Friday marked the birthday of Franklin D. Roosevelt (FDR), our longest serving president. Born on January 30, 1882, FDR served as president from 1933 to 1945. He was elected president four times. When he took office, America was in the depths of the Great Depression, its worst and longest economic crisis.
It would be hard to overstate the suffering of the Great Depression. Unemployment was 25%, and industrial production fell by more than half. Farm prices fell by over 60%, and millions of people lost their homes. The stock market had declined an unprecedented 89% in three years. On the day FDR took office, 32 of 48 states had closed their banks. It was a national crisis of the greatest magnitude.
The outgoing administration of President Hoover had tried all of the traditional practices to steer the country out of the Depression, but to no avail. FDR knew he would have to throw out the playbook and come up with a game plan never before imagined. It took tremendous courage and there was loud opposition.
In the first 100 days of his presidency, Roosevelt got large-scale and sweeping legislation enacted. It was an economic plan of Relief, Recovery and Reform – he called it the New Deal.
Relief was critical and urgent. Although millions were out of work, unemployment benefits did not yet exist. Millions were homeless, many families lived in shacks. Even more were hungry. The lines for soup kitchens in cities could stretch for blocks. Fear gripped the nation.
Roosevelt’s first steps were to save the banking system, through a series of bank holidays and by getting Congress to pass the Emergency Bank Act – just five days after taking office.
Another relief measure was the Federal Emergency Relief Administration, which provided cash benefits for the unemployed. Also passed was a bill to form the Civilian Conservation Corps (CCC), to employ over 300,000 young men to work on natural resource conservation projects.
Recovery of the economy was needed to stabilize industry and business, begin creating jobs, and start replacing fear with confidence. Roosevelt pushed through legislation such as the Works Progress Administration which put three million people back to work in public construction projects; and the Agricultural Adjustment Act, established to shore-up crop prices for farmers.
The Home Owners Loan Act gave loans to people so they could pay their mortgages. It helped home owners avoid losing their homes and assisted banks from going under. The Tennessee Valley Authority Act led to the building of dams in the Tennessee River valley. The construction of these dams created thousands of jobs, and provided irrigation and cheap hydroelectric power.
FDR also expanded the federal Reconstruction Finance Corporation, to ensure the financing of the banks, railroads, and industry.
Reform was needed to make structural changes to prevent future financial disasters and rebuild trust in our economic system of capitalism. It included the Glass-Steagall Banking Act, separating commercial and investment banking; and the formation of the Federal Deposit Insurance Corporation (FDIC) to protect depositors. The Securities and Exchange Commission (SEC) was put in place to regulate Wall Street and police unscrupulous financial practices.
All of this legislation was enacted within the first 100 days of FDR’s first term. Very impressive. Through it all, Roosevelt gave talks on the radio known as fireside chats. These chats also helped reassure people and reduce fear.
Unemployment insurance was added in 1935. So was Social Security, creating economic security for the elderly and the disabled. Also implemented that year was the Rural Electrification Administration, which brought electricity to rural families; in 1934 less than 10% of farms had power, by 1950 more than 90% did. Later on came the minimum wage.
During FDR’s second term, 1937-1940, America was slowly digging out of its economic hole. Within five years of taking office, unemployment had been cut in half, and confidence was being restored. While not all the New Deal programs were successful, Roosevelt said that action was the key. FDR believed that action, even when not effective, raised hope and strengthened faith in government.
FDR’s focus shifted to World War II during his third term, 1941-1944. He led the country to victory in the largest war in world history. The build-up of America’s military industry and its armed forces led to full economic recovery, finishing the job started by the New Deal.
Shortly after being elected to a fourth term, FDR died in April 1945 as WWII was ending.
Most of our country’s great accomplishments have come from Presidents who were true leaders and not afraid to act. During the Revolutionary War, George Washington defeated the strongest military in the world without much direction or financial support from Congress. Lincoln issued the Emancipation Proclamation despite many in the Senate calling it illegal. Theodore Roosevelt (FDR’s distant cousin) would not have broken up monopolistic corporations and other predatory interests if he had kowtowed to the robber barons.
That’s what made FDR a great leader – the courage to act boldly. Most historians rank FDR among the top three best presidents, for leading the country out of the Great Depression and to victory in World War II. No small feats.
Roosevelt’s rapid expansion of government programs redefined the role of government in the U.S. Because of these actions, several powerful politicians and captains of industry called FDR a socialist, or worse. Having been born and raised in the very upper crust of society, many of the wealthy hated FDR and called him a traitor to his class. But FDR wasn’t bothered by their criticism or hatred, in fact, he reveled in it.
Although Roosevelt used Keynesian economics (deficit spending and no tax increases) to lift the country out of the depression, I don’t believe he would have condoned large deficits in a prosperous economy. He didn’t hesitate to raise taxes during WWII when the economy was booming; and despite enlarging the size of government, many of FDR’s programs implemented during the Depression were temporary and no longer exist.
Roosevelt had many admirable attributes. Besides tremendous courage, he demonstrated pragmatism, innovation and initiative time and again, through some of the darkest days of our history. His considerable determination was no doubt forged by his experience overcoming polio at the age of 39 – in the prime of his political career – an experience that would have broken most men.
Not everything he did was brave or right. FDR caved to political pressure early in WWII and forcibly sent Japanese Americans to internment camps. Most of these people were U.S. citizens who were incarcerated with no due process. He could also overreach. In 1937, he unwisely tried to increase the number of Supreme Court justices for political purposes.
Of all of his accomplishments, I believe FDR’s lasting legacy is the establishment of the social safety net, and financial safeguards for the public. The U.S. has had several recessions since Roosevelt was president, but no depressions. Prior to the Great Depression, the country routinely suffered painful, albeit shorter depressions.
The Glass–Steagall Act, FDIC, and SEC gave us the financial protections to ensure stability necessary for a modern economy. Social Security, the minimum wage, and unemployment compensation, provide economic security to all. Both undergird our economy, and promote a civil society.