Social and Economic
Reform
FDR says time has come for gov’t to do more to promote the
general welfare and intervene to protect citizens’ rights
Need to address problem of elderly, poor and unemployed;
help farmers, create new public works projects and protect
workers’ rights
WPA (Works Progress
Administration)
Built or improved nation’s highways, dredged rivers and
harbors, promoted soil and water conservation
Increased federal deficit from $461 million to 4.4 billion
John Maynard Keynes (economist) supported idea saying it
put money into hands of consumers who would buy more
goods, stimulating the economy
Calls it Pump Priming
Social Security Act
Creates a pension system for retirees
Establishes unemployment insurance and workman’s
compensation
Provides aid for poverty stricken mothers and children, blind and
disabled
Doesn’t cover domestics or farmworkers (mostly African
Americans
Aid to Farmers
REA (Rural Electrification Administration) – loaned money to
electric utilities to build power lines, bringing electricity to
rural areas - brought electricity to 80% of farmers by 1950
Gov’t committed to providing subsidies to farmers
Labor Unions
NLRA (National Labor Relations Act) – Known as the Wagner
Act: recognized the right of employees to join labor unions
and gave workers right to collective bargaining
employers will negotiate with unions concerning
wages, hours, etc.
Created the NLRB (National Labor Relations Board) to
look into workers complaints
Fair Labor Standards Act: establishes min. wage, and
workweek; outlaws child labor
AFL-CIO: formed and UAW in Flint holds a sit-down strike in
1936
Court Packing
Schechter Poultry v United States is heard in before 1936 elections and
overturns one of key laws of the New Deal
unanimously rules that the President has no power to regulate
interstate commerce so the NIRA was unconstitutional
Rules parts of AAA as unconstitutional
FDR furious – concocts plan to ‘pack the court’
Constitution does not specify how many judges should sit on the
Court, FDR proposes appointing six new members, stating that the judges
were getting older and were overworked
seen as a move to upset the balance of power between the branches
Court starts to see things ‘FDR’s Way’ and many decisions come in 5-4 in his
favor (switch in time to save nine)
Court begins to accept larger role of Federal Gov’t in the lives of citizens; but
FDR’s mojo is weakened and he loses support for further New Deal
legislation
Upswing leads to
downturn
Economy sees improvement in 1935-36 so FDR pulls back on some spending to
reduce deficit
miscalculates and as he reduces spending Fed. Reserve Board raises
interest rates and economy moves into a tailspin – unemployment soars to 20%
again