Monday, March 12, 2018

This Day in History





Out with the old, and in with the new. That's the old on the left, President Herbert Hoover, a short car ride away from losing his job. That's the new on the right, Hoover's replacement, President-elect Franklin Delano Roosevelt.




"Do you, Franklin Delano Roosevelt, solemnly swear..."




"We have nothing...


 ...to fear...


 ...but fear...


 ...itself."

Well, those aren't exactly profiles in courage we see in the above three pictures. So what's going on? Runs on the bank, and I ain't talkin' a jog along side the river. In the three years since the Stock Market Crash of 1929, a few banks had gone insolvent and closed up shop, sometime without giving the depositors their money back because they were...insolvent. When that happens enough times, people begin deciding they'd better take out their money BEFORE the bank closes, which sometimes assures that banks NORMALLY solvent enough not to close...close. This all came to a head about the time Roosevelt took office. So, to stop it happening some more, he and the Congress decided...


...to close ALL of the banks. For four days at least.

How to explain this to a panicked American public?


With the aid of that newfangled invention: the radio. On March 12, 1933, eight days after taking office, the President took to the airwaves:



That did the trick. Fears were calmed, the banks started re-opening the very next day, and the nation began its long climb out of the Great Depression.

All well and good, but I wonder, suppose there had been a different president back then, and suppose there had been Twitter back then? It might have gone something like this...

FAKE NEWS! Regulators are losers. I like Smoot-Hawley. John Steinbeck's wife is ugly. Sad.








12 comments:

  1. Hi, Kirk!

    How right you are, good buddy. My mother (whom you will meet on my blog later this month) loved FDR. Roosevelt was a great and charismatic public speaker. His words calmed an uneasy nation, inspired us and gave us hope for better times ahead. There is currently a leadership crisis in the White House. I can hear him now campaigning against FDR - "Have you seen Eleanor? Why can't she be hot like my wife?-- Sad!"

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    1. Good one, Shady. Wish I had thought of it.

      God knows what Trump would have said about FDR's legs.

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  2. That's why the vast majority of everyone's money is insured, to prevent bank runs that would cripple the economy in a heartbeat

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    1. That's right, Adam, the Federal Deposit Insurance Corp came into existence a few months after the bank holiday. It's now considered part of the New Deal, though it originated in Congress (championed by Representative Henry Steagall of Glass-Steagall fame.) Originally FDR opposed it because he thought it might encourage risky behavior among banks if they knew depositors were insured, but later changed his mind because the larger banking law that it was a part of had other safeguards (safeguards rescinded in the 1990s, but that's another story.)

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  3. Exactly what I was thinking as I read your post. Heaven help us all.

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    1. We may just end up knock, knock, knockin' on Heaven's door, Mitchell.

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  4. As always a great post.

    cheers, parsnip

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  5. I never knew any of that. You always have some interesting tidbits Kirk.

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    1. Thank you, maddie, but I leave a lot out for the sake of brevity. It's Post-it note history.

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  6. I always learn something here x

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  7. It's mutual, John. I learn a lot from your blog.

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