There are many similarities between the two crises. Roosevelt's practice in the 1930s provided cautious enlightenment and lessons for the Obama administration. Let's see how Obama learns and uses Steve Lohr's article 1933 today. Just like what happened today, a new American president was appointed to the White House during the crisis and vowed to change the status quo and take decisive measures to save the American economy seriously threatened by the economic crisis. Seventy-six years ago, the economic difficulties faced by F.D. Roosevelt were undoubtedly deeper and more terrible than the current crisis faced by Obama. However, Roosevelt succeeded. He eliminated people's panic and stabilized the banking system. His series of measures, including establishing deposit insurance system, government investing in banks, restricting bank operation, and publishing "fireside chats" on the radio, stabilized national sentiment and finally ushered in the Roosevelt era. However, even if the U.S. government helps, the surviving banks are still in shock, and the loan amount is still very small, just like the current situation of Bank of America: although the bank has obtained more than 300 billion dollars from taxpayers in the first round of rescue plan, it is still unwilling to lend any more. The characteristics of Roosevelt's New Deal. Therefore, the "Roosevelt's New Deal" failed to revive the economy in the 1930s, all because the outbreak of World War II in the 1940s stimulated the American economy to get out of the quagmire. Economists and historians generally evaluate Roosevelt as a persuasive speaker, an outstanding politician and an innovator in employment (such as setting up a public resource protection group) and management (such as setting up the US Securities and Exchange Commission to supervise Wall Street). But at the same time, they think that although Roosevelt has made outstanding achievements in many aspects, he has no clear program on how to guide the whole economic situation. Roosevelt's New Deal is usually regarded as a large-scale application of Keynesian economics: by increasing government expenditure, the economic recession was reversed and employment opportunities were created. Although the projects and aid funds of the New Deal were distributed in various states in the United States, in the 1930s, the total fiscal expenditure was controlled below 20% of the total economic output from the federal government to the state government and then to the local government. At present, the total expenditure of the US government has exceeded 35% of the economy, and the proportion of private sector expenditure is higher to cope with the economic recession. ) In the mid-1930s, the domestic unemployment rate in the United States declined under the influence of Roosevelt's New Deal, but it remained high on the whole. During the period of 10, the average unemployment rate was higher than 17%. 1934, British economist John Maynard Keynes visited the White House, personally introduced his economic thoughts to Roosevelt, and suggested expanding the fiscal deficit. But Roosevelt didn't seem to be moved by it, or didn't understand Keynes's economic thought at all. According to Frances Perkins's memoir, Roosevelt complained to her afterwards: "He just said some long and useless figures. He is more like a mathematician than a political economist. " Keynes left equally disheartened. He told Perkins: "The president should have more knowledge of economics." At the beginning of the recession, the crisis was severe. Economists say that the lesson we can learn from the 1930s is how difficult it is to achieve economic recovery when the economic situation drops sharply to such a deep level as 1933. They said that if quick and effective measures were taken in the early stage of economic recession, the economy could be prevented from falling into a deeper crisis and more people could be prevented from losing their jobs. The advantage of Obama is that he took over the national economy at the beginning of the economic recession, while Roosevelt took office only after the economic crisis reached a certain level. In real terms, 1933 is one third smaller than 1929. Industrial products decreased by 40%, and the unemployment rate surged from 3% in 1929 to 25%. Roosevelt was sworn in on March 4, 1933, when the United States was surrounded by a national banking panic, which made his famous saying spread to this day: "The only thing to fear is fear itself." Roosevelt may not be an economist, but he was an extraordinary crisis manager. On March 12, Roosevelt delivered the first "fireside chats" to the national audience to discuss the banking crisis with the American people. He explained to the public how the bank works in simple and understandable language, telling people that the money deposited in the bank did not stay in the bank, but was lent out. "The bank lends your money to drive the two wheels of industry and agriculture to keep running." He said. A bank run will lead to the rupture of the commercial production chain. He assured the audience: "It is much safer to put money in the reopened bank than under the mattress." He appealed: "We must have confidence and never believe rumors and speculations. Let's unite and drive away fear. " At that time, the audience could only hear Roosevelt emphasize that his package to stabilize the banking system could work. But he does have a strange communication skill, and his language is simple but convincing. On March 15, the stock market reopened after being closed for more than a week. The Dow Jones Industrial Average rose 15% on average, the highest increase in a single day. "Roosevelt was a genius. He used these' fireside chats' to calm people's mood and restore their confidence, "said John S. Gordon, an American writer and economic historian. "Never underestimate the role of psychological power in the economy. We have seen it now. " Roosevelt used this powerful persuasion ability to buy time for his new policy to solve the banking crisis. In addition to the deposit insurance system and the banking bill to control competition and interest rates, Roosevelt also played a great role in the Reconstruction Finance Corporation (RFC) established by 1932. The agency provides loans to troubled banks and confiscates and sells their non-performing assets. After the government was reorganized, many small banks could not continue to operate. 1933, more than 4,000 banks closed down. The institution also bought shares of more than 6,000 banks with a market value of $6,543.8+$300 million. According to today's economic value ratio, the amount of the plan is as high as 200 billion US dollars. This figure is equivalent to the capital injected by the government into banks in the financial rescue plan approved by the US Congress in autumn 2008. Congress and the Bush administration hope that banks will use this money to provide normal loan services to enterprises and consumers again. But worried banks want to keep the money, so the government's assistance to banks has not played much role in the social economy. Expand the fiscal deficit? Roosevelt seems to face the same problem. "But he is more active in assuring the public that banks are safe than just persuading them to lend." Richard Silla, an economic and financial historian at Stern School of Business at new york University, said. "Throughout the 1930 s, the loan amount corresponding to the 1 yuan reserve only accounted for half of the 1920 s level." Sila stressed. Now, the Obama team is planning a series of measures to solve the deadlock faced by the banking industry. These measures include stripping off the non-performing assets backed by mortgage loans in a single corporate bank and nationalizing them in part or in whole after a cheap acquisition. This echo tactic was used by the Bank for Reconstruction in the Roosevelt era. "But today's banking crisis is more complicated and global, so our actions must be bigger than Fuxing Bank Company." Simon Johnson, an economist at MIT's Si Long School of Management, said. Economists believe that the government may be more confident to expand spending beyond the $825 billion economic recovery plan. With the implementation of various measures of Roosevelt's New Deal, the deficit fiscal policy has stepped onto the historical stage of the United States. Looking back now, Roosevelt didn't have enough courage to expand the fiscal deficit in the 1930s. "The lessons of the 1930s and early 1940s show that the US government must play a greater role, not only to end the financial crisis, but also to lead Americans out of recession." Sheila of new york University said: "I believe the Obama team is well aware of this and seems ready to respond accordingly."

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