This evening compared to Franklin Roosevelt
June 27, 1936: “What they really complain of is that we seek to take away their power.” March 21, 2009: “... the rest of us can't afford to demonize every investor or entrepreneur who seeks to make a profit.” The Washington Post has available the full text of President Obama’s press conference this evening. Near the end of his remarks, the President said:
Bankers and executives on Wall Street need to realize that enriching themselves on the taxpayers' dime is inexcusable, that the days of outsized rewards and reckless speculation that puts us all at risk have to be over.
Why “have to be over”? Why not “are over”?
At the same time, the rest of us can't afford to demonize every investor or entrepreneur who seeks to make a profit. That drive is what has always fueled our prosperity, and it is what will ultimately get these banks lending and our economy moving once more.
From Franklin Roosevelt’s first fireside chat, “On the Bank Crisis,” Sunday, March 12, 1933
As a result we start tomorrow, Monday, with the opening of banks in the twelve Federal Reserve bank cities -- those banks which on first examination by the Treasury have already been found to be all right. This will be followed on Tuesday by the resumption of all their functions by banks already found to be sound in cities where there are recognized clearing houses. That means about 250 cities of the United States.
Geithner announced that the banks would be evaluated by a stress test on February 11, which is 41 days ago. Roosevelt shut down all the banks that had not already been shut down, examined the largest, and began reopening them just nine days after being sworn in. And, ahem, before there was even an FDIC. (FDR was sworn in March 4, 1933, not in January. The date of inauguration was changed to January 20 in 1933 by the ratification of the Twentieth Amendment.) Back to Roosevelt’s first Fireside Chat:
We had a bad banking situation. Some of our bankers had shown themselves either incompetent or dishonest in their handling of the people's funds. They had used the money entrusted to them in speculations and unwise loans. This was of course not true in the vast majority of our banks but it was true in enough of them to shock the people for a time into a sense of insecurity and to put them into a frame of mind where they did not differentiate, but seemed to assume that the acts of a comparative few had tainted them all. It was the Government's job to straighten out this situation and do it as quickly as possible -- and the job is being performed.
Okay, maybe it’s not fair to compare President Obama’s second press conference, held some two months after taking office, to President Roosevelt’s first Fireside Chat, delivered just eight days after being sworn in. Roosevelt delivered his second Fireside Chat on May 7, 1933, almost exactly two months after taking office. He explained the measures his administration was taking to confront the economic crises, such as creating the Civilian Conservation Corps
First, we are giving opportunity of employment to one-quarter of a million of the unemployed, especially the young men who have dependents, to go into the forestry and flood prevention work. This is a big task because it means feeding, clothing and caring for nearly twice as many men as we have in the regular army itself.
After outlining additional measures, such as establishing a massive program of building public works, and providing immediate financial assistance to states and local governments struggling to provide welfare relief, Roosevelt waded directly into addressing his administration’s direct intervention into the economy, which had shattered the laissez faire of the two decades of Taft, Wilson, Harding, Coolidge and Hoover, and set off the wrong-wing shrieks of "communism" and "socialism" that we still hear today.
We cannot bally-ho ourselves back to prosperity. I am going to be honest at all times with the people of the country. I do not want the people of this country to take the foolish course of letting this improvement come back on another speculative wave. I do not want the people to believe that because of unjustified optimism we can resume the ruinous practice of increasing our crop output and our factory output in the hope that a kind providence will find buyers at high prices. Such a course may bring us immediate and false prosperity but it will be the kind of prosperity that will lead us into another tailspin. It is wholly wrong to call the measure that we have taken Government control of farming, control of industry, and control of transportation. It is rather a partnership between Government and farming and industry and transportation, not partnership in profits, for the profits would still go to the citizens, but rather a partnership in planning and partnership to see that the plans are carried out.
Let me illustrate with an example. Take the cotton goods industry. It is probably true that ninety per cent of the cotton manufacturers would agree to eliminate starvation wages, would agree to stop long hours of employment, would agree to stop child labor, would agree to prevent an overproduction that would result in unsalable surpluses. But, what good is such an agreement if the other ten per cent of cotton manufacturers pay starvation wages, require long hours, employ children in their mills and turn out burdensome surpluses? The unfair ten per cent could produce goods so cheaply that the fair ninety per cent would be compelled to meet the unfair conditions. Here is where government comes in. Government ought to have the right and will have the right, after surveying and planning for an industry to prevent, with the assistance of the overwhelming majority of that industry, unfair practice and to enforce this agreement by the authority of government. The so-called anti-trust laws were intended to prevent the creation of monopolies and to forbid unreasonable profits to those monopolies.
Compare “have to be over” of this evening, with “ought to have the right and will have the right” of that evening 76 years ago. But perhaps I am being unfairly harsh, because, in the back of mind, against which I judge any speech or pronouncement by any public official, are the ringing denunciations of the “economic royalists” Roosevelt delivered to Speech to the Democratic National Convention, in Philadelphia, June 27, 1936:
For too many of us the political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor — other people's lives. For too many of us life was no longer free; liberty no longer real; men could no longer follow the pursuit of happiness.
Against economic tyranny such as this, the American citizen could appeal only to the organized power of government. The collapse of 1929 showed up the despotism for what it was. The election of 1932 was the people's mandate to end it. Under that mandate it is being ended.
The royalists of the economic order have conceded that political freedom was the business of the government, but they have maintained that economic slavery was nobody's business. They granted that the government could protect the citizen in his right to vote, but they denied that the government could do anything to protect the citizen in his right to work and his right to live.
Today we stand committed to the proposition that freedom is no half-and-half affair. If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the market place.
These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power. In vain they seek to hide behind the flag and the Constitution. In their blindness they forget what the flag and the Constitution stand for. Now, as always, they stand for democracy, not tyranny; for freedom, not subjection; and against a dictatorship by mob rule and the over-privileged alike.
June 27, 1936: What they really complain of is that we seek to take away their power.
March 21, 2009: the rest of us can't afford to demonize every investor or entrepreneur who seeks to make a profit.