By Mary Kate Cary, Thomas Jefferson Street blog
Franklin Roosevelt was elected president in November of 1932, and by the time of his Inauguration on March 4, 1933, more than 13 million Americans were unemployed and nearly every bank had closed. Inaugurations were held on March 4 until the 20th Amendment to the Constitution was passed, moving it to January 20. Just a week after being sworn in, he decided to give his first Fireside Chat to explain the banking system to the American public.
From Franklin Roosevelt's first fireside chat, delivered today, March 12, 1933, seventy-six years ago:
I want to talk for a few minutes with the people of the United States about banking — with the comparatively few who understand the mechanics of banking but more particularly with the overwhelming majority who use banks for the making of deposits and the drawing of checks ...
We had a bad banking situation. Some of our bankers had shown themselves either incompetent or dishonest in their handling of the peoples 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. I do not promise you that every bank will be reopened or that individual losses will not be suffered, but there will be no losses that possibly could be avoided; and there would have been more and greater losses had we continued to drift...
It has been wonderful to me to catch the note of confidence from all over the country. I can never be sufficiently grateful to the people for the loyal support they have given me in their acceptance of the judgment that has dictated our course, even though all our processes may not have seemed clear to them.
After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work.
It is your problem no less than it is mine. Together we cannot fail.
Not a crazy idea at all, back then, and maybe even a better one today for President Obama. I'm not suggesting a "fireside chat" a la Jimmy Carter in a cardigan, but a series of one-on-one talks with the American people explaining the crisis and the government's response—as well as a go-get-em confidence builder at the end—might work wonders. It could be aired on television, but available on the White House website, YouTube and on podcasts. People could listen to it whenever they want. He could make his best case for his banking bailout, for the housing proposals, for the IMF loans proposed today, for example, and why we should support these ideas. Republicans could respond with their best case for their ideas.
If you read the entire original transcript, you'll see FDR talks about the 1930s equivalent of "stress tests" for banks, and the crucial role of the Fed. Some things don't change.
One more interesting point: President Roosevelt's first Fireside Chat was broadcast on radio at 10 o'clock at night. That would never work now—everyone wants to watch Jay Leno's new show.
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