Franklin Roosevelt And The Great Depression Essay

1071 Words 5 Pages
When he took office in early 1933, Roosevelt had a myriad of problems to address.
Between 13 and 15 million people were unemployed, thousands of banks had gone out of business, and the U.S treasury didn’t have enough money to pay all government workers.29
Nonetheless, FDR stood tall in the face of these adversities, declaring that “the only thing we have to fear is fear itself .”30
Franklin Delano Roosevelt was born on January 30th, 1882, in Hyde Park, New York
He was no stranger to struggle, having been diagnosed with polio in 1921 at the age of 39. He attended Harvard University where he met his wife, Eleanor.31 In 1910, at the age of 28, Roosevelt began his political career as a Democrat in the New York State Senate. He served as chair
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So in 1933, four years after the stock market crashed, Congress passed the Glass-Steagall Act.41 The act required banks to decide whether they would specialize in commercial or investment banking. At the time, overactive involvement in the stock market by commercial banks was considered the main cause for the financial crash. It was also believed by many that banks took on too much risk with their customers ' money: Banks had become greedy, taking huge risks hopping for huge rewards. The act did its job; America didn’t suffer another major economic crash for over 70 years, but not everyone was a supporter of the limitations the GSA imposed on banks. Some argued that allowing banks to diversify enabled them to reduce risk, thus the restrictions could actually make the banking industry more perilous.42 Heeding these arguments, Congress repealed Glass-Steagall Act in November of 1999. This proved to be a mistake. With the GSA repealed, banks were now able to do what they wanted while growing as big as they wanted. Some analysts blame this freedom for the economic crisis of 2008. According to them, banks created fraudulent loans that they sold to their customers in the form of securities. Banks also contributed by providing easy credit on poor collateral, allowing millions to purchase homes they could not afford and fall into debt.43 Though there were many contributing factors to the financial crisis of 2008 it is popular belief that big banks played a large role, functioning as the base of the mortgage pyramid scheme. Similarly to what happened during the Great Depression, the banks had to be bailed out by the government. After the financial crisis of 2007, legislators tried to reinstate the Glass Steagall Act to no avail. There are currently bills pending in Congress that would modify banking

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