On March 5, 1933, Franklin Delano Roosevelt was inaugurated as President of the United States. And he gave one of the most memorable speeches in history:
"The only thing we have to fear is...fear itself." (h/t to Feanor for the link)
You probably know those words. But you probably don't know their context. And I'm sure you don't know just how applicable they are to us right here, right now.
For FDR was addressing a nation facing exactly the same situation as we face today. If you consider yourself a progressive, if you believe that we are still the party of FDR and the New Deal, then you need to listen to FDR's message.
You probably have an inaccurate view of Herbert Hoover. Originally, yes, he did nothing to respond to the Depression and the banking crisis that washed over America in 1930 and 1931. But by 1932 he actually was taking action, and by late 1932 when the American banking system seemed on the verge of collapse - as it does today - he proposed bold new reforms.
Hoover believed the problem wasn't that Americans were out of work and insolvent, that the 1920s sham economy had left Americans with lots of debt but little wage growth. No, Hoover believed the problem was a crisis of confidence alone. Bail out the bankers, he said, and we would solve everything.
So Hoover asked for and got a big federal bailout of many banks. Just as we've done with Fannie Mae and Freddie Mac and AIG, Hoover created the Reconstruction Finance Corporation to bail out Wall Street. He expected it would end the crisis and restore prosperity.
It did no such thing.
After November 1932 the banking crisis worsened. The rate of bank failures doubled and then it tripled. Hoover reached out to FDR, the president-elect, and asked him to support an expansion of the RFC - but at the expense of a New Deal. Hoover said he'd let FDR assume presidential powers early but only if he promised to not go down a New Deal path.
FDR said no.
Hoover and the press were freaking out about the financial crisis. Doom was forecast in nearly every newspaper and newsreel and radio broadcast during the winter of 1932-33.
But FDR still said no.
FDR didn't panic. He didn't take the first solution offered to him even though the nation was in crisis. He didn't freak out. He didn't act out of fear. He didn't let his reason take flight just because things looked bad. He did not give in to Hoover's version of the shock doctrine.
FDR said no.
He instead said "I'm going to do this the right way."
FDR's solution was progressive. The FDIC. Glass-Steagall. SEC regulations. Wealth taxes. Jobs programs. Everything that wasn't in the Bush-Paulson bailout.
And for 75 years his way worked - until Clinton, Bush and the Republicans broke it.
FDR said no. Even though Americans were afraid for their local bank. Afraid for their savings. Afraid for their jobs. Afraid that the banking crisis was going to lead to total collapse.
So when FDR got up there and addressed America, he was addressing a nation that was rightly afraid it was going to lose everything - their savings, their job, their home. Many Americans had fear - understandable fear.
And it was for THAT reason that FDR said "the only thing we have to fear is...fear itself."
I am certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our people impel. This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory.
He wasn't just speaking high-flown rhetoric to launch the New Deal. He was reassuring Americans during a major financial panic.
Are many of you afraid? Hell yeah you're afraid. Afraid for your 401k. Afraid for your job. Afraid for your mortgage. Afraid for your future.
Lord knows I am. I don't know how I'll pay my student loan debts if I lose the part-time jobs I currently have. No idea how we'll pay the rent. No idea how we'll make ends meet. We have some savings, not much, we'll burn through those real quick. A financial crisis, and the Depression that IS coming, is going to hurt me as much as it'll hurt you.
But I am not afraid. I will not cave in to a right-wing, anti-progressive, Hooverite plan because I am afraid. I am going to do exactly what FDR did when he faced this crisis.
I am going to fight. I will NOT let "nameless, unreasoning, unjustified terror" paralyze me from making efforts to fight for a progressive solution to this crisis.
Because I know that if we act out of panic and fear - if we let Bush and Paulson have their unaccountable, unaffordable, unbelievable plan, then we won't have any money or political opportunity to implement a new New Deal under a President Obama.
This situation is exactly analogous to that FDR faced between November 1932 and March 1933. So why on earth are all you people suggesting we take the Hoover path?
If you're worried about your 401k, do you really mean to tell me the solution is to give Wall Street a temporary bailout that might possibly help save your account for a few months - but force drastic cuts in Medicare? If you're on the verge of retirement, a 401k isn't going to help you if Medicare isn't there.
We need to solve the root problems. This bailout wouldn't have done it.
Instead we need to remember FDR's advice. The only thing to fear is fear itself. There are many good and progressive solutions that we can embrace to handle this current problem without foreclosing the option of a real economic stimulus in January.
Don't let the Republicans scare you into backing a bad deal. If we need to help fix the credit markets we MUST do it right. A bad bailout is worse than no bailout. FDR wasn't cowed into submission. Why should we?