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Roosevelt's Strength Was Communication

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The New York Times

Published: February 9, 2009

In 1933, as today, a new president stepped into the White House, vowing change and decisive action at a time when a banking crisis posed a grave threat to the nation's economy.

The economic morass that confronted President Franklin D. Roosevelt 76 years ago undeniably was deeper and more ominous than the trouble that President Barack Obama is facing. Yet, according to economists and historians, there are some telling similarities and cautionary lessons to be drawn from the experience of the Roosevelt years in the 1930s.

Roosevelt had his triumphs. He stemmed panic and stabilized the banking system with a combination of deposit insurance, government investment in banks, restrictions on banking practices and his "fireside chat" radio addresses, which repeatedly steadied the national mood and bought Roosevelt time to make changes.

Still, even after the government assistance, the surviving banks were shaken and lending remained anemic, much as the nation's banks today are reluctant to make loans again, despite receiving more than $300 billion of taxpayers' money in Round 1 of the federal banking bailout.

The shorthand verdict on Roosevelt, economists and historians say, is that he was an eloquent and masterful politician and an innovator in jobs programs such as the Civilian Conservation Corps and in regulatory steps such as the creation of the Securities and Exchange Commission to police Wall Street. But Roosevelt, they say, although brilliant in many ways, did not have a sure grasp of how to guide the economy as a whole.

"Roosevelt had some successes, but we hope that Obama is going to do better," said Kenneth S. Rogoff, a professor of economics at Harvard. "Otherwise, we're in trouble."

The New York Times

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