The FDR Solution: Flashback to the '30s
Posted
Sep 22 2008, 04:51 AM
by
Jon Markman
Rating:
Watching Treasury Secretary Henry Paulson make the rounds of Sunday morning television shows to make his case for applying a trillion dollars' worth of CPR to the U.S. banking system, I was struck by the prosaic quality of his argument. You sure didn’t have the sense that he thought this was any big deal. I mean, it was almost the same tone as you’d hear on a recorded message of the day’s surf forecasts. Wake me when we’ve spent all our money.
The humdrum quality of technocrats like the former Goldman Sachs chief makes me wistful for the days of Franklin Delano Roosevelt. Now there was a guy who was mad as hell about the state of the banking system, and wasn’t going to take it anymore. And could he ever deliver a speech.
FDR’s Inaugural Address in 1933 – in which he excoriated bankers for their greed, selfishness and incompetence -- was his most famous, and you may be amazed to discover how relevant it sounds today. "There must be an end to speculation with other people's money!" he said.
Here are some relevant passages, quoted verbatim. The speech, which largely addressed the banking crisis of 1932-1933, is considered by many historians to be the best by a president in the 20th century. It was delivered at a time when Americans had already been suffering for three years. Pay particular attention to paragraphs four, five and six, where he blasts the "money changers." I have bolded key passages to make them easier to find.
“... This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.
“In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.
“More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.
“Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
“True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.
“The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
“Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.
“Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live. Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now. ...
"And finally, in our progress towards a resumption of work, we require two safeguards against a return of the evils of the old order. There must be a strict supervision of all banking and credits and investments. There must be an end to speculation with other people's money. And there must be provision for an adequate but sound currency."
FDR goes on to call for putting people to work. And then he asks for extraordinary powers, not really a lot different than what Paulson is requesting, strangely enough. You can definitely hear the echo.
“It is to be hoped that the normal balance of Executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure.
“I am prepared under my constitutional duty to recommend the measures that a stricken Nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption.
“But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis—broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.
“For the trust reposed in me I will return the courage and the devotion that befit the time. I can do no less…. We do not distrust the future of essential democracy. The people of the United States have not failed. In their need they have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of the gift I take it.”
What's old is new again, I guess. Now if only our current candidates could speak to these issues with such stirring grace, seriousness and commitment. To learn more about the 1933 Inaugural Address, check out this page at the National Archives. Click here to see the original document. This page contains an video recording. And in this Youtube video, Ted Sorenson, former speechwriter for John F Kennedy, describes why he think political oratory has deteriorated.
