FDR, New Deals, and the Limits of Power 195and labor would have money taken by the government [the so-called FICA
tax still on pay stubs today] and put into the Social Security fund until the
workers were eligible to receive it. While many industrialists opposed the Act
because of the contributions they were being forced to make, FDR had
plenty of corporate support for Social Security, including the heads of many
of the biggest banks like Chase Bank and Goldman Sachs, the directors of
Kennecott Copper and the U.S. Rubber Company, executives from Proctor &
Gamble, and Henry Harriman, the president of the U.S. Chamber of
Commerce.
With such ruling class support, it was certain that Social Security would
be much different than Townsend’s more radical plan. In fact, it had several
flaws. There were many exemptions, so farm workers, domestics, and those
who worked for themselves were not covered. More so, since it was funded
by taxes on both bosses and workers, it actually took money out of circulation
at a time when more purchasing power was needed. But, for the elite, the
Act stabilized Capitalism. It raised people’s expectations for the future by
giving them a stake in the economic recovery—if the depression eased, then
they would have more money to invest in their pensions, so it was in every-
one’s interests to fix the economy. It was, however, a conservative program in
that it maintained the current capitalist structure of ownership, production,
and distribution, and it included most Americans, including the wealthiest,
which is why it remains an important program today. It did not take from the
wealthy and give to the impoverished, nor did it give the recipients—labor-
ers—any decision-making rights regarding taxation or benefits. But it did,
especially for the aged, create more hope that they would soon have some
money to spend and sent the message that Roosevelt was listening to the
complaints of average Americans.
FDR also reached out to labor, signing the so-called Wagner Act to allow
workers to legally form unions and bargain with their employers in 1935 [see
section below]. But, in terms of addressing the depression, the creation of the
WPA, the Works Projects Administration, on April 8th, 1935 was much more
vital. The WPA put the government in the business of creating jobs in peace-
time as never before, 8 million total with a peak of 3.3 million in 1938, and
thereby providing wages and increasing consumption, which was the central
issue of the depression. The WPA was a response to the criticism of people
like Sinclair and Long, and it was most-funded government jobs program to