President: Roosevelt (D); Senate: Robinson (D-AR); House: Byrns (D-TN).
The Social Security Act inaugurated a government pension system funded by a 2 percent tax on the first $3,000 of payroll income to begin in 1937. The act also included unemployment insurance, aid to the states for health and welfare programs, and the Aid to Dependent Children program.
The Wagner Act, sponsored by Senator Robert F. Wagner (D-NY) legislated a legal framework for the relations between employer and employee. The act legalized the right to strike, barred employers for firing worker for their union activities, and required them to negotiate in good faith with a union once it had been certified as a bargaining agent by the National Labor Relations Board.
|Intention: The vast economic forces unleashed by the industrial revolution had fallen hardest upon those forced by their limited bargaining power to work for subsistence wages in dark and dangerous mills, mines, and factories. It was a matter of justice to provide beneficial legislation to allow workers to protect their interests by organizing in labor unions so that they could bargain with their employers as a unit rather than as helpless individuals.||Liberal Line: The [[Wagner Act]] was one of the great landmarks of progressive legislation providing protection to working people from the unregulated capitalist economy. Without the protections of labor law workers would be powerless against their employers.|
|Outcome: The English common law had established centuries of precedent against "combinations in restraint of trade," meaning both combinations of businesses and combinations of workers. But the entry of working men into politics in the 19th century meant that this ancient precedent began to encounter opposition. In the landmark [[Commonwealth v. Hunt]] the Massachusetts Supreme Judicial Court, following the election returns, ruled that unions were legal and workers had a right to strike. The [[Wagner Act]] established a national legal framework in which union and employer relations could be formalized. |
But the granting of monopoly privileges has a simple effect. It allows certain workers the opportunity to charge monopoly prices for their labor. And in the aftermath of the [[Wagner Act]] wages rose substantially, especially in unionzed sectors like steel and autos. In the context of the Great Depression this meant creating more unemployment and extending the depression. The [[Wagner Act]] must be considered partly responsible for the sharp [[Recession of 1937]].
|Conservative Line: Unions are a combination in restraint of trade, monopolies that almost always work in behalf of powerful special interests and against the interest of the consumers and the general interest. But clearly many workers regard labor unions as an essential bulwark against the power of the market. The question is: how much monopoly bargaining right can society tolerate? Seventy years after the [[Wagner Act]] we can see that all power corrupts, even union power. Union power helped destroy the basic steel industry, the automotive industry, and, through government employee unions, has helped develop bloated and ineffective state and local governments.|
1929-1939: A Decade that will live in stupidity.
Seventy years ago the leaders of both US political parties turned away from the policies that had created an economic powerhouse we call the Roaring Twenties. For ten long years Americans suffered through wrenching economic dislocations: deflation, inflation, a four-year economic contraction, endless unemployment, mindless political experiments, and ruthless attacks on businessmen for political gain as their leaders stayed Stuck on Stupid.
Today, after a twenty-five year economic boom, Americans are once more faced with a political elite that wants to monkey with success. It wants to raise tax rates. It wants to restrict trade. It wants to increase government power.
Its time to look back and remind ourselves how it came to be, starting in 1929, that America got itself Stuck on Stupid. Otherwise it could happen again.