FDR's Fireside Chats

I've been listening to FDR's fireside chats starting with the first one back in 1933, just after he was inaugurated. The first one was about the run on deposits at banks and what his administration was going to do to stop it. Basically he issued Executive Orders under the guise that they were covered under previous legislation. (You think Obama took liberties with EO's, hoo boy, FDR downright abused them.) He had a way of describing his actions as if they were as everyday as having a cup of coffee with breakfast. Also, he would say things that were reassuring, almost condescending:

"I hope you can see from this elemental recital of what your government is doing that there is nothing complex, or radical in the process."

He closed down all the banks and then reopened them in sequence, starting with the largest banks, then the mid-sized banks, then smaller banks.

Here's an excerpt, which contains the phrase, describing pulling all your money out of the bank as "an exceedingly unfashionable pastime."

"It is possible that when the banks resume a very few people who have not recovered from their fear may again begin withdrawals. Let me make it clear that the banks will take care of all needs—and it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime. It needs no prophet to tell you that when the people find that they can get their money -- that they can get it when they want it for all legitimate purposes -- the phantom of fear will soon be laid. People will again be glad to have their money where it will be safely taken care of and where they can use it conveniently at any time. I can assure you that it is safer to keep your money in a reopened bank than under the mattress."

If you get a chance take a listen. It's only 12 minutes long and is fascinating.

Fireside Chat #1, The Banking Crisis
http://millercenter.org/president/fdroosevelt/speeches/speech-3298

 

It is interesting stuff.

To try to stop the run on deposits at banks the Federal Reserve set the interest rate higher in a bid to get people to leave their money in the banks to draw the interest income. Besides the problem that people continued to make withdrawals (in gold, BTW) was the problem that businesses and individuals weren't taking out loans because the interest rate for borrowing was too high. Gold was fixed at $20.67 per ounce.

So what did FDR do? On the advice of one of his gardeners (who also had a degree in Agricultural Economics) he took the U.S. off the gold standard and set the value of gold at $45 an ounce, and lowered interest rates. This stopped the run of withdrawals, since a dollar was worth less than half what it was in gold previously and with lower interest rates businesses started borrowing again. The Great Depression stopped its spiral downward the day FDR took the US off the gold standard.

 

Correction: FDR set the price of gold at $35 an ounce, not $45.

 

From Fireside Chat #5, June 28, 1934.
FDR is a starting to introduce Social Security.

And, finally, the third principle is to use the agencies of government to assist in the establishment of means to provide sound and adequate protection against the vicissitudes of modern life -- in other words, social insurance.
Later in the year I hope to talk with you more fully about these plans. A few timid people, who fear progress, will try to give you new and strange names for what we are doing. Sometimes they will call it " Fascism", sometimes "Communism", sometimes "Regimentation", sometimes "Socialism". But, in so doing, they are trying to make very complex and theoretical something that is really very simple and very practical.

http://millercenter.org/president/fdroosevelt/speeches/speech-3302

 

Yes, it does--when you read the transcript. But when you listen to FDR he sounds so earnest and empathic, almost soothing. Obama never speaks with those qualities.

 

Exactly right. When I listen to these fireside chats I'm struck by the glibness of FDR as he casually talks about central planning of the economy, .i.e setting production quotas for businesses, mandating part time jobs (FDR basically started the minimum wage), setting farm prices, etc. then telling everyone how great it is.

"Never let a crisis go to waste" had to be a philosophy of the FDR years.