On it's face we can see that the propaganda was false. The labor movement resulted in unprecedented prosperity for the United States, and a standard of living unrivaled in the world. Prior to the labor movement, American capitalism was efficient at producing goods, but poor at creating markets. The business cycle was marked by rapidly alternating periods of chaotic over-production and recession. Once a piece of the pie was given to the workers themselves, they were able to purchase ever increasing amounts of those same goods, and the consumer-driven economy was born. Offhand I can't think of much of a down-side to the labor movement, except for the fact that it's nearly gone today.
So what about the propaganda? Was it a bunch of lies? Not at all. Many of the most outspoken labor leaders of the time were Communists, Anarchists and other associated leftists. The sources these folks derived their ideology from often advocated the violent overthrow of governments and the confiscation of property. The leaders were accused of wanting to establish a worker's state wherein class and property would be abolished. They were accused of working outside of the system, and of being opposed to the Constitution and law. The accusers were correct in some cases, but despite it all... the republic survived. In fact, we never even came close to a worker's revolution in the United States. There were incidents here and there, to be sure, but the massive civil strife that other societies in that era witnessed were wholly absent from the American scene. There are good reasons it never happened here. Despite the fact that some leaders were pretty far to the left, the rank and file largely saw no benefit in throwing the baby out with the bath water. The rank and file just wanted a fair shake regarding wages, hours and benefits, and eventually they got it.
Did the propaganda add to the dialogue or detract from it? Red-baiting and persecution saw the forcible arrest, murder and deportation of many American labor leaders. Paranoia ran high, and "conspiracy theories" were relentlessly put forth by the minions of the ruling class. The folks that bought into these frequently took the law into their own hands, often creating a backlash from the labor movement, and tit-for-tat violence was common. While it could be argued that it was a responsible act to put information about the motives of the labor movement into the public sphere, the fear-mongering and hyperbole associated with it caused unnecessary harm and confusion. The irony is that what probably defused the labor movement more than any right-wing propaganda sheet ever could was the very prosperity that the workers finally achieved. Once they had something to lose, they had no interest in hard-core left-wing politics.
I couldn't help but equate all of this with the so-called "dominionists" today. Like the labor movement, apparently a few of the leaders of the religious right have visions of a utopia beyond the constraints of Constitution and law, and also like the labor movement, the rank and file largely want no part of it, but they do want a fair shake... they want to be free to practice their religion unmolested and they want their voices heard in the political arena. Like the reactionaries of yore, the secular left speaks of these folks in conspiratorial tones, and accuses them of wanting to expropriate our spiritual and cultural property.
The fear-mongering and hyperbole I see today regarding the "dominionists" is ironic in that it reminds me of the same arguments that were used against the left two or three generations ago... the leaders are anti-democratic, these sorts of people shouldn't have the right to vote, they have no right to bring their issues into the public discussion, they don't respect our values, they want to take things away from us, they should be deported, why don't they just shut up and be grateful, etc etc. Back in the early twentieth century, people used to produce big and fancy charts diagramming how the left-wing labor organizers were going to influence and subvert people (including you and your neighbors) and eventually take over and establish tyranny. Today we see articles by certain members of the secular left about the "dominionists" that describe the same thing...how the "hard-core" will affect the "soft-core" who will convince the "evangelicals" and on and on.
The fact is, few if any traditional religious people would ever consent to an extra-Constitutional society. Like you, we have far too much to lose. Also, like the left back then, we are fragmented into many sub-groups who can scarcely agree on anything anyway. The in-fighting and splintering between the Communists, Socialists and Anarchists was orderly compared to the in-fighting among the religious segments of society today.
The point is, we should try to avoid hyperbole and fear-mongering when discussing or engaging these folks. The most powerful arguments against Communism were calm, rational and well-supported, and they spoke to the listener's self-interest. Likewise we are more likely to win these folks over by calmly engaging them, finding common ground, and when possible, making a place for them in our party.
As a traditional religionist, I find it distressing that the left as a whole is so terribly uncomfortable with religion and religious people. We are marginalized, suspected, and avoided. If we make a mention of something religious, fear and ostracism ensue, with cries of "theocracy" and "tyranny". Sometimes I feel like a Wobblie at a DAR meeting!
Fear is always bad... it clouds our judgement and de-humanizes the "other". It reduces us to our worst instincts. It makes the "other" an object to be reviled, rather than a soul to be embraced. Let's stand up for ourselves as we see fit, but without fear and hate... inshAllah (God willing).