And that brings us to the crowning achievement of the 2nd new deal, and/or the crowning
achievement of its communist plot, the social security act of 1935.

Social security included unemployment insurance, aid to the disabled, aid to poor families with
children, and of course retirement benefits. It was, and is, funded through payroll taxes rather
than general revenue, and while state and local governments retained a lot of discretion over
how benefits would be distributed, Social security still represented a transformation in the
relationship between the federal government and American citizens.

Like before the new deal most Americans didn’t expect the government to help them in times of
economic distress. After the new deal the question was no longer IF the government should but
HOW it should. For a while the US government under FDR embraced Keynesian economics,
the idea that the government should spend money even if it means going into deficits in order to
prop up demand, and this meant that the state was much more present in people’s lives.I mean
for some people that meant relief or social security checks; for others it meant a job with the
most successful government employment program, the Works Progress Administration.

The WPA didn’t just build post offices, it paid painters to make them beautiful with murals, it paid
actors and writers to put together plays, and ultimately employed more than 3 million Americans
until it ended in 1943. It also by the way, paid for lots of photographers to take amazing
photographs, which we can show you for free because they are owned by the government.