George W Bush’s proposed $700 billion bailout of Wall Street is the most expensive spending plan America’s ever proposed, in response to the biggest financial crisis since FDR’s New Deal. The Nation looks back at the New Deal and how it contrasts with Bush’s plan.
“This year happens to be the 75th anniversary of the New Deal, a revolution in governmental philosophy that began with the Emergency Banking Act of 1933. That first piece of New Deal legislation was a hurried response to the worst banking crisis in U.S. history–until now.
“President Franklin Delano Roosevelt outlined the problem clearly in his first fireside chat, a week after taking office. “We had a bad banking situation,” Roosevelt said. “Some of our bankers had shown themselves either incompetent or dishonest in the handling of people’s funds. They had used the money entrusted to them in speculations and unwise loans . . . It was the government’s job to straighten out this situation and do it as quickly as possible.”
“President Roosevelt’s banking plan ended the panic. But it did much more than that. In Roosevelt’s words, it “reorganized, simplified, and made more fair and just our monetary system.”
“Compare those aims and that achievement with what the Bush administration proposed. Having championed the free market, small government and deregulation for years, the administration asked taxpayers to assume the costs of Wall Street’s poor investments–while allowing Wall Street to hold on to the good ones. “
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