Opposition to the New Deal

THE GREAT DEPRESSION: NATURE AND EFFICACY OF SOLUTIONS IN THE UNITED STATES

OPPOSITION TO THE NEW DEAL

The Left

Critics from the Left argued that the New Deal was not radical enough to solve the problems of the Great Depression.

1.       Francis Townsend said the New Deal was not adequate in addressing peoples’ needs, and in particular it lacked social security for the elderly.

a.        Many supported Townsend’s idea for a ‘Townsend Plan’, offering $200 per month to the elderly. His proposal became so popular that FDR eventually passed the Social Security Act of 1935, which was based on Townsend’s concept of an old age pension.

2.       Upton Sinclair designed the End Poverty in California (EPIC) program where the unemployed would work in state-run co-operatives that would issue its own currency.

a.        Sinclair was a critic of FDR’s New Deal because he believed it was not radical enough. Though he ran as a Democrat, Sinclair’s ‘production for use’ socialism conflicted with the less reformative measures of the New Deal.

3.       Huey Long, Senator of Louisiana, was among the most adamant opponents of the New Deal.

a.        He accused FDR of failing to redistribute income, and proposed  “Share Our Wealth” as an alternative program to the New Deal. From 1934, Long advocated the radical “Share our Wealth” program, which stated that all private fortunes over $3 million should be confiscated and divided between the population.

b.        In 1935, a Postmaster poll revealed that 4 million people supported Long’s decision to run against FDR in the presidential election of 1936, demonstrating that parts of the public agreed that the New Deal did not address their problems sufficiently.

The Right

4.       Wealthy rightists in support of capitalism formed the Liberty League in 1934 to promote private property and enterprise unregulated by law and attacked Roosevelt throughout the New Deal years.

a.        They believed Roosevelt was too involved in the economy, due to measures like the Emergency Banking Relief Act (EBRA), raised wages under the NRA and raised taxes.

b.        Government spending fuelled inflation.

5.       The major newspaper magnate William Hearst opposed the New Deal in 1935 following FDR’s proposals to significantly increase taxation on the wealthy.

a.        Hearst exercised significant political power through his magazines and newspapers. Following 1935, attacks on the New Deal and accusations of overly-leftist policies became more common in Hearst’s papers.

The Supreme Court

6.       In the Schechter vs. US case of 1935, the Supreme Court found that certain government-imposed regulations such as price and wage fixing in the poultry industry defied the terms of the Interstate Commerce Clause. and the National Recovery Administration was found unconstitutional as a result. 

a.        The Court state that the federal government had no right to interfere in internal state issues and implied that the government had no powers to oversee nation-wide economic affairs.

b.       The National Recovery Administration (NRA, 1933) and National Industrial Recovery Act (NIRA, 1933) were found unconstitutional and therefore closed.

From 1935-6, the Supreme Court found 11 federal laws unconstitutional.

Judiciary Reform Bill, (rejected in July 1936)

7.       In response, Roosevelt tried to implement the Judiciary Reform Bill in order to fill the court with personally appointed nominees that would favour New Deal legislation because the current nine justices were acting against him. Ultimately it failed due to adverse public opinion.

a.        It exposed the limits of Roosevelt's abilities to push forward legislation through direct public appeal and, in contrast to the tenor of his public presentations of his first-term, was seen as political manoeuvring.

The FDR Years: On Roosevelt and his Legacy by William Leuchtenburg 1995

“The New Deal created a more just society by recognising previously unrecognised groups such as organised labour. However, it only

partially addressed these issues.”

The New Deal by Paul Conkin 1967

 “The story of the New Deal is a sad story, the ever recurring story of what might have been”

The New Deal: The Conservative Achievement of Liberal Reforms by Barton J. Berstein

The New Deal “failed to solve the problem of the depression, it failed to raise the impoverished and it failed to redistribute income.”

Women and the New Deal by: Susan Ware 1990

“Women largely remained dependent on whatever benefits would trickle their way.”

-          Women were not given equal opportunities to join the public work projects and made less money than men

§  For example, in the CWA, women were paid 0.40/hour and men were paid $1/hour for the same work

§  The TVA gave women 8% of its jobs

§  The CCC was only open to men.

“If a free society cannot help the many who are poor, it cannot save the few who are rich” JFK

“Courage means going against majority opinion in the name of truth” Vaclav Havel  (Czech president)

JM Keynes, The Means to Prosperity. 1933. “multiplier effect”
When the economy has high unemployment, an increase in government purchases creates a market for business output, creating income and encouraging increases in consumer spending, which creates further increases in the demand for business output.