The Second New Deal & Its Impact

Shift Toward the “Second New Deal” (starting 1935)

• Franklin D. Roosevelt (FDR) pivots further left, unveiling broader, more liberal programs.
• Goal: extend federal help to groups still suffering after the first phase of the New Deal.
• Many policies created after 1935 remain embedded in U.S. economic life today.

Opposition From the Right

• Main critics: conservative Republicans and the Supreme Court.
• Supreme Court (then solidly conservative) strikes down two marquee laws:
  • National Recovery Administration (NRA).
  • Agricultural Adjustment Act (AAA) — later rewritten and revived.
• Congressional Republicans object to
  • Cost: exploding deficits.
  • Scope: fear of creeping socialism eroding capitalism.
• Popular political cartoons capture these worries:
  • “Ring-Around-A-Roosevelt, pockets full of dough” — programs depicted as children living off FDR’s money.
  • Roosevelt as a card-dealer omitting the “Joker,” implying he rigs the deck.
• Public impact: Small, because Republicans were blamed for the Great Depression and held few seats in Congress.

Criticism From the Left: “New Deal Doesn’t Go Far Enough”

Father Charles Coughlin

• Catholic priest from Michigan; radio audience in the hundreds-of-thousands nationwide.
• Early praise: called the New Deal “Christ’s Deal.”
• Later shift:
  • Claims FDR cozies up to bankers & corporations.
  • Calls for: a minimum wage, a 40-hour work week, and nationalization of railroads & banks.
  • Anti-Semitic rhetoric: blames economic woes on “Jewish bankers,” later endorses Adolf Hitler — reputation collapses when WWII begins.

Huey P. Long (“The Kingfish”)

• Populist Louisiana governor (elected 1928) → U.S. Senator; effectively ran Louisiana as a one-man political machine.
• Strategy: tax oil companies and wealthy residents; spend on roads & schools while skimming graft.
• Turned against FDR: deemed the New Deal too bureaucratic and too friendly to big business.
• Launches “Share Our Wealth” (announced 1934):
  • Impose steep taxes on top earners.
  • Promise every family a home and annual income of \$2,500.
  • Ensure ownership of modern conveniences (automobile, radio).
  • Thousands of local “Share Our Wealth” clubs spring up.
• Threat to FDR: intended to run for president in 1936 and siphon Democratic votes.
• Fate: assassinated in the Louisiana State Capitol in 1936, removing immediate political danger to Roosevelt.

New Federal Policies of the Second New Deal

Works Progress Administration (WPA) — created 1935

• Mission: RELIEF (jobs) and RECOVERY (public works).
• Heavy construction projects: dams, roads, bridges — provide jobs and long-term infrastructure.
• Cultural branches:
  • Federal Art Project → murals, sculptures.
  • Federal Writers’ Project → state guides, oral histories.
• Inclusive hiring: men & women, young & old.
• Cumulative impact over 8 years:
  • Jobs for nearly 8{,}000{,}000 Americans.
  • Infused roughly 11{,}000{,}000{,}000 into the economy.

Social Security Act — enacted 1935

• Multifaceted safety net:
  • Old-age pensions.
  • Aid to disabled persons.
  • Aid to dependent children & single mothers.
  • Unemployment insurance.
• Financing: mandatory payroll tax — employee contribution matched by employer; insulated from annual congressional budget battles.
• Southern Democratic demands forced two occupational exclusions at outset: farm workers and domestic servants (disproportionately African-American). Coverage added in the 1950\text{s}.

Strengthening Labor Rights

National Labor Relations Act (Wagner Act) — 1935

• Guarantees right to organize unions, strike, and boycott.
• Creates National Labor Relations Board (NLRB) to mediate labor-management disputes.
• Membership boom: union rolls swell dramatically between 1935 and 1938.

Fair Labor Standards Act — 1938

• Abolishes child labor in manufacturing.
• Introduces first federal minimum wage of 0.40 per hour.
• Establishes standard 40-hour work week; overtime (time-and-a-half) required thereafter.
• Provisions remain fundamental to U.S. labor law today.

Political Climate & the “Roosevelt Recession”

• Election of 1936: FDR wins 98.5\% of electoral votes — overwhelming mandate for the New Deal.
• Despite popularity, FDR worries about chronic deficits and trims spending in 1937 → unemployment jumps, producing the “Roosevelt Recession.”
• Economists cite episode as evidence deficit spending stimulates demand.
• Some programs pared back but core structures survive.

Foreign Crises & Wind-Down of the New Deal

• Late 1930\text{s}: rise of totalitarian regimes (Hitler, Mussolini) shifts Roosevelt’s attention abroad.
• Outbreak of WWII ultimately redirects federal spending to defense, sunsetting many New Deal relief agencies.

Lasting Legacy

• Permanent federal role in the economy: regulation, safety nets, infrastructure spending now expected responsibilities.
• Safeguarded democratic capitalism: U.S. avoided extremist alternatives (fascism, communism) adopted elsewhere under Depression pressures.
• Political realignment: new Democratic coalition — labor, African-Americans, urban ethnics — dominates mid-20^{\text{th}}-century elections.
• Infrastructure foundation for WWII victory: WPA roads, TVA dams, and other projects fuel wartime industry (e.g., hydro-power essential in atomic-bomb production).
• Enduring statutes: Social Security, NLRB, Fair Labor Standards Act, and many regulatory frameworks remain pillars of modern U.S. policy.