History

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co l l ect i ve bar gai n i ng r ecogn i t i on of the Act was a con ser vat i ve at tem p t to hal t l abou r d i spu tes and i n cr ease p r oduct i v i t y, as the cr eat i on of the N L RB as a m ed i ator bal an ced econom i c power between l abou r and busi ness, en cou r agi ng the CIO st r i kes of 1936 and 1937. I n these r espect s, then , the New D eal was con tem por ar i l y v i ewed as host i l e to busi ness and on l y r el i ed on busi ness when l ack i ng state capaci t y. Ber n stei n ar gues that the New D eal was con ser vat i ve i n what i t d i d not do: i t s f ai l u r es to r est r uctu r e the econom y and em p l oy Key nesi an m ethods. I t i s t r ue that the CWA and FERA wer e l im i ted by a bel i ef i n r el i ef over st im u l us, the CWA bei ng cl osed down i n 1934 to bal an ce the budget and the FERA p r ov i d i ng $25 ou t of a r equ i r ed $10 0 f or subsi sten ce. Add i t i onal l y, the r egr essi ve tax im posed by Soci al Secu r i t y Act l ed to the so- cal l ed ?Roosevel t r ecessi on?i n 1937, a r esu l t of t i gh t

f i scal po l i cy. Ber n stei n?s m ai n ar gum en t i s that FDR f ai l ed to nat i onal i se the ban ks i n 1933, when cond i t i on s wou l d have al l owed . H owever , i n 1933, the New D eal needed to r estor e con f i den ce to ease the l i qu i dat i on s, and on l y an act i on to bo l ster the status quo cou l d ach i eve th i s. Add i t i onal l y, the gover nm en t l acked the i n st i tu t i onal capaci t y to do th i s, and thus con ser vat i sm her e was not a r esu l t of f ai l ed po l i cy, bu t of con tex tual l im i tat i on s and the need f or con f i den ce. M or eover , the begi nn i ngs of Key nesi an i sm cou l d be seen i n the W PA, wh i ch h i r ed one f i f th of the nat i on?s wor k f or ce f or st im u l at i ng i n f r ast r uctu r e p r o ject s. I n the f i nal anal ysi s, then , ther e was l i t t l e congr essi onal suppor t f or h i gh r el i ef spend i ng, and m uch p r essu r e f or a bal an ced budget . I t i s ther ef or e val i d to say that Ber n stei n?s accusat i on of con ser vat i sm i s i nval i d ; l im i t s to spend i ng wer e l ar gel y a r esu l t of con tex t , not po l i cy.

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