Chapter 22: The New Deal Section 22.2- The Second New Deal Focus Question: What major issues did the Second New Deal address? Extending Social and Economic Reform Though progress had been made toward easing the problems of the Great Depression, Roosevelt knew that much work still needed to be done. In 1935, FDR launched a campaign to help meet the goals of relief, recovery and reform- the second New Deal. As FDR planned a new round of spending, critics charged that New Deal programs, and their high price tags, were wasteful ¾ The government was spending money it did not have ¾ The federal deficit had soared to $4.4 billion FDR adopted Keynsian economics by John Maynard Keynes, a British economist who believed the government should be more proactive in the economy; rejected Adam Smith’s ideas of laissezfaire ¾ tax cuts ¾ increase government spending which would create a deficit ¾ he would have the government intervene on a massive scale by creating jobs even though the government would go in debt ¾ the idea was a trade off where priorities would be that government would have to give up something to get something and that was to create demand ¾ jobs would be made through the CCC, CWA, PWA, TVA, where the unemployed would now be hired by the government and get a check from Uncle Sam ¾ now with money these individuals can purchase products ¾ with an increase in demand, private industry would then have to produce more so they would hire workers ¾ these jobs could be taken from the CCC, CWA, etc. and now these individuals would have jobs and pay taxes which in turn would help pay off the debt since they can now be taxed New Programs Provide Jobs The Works Progress Administration (WPA) created millions of jobs on public-works projects ¾ workers built highways and public buildings, dredged rivers and harbors, and promoted soil and water conservation ¾ Artists were hired to enhance public spaces Social Security Eases the Burden on Older Americans The Social Security Act created a pension system for retirees It also provided: ¾ unemployment insurance ¾ insurance for victims of work-related accidents ¾ aid for poverty-stricken mothers and children, the blind and the disabled More Aid Goes to Farmers The Rural Electrification Administration helped bring power to isolated rural areas The government provided price supports for agriculture Waster Projects Change the Face of the West The government also funded irrigation systems, dams, and other water projects in the West. Labor Unions Find a New Energy National Labor Relations Act (NLRA) ¾ set up the National Labor Relations Board to supervise labor-management relations ¾ it strongly favored labor unions Fair Labor Standards Act (Wagner Act) ¾ established a maximum normal work week of 40 hours ¾ a minimum wage of 40 cents/hour ¾ outlawed most forms of child labor ¾ still exists today Workers Use Their Newfound Rights As union activity rose, a split emerged in the American Federation of Labor The AFL represented skilled workers who joined craft or trade unions ¾ the union made little effort to organize workers in the major industries John L. Lewis formed the Congress of Industrial Organizations (CIO) to unionize industrial workers. ¾ in 1936, the CIO’s United Auto Workers Union staged a sit-down strike at General Motors ¾ after 44 days, GM recognized the new union This success led to others, and union membership soared Challenges to the New Deal Roosevelt wins the 1936 Presidential Election in a landslide, and will win altogether an unprecedented four terms as president. Despite his popularity, his New Deal programs came under fire. The Supreme Court Opposes the New Deal After his inauguration in 1937, FDR made a bold proposal. ¾ he wanted to add 6 more justices to the US Supreme Court making the number go from 9 to 15. (Judicial Reorganization Bill) COURT PACKING ¾ He cited that the justices were too old and this would alleviate the work load on the court ¾ his real reason was he was being outvoted 7 - 2 on New Deal programs A New Downturn Spurs Conservative Gains After the economy had begun to improve in 1935 and 1936, FDR cut back on government spending to reduce the deficit. At the same time, interest rates rose. ¾ the combination caused the economy to sink again, and unemployment soared . With his support wavering, FDR did not try to push further reforms through Congress. By 1937, the economy snapped and FDR’s critics called it the Roosevelt Recession . WWII would start and the country’s attention would be diverted from the Great Depression to war.