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New Deal and Win The War

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  1. New Deal and Win The War

  2. Roosevelt was not without his critics: He was facing still large unemployment numbers, production was still low, GDP and GNP was mediocre at best. • He also wanted social as well as political reform; • The New Deal was struggling and FDR was willing to try many things to make it stick; • Policies, however, were destroying free enterprise and the private sector was reeling from government intrusion. Simply the Gov’t could not keep up with demand for jobs and food.

  3. One very loud critic was Father Charles Coughlin. • An early supporter of FDR, calling the New Deal “Christ’s Deal.” coined the term “Roosevelt or Ruin.” • He also used Radio to reach a large audience—he was based out of Detroit—he was anticommunist, anti-capitalist, and anti-semitism— • Fell out of favor with FDR—too slow, not enough for the people—disagreed that plowing under food was logical.

  4. The most powerful New Deal critic, was the “Kingfish.” Huey Long Governor of Louisiana also a Senator. • He was a ‘Big Government’ ideologue supporting infrastructure projects such as bridges, roads, hospitals, schools and colleges—thoug he remained staunchly segregationist.

  5. He had a very socialistic view of wealth in America—he believed in “Share the Wealth.” • He believed that the New Deal was too conservative—accused FDR of being a puppet to ‘Big Business.’ • He wanted to confiscate all the wealth from the richest people in the country and then dole it out evenly to the American people:

  6. Share the Wealth Philosophy: • 1) $5,000 homestead credit allowance to all American families; • 2) $2,000 guaranteed annual income for all Americans; • 3) Free College Education for all (some would also be offered to minorities); • 4) Shorter Working days; • Government storage of crops to help out both farmers and the poor; a sort of government commissary to ensure all people had enough to eat during bad economic times.

  7. By 1935, Share-Our-Wealth clubs enlisted around 7 million members; • He posed a significant threat to FDR’s re-election in 1936. • Aspirations ended abruptly with assassination in Sept. 1935 in the Louisiana State House; • Son-in-Law of a ruined political opponent.

  8. Other critics: Dr. Francis Townsend ( a gov’t pension for every person) of California and Upton Beall Sinclair also of California; (both very socialistic); • The Follette brothers from Wisconsin—formed communist and Marxist clubs mostly within Unions and Student groups—distanced themselves from Russian Communism—spoke more of Unions and Government associations with the people’s best interest at heart—no over throw of government,just a reform of government.

  9. FDR responded by initiating much new legislation beginning in 1935. • A very radical shift to the left—pushed through such initiatives : WPA, Wagner Act, Social Security Act, and Wealth Tax Act • WPA: Works Projects Administration; promoted economic relief and reform; tried to avoid works of private Industry—paved streets, built bridges, restored forests, employed artists and authors, musicians and dramatists—over 7yr period it employed 8.5 million people, but never at one time and many times the same people were hired again and again—good if you were lucky, but only about 1 million employed at any one given time—Blacks and women were almost always excluded. (beginning for the National Endowment of the Arts)

  10. The Wagner Act—preserved and strengthened section 7 of the NIRA (NRA): • This is the first time that the federal gov’t protected and even recognized Unions—it guaranteed workers the right to collectively bargain—what it doesn’t say, is it mandated that businesses regardless of size must bargain—hurt small business

  11. Social Security Act: • This act created a cooperative federal-state system to provide unemployment compensation and Old-Age Insurance; • Workers would pay a special tax each pay period and when reaching 65 would receive a pension; • Employee and Employer contributions would cover the cost—fairly radical piece of legislation—initially did not include farm laborers, domestic workers, waitresses, service industries or healthcare workers—mostly big business and Industry and manufacturing. …

  12. The Wealth Tax Act: • A tax designed to affect only the top wealthiest in the country; it also created a higher tax rate on business, capital gains, inheritances, large gifts, and any profits from Real Estate; • Trusts and Holding Companies also were faced with restrictions; instead of promoting business and jobs it actually contrary to many historians views, hurt the private sector—and until the New Dealers were ousted in favor of true business people during the War effort—the economy struggled along—eventually falling back into a deep economic depression.

  13. Roosevelt Coalition • Significant because the Democrats broadened its constituency to include small farmers, urban political bosses, ethnic blue collar workers, Jews, and Intellectuals and for the very first time African Americans; • The party of Lincoln saw almost 95% of its base move to the democrat party—large cities for the first time also became democratic bastions

  14. Regardless of the political paradigm shift, FDR mainly won a huge mandate for keeping America out of the European War that was threatening on the horizon. • “I have said this before, but I shall say it again and again and again. Your boys are not going to to be sent to any foreign war!”

  15. America possessed mostly an isolationist attitude. Movies and Books of the day told of horrors of war—lesson stay out of war at all costs; • Margaret Mitchell’s Gone With The Wind; and Sergeant York were Pulitzers and academy award winners; • The Nye Committee after investigation into the munitions industry contended that greedy industrialists and munition manufacturers provoked and got America embroiled into WWI.

  16. War-mongering profiteers had popularized gruesome atrocities abut Germany convincing the U.S. to join in European entanglements; • The Senate Committee suggested that even in the late 1930s America should ignore the propaganda and hyperbole enticing America into another foreign war; • Surely the atrocities of Hitler, Mussolini or Hirohito could not be as bad as reported.

  17. To ensure America’s neutrality Congress backed by a isolationist population was to pass Neutrality Acts—the only foreign policy move of any significance before actually entering the war was recognizing the Soviet Union—FDR argued that open negotiations and recognition of the Soviet Union would open large doors of trade for the United States. • FDR until the day he died, though he did finally understand not to trust Stalin, thought he could charm “Old Uncle Joe!”

