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The lessons of the Great Depression

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  1. Kuromantis

    To ameliorate the immediate crisis, the federal government funded relief, jobs, and infrastructure. In the longer term, it established a new normal that included a national retirement system, unemployment insurance, disability benefits, minimum wages and maximum hours, public housing, mortgage protection, electrification of rural America, and the right of industrial labor to bargain collectively through unions.

    These programs were rife with limitations. Social Security and unemployment insurance were tied to jobs, rather than citizenship; federal backing for mortgages redlined neighborhoods considered too nonwhite or immigrant; whole categories of workers were exempted from Social Security and fair-labor standards, such as those doing domestic and agricultural labor; and many necessities for a decent life, such as paid sick days and health coverage, were left to the discretion of employers or the bargaining brawn of unions. Yet flaws and all, the New Deal constructed a social safety net that undergirded a long period of growth and prosperity.

    The new deal was experimental and incremental—not ideological. Roosevelt and his advisers were far from the clairvoyant visionaries of legend. They never had a master plan. Rather, in the administration’s first 100 days, they implemented a flurry of laws and regulations. If those programs worked, they remained. If they didn’t, they were dropped, to be replaced by others.

    The National Industrial Recovery Act, for example, with its voluntary codes of fair competition for prices and wages and limited encouragement of collective bargaining, proved inadequate, and then was ruled unconstitutional. The administration quickly developed alternatives, including the National Labor Relations Act (known as the Wagner Act), which offered a clearer path to unionization.

    Roosevelt was also remarkable for the manner in which he successfully disarmed most of his political opponents. It may be tempting today—with our stalemated politics, deeply divided electorate, and inflammatory media—to imagine that FDR, who won by landslides in 1932 and 1936 and by a comfortable margin even when seeking an unprecedented third term in 1940, enjoyed the luxury of a national consensus. Nothing could be further from the truth. The Roosevelt administration was attacked from the right by disapproving Republicans, business leaders who vowed to destroy the “socialist” New Deal, wary Southern Democratic members of Congress, and the hugely popular Roman Catholic radio host Father Charles Coughlin. Coughlin’s Golden Hour of the Little Flower program regularly drew an audience of more than 30 million into his anti-Roosevelt, anti-Communist, anti-Semitic, isolationist, and conspiratorial miasma.

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