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Presidential Firepower - How FDR saved capitalism in eight days
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| Contributor | RP |
| Last Edited | RP Oct 24, 2008 09:03pm |
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| Category | Profile |
| News Date | Friday, October 24, 2008 09:35:00 PM UTC0:0 |
| Description | President Bush's vacillating response to the financial crisis has occasioned fond memories of the last president to face a banking catastrophe, Franklin Delano Roosevelt. The comparisons are bound to be invidious. FDR's response to the panic of 1933 represented his finest hour—one of them, at any rate—while Bush's moves exhibit all the surefootedness of a dying animal. Yet FDR's early years should be revisited, not as an exercise in nostalgia or an excuse to bash Bush but as a chance to understand how FDR earned the reputation for sterling leadership that he retains today
Inaugurated in March, he wasted no time in addressing a catastrophe that had come to a head just before he took office. Two days into his presidency, he declared a "bank holiday"—a coy euphemism for temporarily shuttering the nation's chief lending institutions. A few days later, Congress—acting "promptly and patriotically," FDR said—gave him the authority to oversee the banks. Finally, and most critically as far as the public was concerned, Roosevelt went on the air the next week with his first Fireside Chat, opening with the simple words: "My friends, I want to talk for a few minutes with the people of the United States about banking …"
Roosevelt laid out his plan to right the system, with special attention to the concerns of the average depositor—a person he literally imagined, recalling in his mind the builders, farmers, and clerks he knew from New York's Dutchess County. He even anticipated their questions. ("Another question you will ask is this: Why are all the banks not to be reopened at the same time?") He exuded none of the condescension that has long been Bush's trademark—that unearned confidence of the small-time operator who doesn't realize that in the big leagues, not everyone will be charmed by his patter. Instead of salesmanship, Roosevelt confidently insisted that his plan deserved the public's trust.
The reviews were gushing. "Our president took such a dry subject as banking," said Will Rogers, "and made everybody understand it, even the bankers." Years later Raymond Moley, a member of Roosevelt's "Brains Trust," concluded: "Capitalism was saved in eight days." And when the first of the banks reopened, people indeed kept their deposits in—and began putting their mattress money back in as well. The bank holiday was over, but Roosevelt's honeymoon was just beginning. By April 12, 13,000 once-destitute banks were operating again. |
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