  18. Neutrality Acts • Neutrality Act of 1935—prohibited shipment of American munitions or weapons to any belligerent nation—FDR opposed this legislation because it did not differentiate between good guy or bad guy; • Neutrality Act of 1936—forbade Americans to loan financial support to any belligerent nation; again without distinguishing between aggressor or victim;

  19. The third Neutrality Act made the first two Acts permanent; American citizens were forbade to travel on ocean-going vessels of warring nations(try to avoid the Lusitania); It did, however, allow FDR to draw up a list of items that could be sold to belligerent nations—wheat, rice, food stuffs and medicine—and then only on a “Cash and Carry” basis. • Publicly FDR promised not to involve America in a foreign war; • Privately he admitted that entry into WWII was inevitable.

  20. A quick fall of France to Germany in the Fall of 1940 shook the American Public; America also realized that only England stood between democratic nations and Totalitarian tyranny. • How did American involvement in WWII affect both political attitudes of liberals and conservatives? • How did WWII affect the American economy, short term, long term? • How did it affect the classes of society in America? Rural and Urban?

  21. World War II brought about a political, psychological, and economic shift to the right in America. Three questions troubled Americans during the war years: • 1) Big Government • 2) The Economy • 3) Communism abroad and at Home • Also the New Deal had not aided much in the gender and race sectors of America—WWII changed that for a while at least.

  22. The war brought about the need for employment—many others filled the military ranks—opening the work force up to the jobless, Women and African Americans … • The New Deal did very little if anything for Women, African Americans or Latinos—in fact it did very little for the Poor Whites.

  23. By the time of Pearl Harbor almost 10 million Americans remained unemployed; by 1942, unemployment was almost unheard of. • There actually were some labor shortages; the most dominant gender was women—as most men were in the military— • “Rosie the Riveter” was a popular icon by 1945—women made up 36% of the nations work force.

  24. Still there were great sacrifices on the part of everyday Americans; Keynesian Economist point to the war as how well deficit spending was for the economy— • Unfortunately working and destroying production doesn’t make an economy healthy—Americans had to ration and do with out for the war effort. • There were no true consumer goods for workers to buy—very little that wasn’t earmarked for the war effort—many people invested 10% of their income into War Bonds—made sense, no real consumer market.

  25. War Bonds provided a much needed supply of capital for the war effort—wonder why deficit spending wasn’t enough? • Celebrity auctions for Bonds—unpatriotic not to buy them; • War influenced American fashion—to conserve cloth material men forwent vests, elbow patches for jackets, and did away with cuffs. • Women’s skirts became shorter and narrower—two piece bathing suits—conserve material.

  26. Americans also cut back on food stuffs and consumer goods; • Needed ration cards to get meat, sugar, gasoline, coffee, and sort of metal needs; • Americans were somewhat frustrated—first time in years they had money and nothing to buy.

  27. American began to arise form the dolfrums of depression: • 1) Full employment—though standard of living lagged due to rationing and war effort; • 2) Labor unions due to the NRA became more powerful and many people joined them; • 3) Farm incomes rose, while tenant farmers fell—ex-laborers took jobs in industry; • 4) economists claimed Keynesian economics was working, while Friedmanites claimed that supply side effects were more benficial—as there wasn’t much to buy—and Americans were saving their money and investing it in the War Effort.

  28. Still, there were issues to look at: • 1) Liberals and Reformers gave priority to Military needs over social and economic reform; though a thorn in the reformers side the high school dropout rate increased to over 3million as kids looked for war industry work; they also ignored labor laws restricting women and children. Americans ignored the tribulations of the Japanese-Americans—over 100,000 were interned in dismal filthy rudimentary camps—after re-election in 1944 FDR canceled the internment orders.

  29. 2) FDR had to abolish segments of the New Deal, he needed real business men to run the war effort not academics and theories; winning was more important than reforming; • 3) Rise in the Federal deficit—military costs always rise the deficit, social expenditures plummeted; Some Senators wanted to broaden the range of Social Security and to include national healthcare coverage—the costs of the war restricted much increase in these areas.

  30. 4) Though the war effort put many people back to work, it also displaced many of the poor(unskilled labor). 20 million Americans lived at subsistence levels and near starvation—unskilled labor made on the average of 0.64 per hour—Skilled labor made $7 or $8 per hour. • 5) Changes in the composition of the federal bureaucracy. The war effort cut many social programs—many liberals who wanted to win the war but also fund enormous social programs became disillusioned and left the government. What many historians fail to acknowledge is that theoreticians cannot win the war and poverty at the same time. Businessmen understood how to organize, prioritize and mange the war effort properly.

  31. By 1944-1045, as the war effort became more efficient nd productive, many unskilled laborers refilled the ranks of the unemployed—War material is not a panacea for economic ills. • 6) Increase in government employees. Expenditures in Washington rose from $9billion to $98.4 billion. Again deficit spending even on a war footing did not succeed in the end. • 7) Created a Military Industrial Complex. A systematic relationship between Military and Big Business. $250 million per day was spent on military contracts—hurt many small businesses.

  32. 8) Created a huge Corporate State competing with a large Welfare State; organized labor became strong and industry became dominant. • Agriculture population fell by 17%; better weather, improved fertilizers, modrn technology and better efficiency methods displaced much manual unskilled labor; many farms were conglomerated in large Agribusiness entities. • 9) A more urban and technological society; research and development expanded, science became very important to production etc … and more than 15 million people moved away from the farm to the industrial and manufacturing centers in America.

  33. The War changed America: • 1) America emerged as a leader in global economics and politics—we were not devastated; • 2) U.S. possessed the Atomic Bomb—the most powerful nation in the world; • 3) Americans were ready for a rest and return to laissez faire capitalist economics; • Also FDR died ending an era of depression, recovery, relief and reform …