The 32nd president of the United States, despite suffering from polio, and being a paraplegic, lead the United States during a time of worldwide economic depression and a world war. He campaigned against an incumbent, Republican President, Herbert Hoover, winning 57% of the vote and carrying all but 6 states. On top of which, he is the ONLY American president elected to more than two terms, FOUR in fact, earning Franklin Delano Roosevelt the title of Greatest President EVER!
When Roosevelt was inaugurated on March 4th, 1933 the U.S. was in the worst depression in its history. A quarter of the workforce was unemployed, production had fallen by more than half in the four years prior, and over two million US citizens were homeless. To make matters worse, by evening that very night, 32 of the 48 states had closed their banks and The New York Federal Reserve Bank was unable to open the very next day, as huge sums of money had been withdrawn by a panic-stricken United States.
Right out of the gate, in his inaugural address, President Roosevelt blamed the economic crisis on, guess who,… Wall Street bankers. Through their greed and reckless investments they had collapsed the economy. (Imagine that, if you can.) But it went further. Roosevelt realized that the Depression was being compounded by people no longer spending, or investing, their money. Those that did have money, clung to it in desperation, AFRAID that they would be next to go bankrupt. Thus the backdrop of his famous line, “The only thing we have to fear is fear itself.”
To combat this, Roosevelt spearheaded major legislation, beginning with his world-renown New Deal. The New Deal consisted of a variety of programs that historians categorize as “relief, recovery and reform:” relief through government jobs for the unemployed, a recovery plan for the economy, and of course, the reform of the Wall Street banks.
The very next day, following his speech, Congress passed the Emergency Banking Act declaring a “bank holiday” and announced their plan to reopen the banks. Roosevelt knew the first step to recovery was to reestablish American’s confidence in their banks. He then signed one of the most vital pieces of banking regulatory bills ever, the Banking Act of 1933, and with it, the Glass–Steagall Act .
The Glass-Steagall Act, named for its Congressional sponsors, Senator Carter Glass (D) of Virginia, and Representative Henry B. Steagall (D) of Alabama refers to four provisions of the 1933 Banking Act that attempted to separate commercial and investment banking. The acts prohibited any member bank of the Federal Reserve System from being affiliated with a company that engaged principally in “the issue, flotation, underwriting, public sale, or distribution” of securities. It also prohibited any business or person from taking deposits if it was in the business of “issuing, underwriting, selling, or distributing” securities. Simply put, if you are bank that holds people’s money, you are not permitted to make risky investments with that money. If you’re an organization that is in the business of making possible risky investments, you cannot use the faithfully deposited money of the citizens, it must come from investors. This insured that banks holding it’s citizen’s money could not go bankrupt through risky investments. However, years later, in 1995, the new Chairman of the House Banking Committee, Representative James A. Leach (R-IA), introduced a bill called the Gramm-Leach-Bliley Act that would repeal Glass-Steagall, allowing the purse strings of Wall Street to loosen up once again, eventually leading to our current recession.
Throughout his presidency, Roosevelt continually cut the federal budget where he saw “useless commissions and offices,” including a reduction in military spending from $752 million to $531 million. In addition, Roosevelt’s New Deal initiatives that fixed our broken economy and consequently our country, included $3.3 billion of spending through the Public Works Administration to stimulate the economy, the repeal of prohibition which brought in all new tax revenues, and the introduction of payroll taxes to fund the new Social Security program in 1937. And to top this off, during World War II Roosevelt pushed for an even higher income tax rate for individuals and corporations (reaching a marginal tax rate of 91%) as well as a cap on high salaries for executives. In fact, he went as far as to issue Executive Order 9250 (later to be rescinded by Congress) which raised the marginal tax rate for salaries exceeding $25,000 (after tax) to 100%, thereby limiting salaries to $25,000 (which would be in the neighborhood of $350,000 today, and slightly higher than what it takes to join the 1%).
With his expansion of government programs Roosevelt redefined the role of the government in the United States, and through his advocacy of government social programs he was instrumental in redefining liberalism for generations to come, all the while establishing the United States as a leader on the world stage. Reflecting on Roosevelt’s presidency, his biographer, Jean Edward Smith would later state, “He lifted himself from a wheelchair to lift the nation from its knees.”