Deja Vu

Together We Cannot Fail

Tags:

Ben Bernanke,

economics,

Federal Reserve,

Franklin D. Roosevelt,

Great Depression,

Washington D.C.

“Fed Chair Says U.S. Economy Needs New Regulatory System,” The Washington Post, July 8, 2008.

The government should create a new system to ensure that major financial firms can fail without creating risks for the larger economy, Federal Reserve Chairman Ben S. Bernanke said today, in a sweeping speech that outlined his views on how regulation of the financial system should be overhauled.

"Congress may wish to consider whether new tools are needed for ensuring an orderly liquidation of a systemically important securities firm that is on the verge of bankruptcy, together with a more formal process for deciding when to use those tools," Bernanke said in a speech in Arlington to the Federal Deposit Insurance Corp.'s forum on mortgage lending for low-income households. A model may be the FDIC's current system for disposing of the assets of failed commercial banks, he said.

“First Fireside Chat,” delivered by Franklin D. Roosevelt, Mar. 12, 1933.
President Roosevelt’s fireside chat on the Great Depression’s banking crisis—the first such “chat” in a series of thirty—came just eight days after his inauguration as America’s thirty-second president. The speech served to explain the whys and wherefores of the Emergency Banking Act (and its mandatory four-day “bank holiday”), which Roosevelt had pushed through Congress on Mar. 5, 1933.

…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.

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. I can even promise you salvation for some at least of the sorely pressed banks. We shall be engaged not merely in reopening sound banks but in the creation of sound banks through reorganization. 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 of 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.

• Email /
• Print /
• Comment now