During The Great Depression, Franklin Delano Roosevelt told Americans that their faith and confidence was key to recovery. Is that the case this time around? Columbia University Provost and historian Alan Brinkley discusses some lessons of past crises.
In March of 1933, a recently inaugurated Franklin Delano Roosevelt addressed anxious Americans who were living through that last great economic crisis. FRANKLIN DELANO ROOSEVELT: I can never be sufficiently grateful to the people for the loyal support that 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 themselves. BROOKE GLADSTONE: This week, both presidential candidates talked about uniting behind a bailout, or, if you prefer, rescue plan. Obama even quoted FDR’s fireside chat. Of course, we have to be careful about drawing too many parallels between that crisis and this one. As historian and Columbia University Provost Alan Brinkley explains, the past is full of parallels and disparities.
For example, when the markets first crashed in 1929, most people were, at least initially, simply captivated by the story. ALAN BRINKLEY: The stock market crash in October ‘29 was a focus of tremendous fascination but not yet a focus of panic, because very few people were affected by it immediately. It took time for the economy to start spiraling downwards more generally.
This time, people have a stronger sense of how important the markets are, and that’s what’s creating so much fear. But there’s also, as in 1929, a lot of resentment focused on Wall Street. BROOKE GLADSTONE: Can the public’s confidence or trust be built by a lame duck president and a Congress and media establishment with dismal approval ratings? ALAN BRINKLEY: I think we're in a unique period at this moment where virtually every institution seems to be disappointing people. So it’s not just the general lack of trust that we're dealing with here. It’s this leadership vacuum.
There really is just no point at which, you know, any major public institutions seem to have a lot of confidence, and that’s a dangerous moment to be in a financial crisis. BROOKE GLADSTONE: Do you know how the public responded to proposed government reforms during the Depression? ALAN BRINKLEY: Once Roosevelt became president, the public responded very positively to almost everything he did, at least for a while, because they were so desperate for a leader, and Franklin Roosevelt was a very forceful leader from the very beginning.
He had perhaps the most power over Congress that any president has ever had, except perhaps during wartime. For two years he basically owned Congress. He could get virtually anything through Congress. BROOKE GLADSTONE: I'm just wondering — the new president that we'll have will be arriving roughly the same time [LAUGHTER] as Roosevelt did. ALAN BRINKLEY: Well, let's hope that things get better before January 20th. But it is certainly possible that the new president will come into office under conditions very similar to the ones that Roosevelt came in.
The day he was inaugurated was a day in which banks were failing all over the United States, and the very first thing he did as president was to call what he called a “bank holiday,” which was a euphemism for shutting down all the banks until they could make sure they were solvent.
I don't think we're going to have bank failures in that way because of the FDIC, which Roosevelt created, but we could have real financial panic in this country at the time of the inauguration if things get much worse. BROOKE GLADSTONE: You know, there’s an argument to be made that people want to trust their government in times of crisis to make a decision that might well be unpopular. Now we have a dangerous trust deficit. Do you think that this is the legacy of a White House crying wolf over weapons of mass destruction in Iraq, echoed in large part by Congress and by the mainstream media? ALAN BRINKLEY: It goes back to the Iraq War, to the Lewinsky scandal, to a whole range of things. But much more damage came from the false arguments, whether knowingly false or not, of the president’s and others about the Iraq War, Katrina. There’s a long litany of points at which trust has been eroded in the last eight years.
BROOKE GLADSTONE: Can you recall another time in American history where there seemed to be so little confidence in our institutions — that is, the White House, the Congress and the media? ALAN BRINKLEY: Not in my lifetime — there’s been no time in which economic confidence has been as shaken as I think it is today. But I think the late '60s was a time in which there was extraordinarily little confidence in leadership for other reasons, which included economic problems, but that wasn't primarily the problem.
The Vietnam War, the instability, crime, scandal, that was probably a low point in popular faith in leadership. But we're probably getting close to that point today. BROOKE GLADSTONE: Thank you very much.
ALAN BRINKLEY: My pleasure. BROOKE GLADSTONE: Alan Brinkley is the provost and a professor of history at Columbia University.