Franklin D. Roosevelt Quotes
All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S.
There had been a run on many of the banks with more people wanting to withdraw their funds that there were funds to cover the deposits. Some people began hoarding cash and gold, making the situation even worse. Governors asked President Hoover in 1932 to declare a bank holiday to give the banks a chance to get liquid but he refused. So governors and stat legislatures began passing bank holiday legislation closing many banks. When Roosevelt took office he declared a national banking holiday which provided some relieve but the public felt that there was not enough money to go around and the banks were giving what cash they had to their own officers and directors and largest depositors. It appeared that much cash was disappearing from the banks and there was a suspicion that the banks took what cash they had and paid out the deposits of insiders and rich people, bu putting the cash in the insider’s safety deposit boxes. FDR closed that loophole and the bank holiday lasted for a week, after which time the government could stabilize things and the banks were ordered to reopen.
Franklin D. Roosevelt, 1882-1945, 32nd President of the United States (Democrat, NY), 1933
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4 years after the Great Recession where major banks of America needed government bailouts to prevent failure the Administration and Federal Reserve board wanted to increase the capital requirements to increase the safety of the Banks. Essentially the banks would speculate and gamble with depositors’ money. If their investment paid off, there were large profits and bonuses for the executives. If it did not, they ran out of capital as they had very little of their own at risk. The government bailed them out and the executives got their bonuses anyway. The efforts to make the banks speculate with more of their own money were strongly opposed by the banks and bank executives.
To the modern reader utterances such as this from a Conservative Prime Minister seem astounding. However, the Great Depression existed in Canada as well as the United States, and Franklin Delano Roosevelt was not the only world leader who would reach the conclusion that business and capitalism must be profoundly regulated and the system changed if it was to be saved.
The result was regulation of the banks and the creation of the SEC to regulate the stock market, However, over the years, the regulations were not able to keep up with the sophisticated development of new forms of investments and financial instruments and the financial industry were able to speculate with other people’s money in ways that FDR and his reformers never imagined. Finally, even the regulation that did exist was weakened by the policies of the George W. Bush administration and the combination brought about the Great Recession of 2008 where the profits from excess speculation were privatized and the losses, socialized with the taxpayer and the American worker bearing the brunt while most of the speculators were bailed out and made more money than ever. The Obama administration tried to reform the situation, but was unable to put an end to the legal speculation with other people’s money or of having institutions that were “too big to fail.”
The first of these safeguards was abandoned during the George W. Bush administration and the economic meltdown of 2008 resulted. The Obama administration in 2010 restored some regulation of banks and investment banks.
There are many who would disagree with Presti’s description, while many others have this as a chief complaint. The agency tends to change from administration to administration as to its policies and collection methods. In the decades since this criticism, the agency has changed a good deal. However, there are great differences between IRS practices in different parts of the country, some of which are better than the others. One of the major problems of the IRS is the conflict between collecting taxes that should have been paid and were not and ruining the business or individual that committed the offense by taking current working capital. Congress has NEVER weighed in on this question preferring to let the Civil Servants take the heat.
March 4, 1933 was the date that Franklin Delano Roosevelt had assumed the Presidency from Herbert Hoover and used government to combat the Great Depression whereas Hoover would not take any of these steps as the conservative wing of his party and he regarded anything that government did was “creeping socialism”. Historically, it is useful to recall what steps Roosevelt took that were described as socialism. These include Social Security, Federal Deposit Insurance for bank accounts, aid to farmers, the Civilian Conservation Corps, Regulation of the stock market, regulation of banks and many other things that are key elements of modern capitalism which virtually every capitalistic nations has in one form or another. Long after Truman was out of office, the most conservative elements of the Republican Party have accused every Democratic President of “creeping socialism” when they were actually quite opposed to socialism. Even when their career before their presidency was full of criticisms of socialism and policies that are opposite, as in the case of President Obama, the President has been accused of being a socialist. However, it started with Franklin Delano Roosevelt and Harry S Truman.
The Grammar Curmudgeon
Greenspan accepted this as many other economists and financial regulators did. What they did not take into account was the incredible greed of many of the financial executive who were betting with their customers money, If the bet was right they, the shareholders and the customers all made out very well as they were highly leveraged. If the bet was wrong, the shareholders and customers lost a lot, and the financial executives only made their multimillion dollar salaries and bonuses (Many were actually were guaranteed their bonuses even if they put the company into bankruptcy.) Worse, they earned their money when they made their sales or earnings targets, but when the securities they bought went sour, even if the company had no funds left, the. It was “heads we all win and tails only I win.” The vested interests between the financial company executives, the shareholders, and the clients were divergent, and the customer was at the bottom of the money pole.
The Dodd Frank bill was designed, in the aftermath of the large bank induced meltdown of 2008 and the Great Recession, to regulate the banking industry so that no bank would be “too big to fail”. However, although the bill placed many restrictions on the banks to prevent much of their risky economic behavior, which the banks complained inhibited their growth and profitability. However, the bill did not put any limits on the size of the large banks and their critical proportion of the U. S. Financial System. If a bank was large enough, the government did not dare allow the bank to fail regardless of how profligate the Bank had been with its depositors’ money. So the shareholders made big money from the Bank’s risky behavior if it turned out well, and if not the taxpayers had to bail the banks out, because they were too big to fail without causing much of the rest of the country to also fail. Warren and others wanted a simple solution. Break up the large banks into smaller ones and then if any one of the small units makes poor investments, the bank could fail and other than its shareholders and creditors, the effect would not be so serious that the government could not allow the bank to go into bankruptcy. Mismanaged banks could fail like other mismanaged companies and not take down much or the rest of the country with them. But the banks lobbied to prevent that, and by 2014, 6 years after the taxpayers had to bail out banks that were too big to fail, many of the banks were twice as large as they were when they were already too big to fail.
Franklin Delano Roosevelt, often referred to by his initials FDR, was an American politician who served as the 32nd president of the United States from 1933 until his death in 1945. A member of the Democratic Party, he won a record four presidential elections and became a central figure in world events during the first half of the 20th century. Roosevelt directed the federal government during most of the Great Depression, implementing his New Deal domestic agenda in response to the worst economic crisis in U.S. history. As a dominant leader of his party, he built the New Deal Coalition, which defined modern liberalism in the United States throughout the middle third of the 20th century. His third and fourth terms were dominated by World War II, which ended shortly after he died in office.
