A Look Back

To this very day economists debate the actions, inactions, choices, missed opportunities and risks that President Franklin Roosevelt has become so very famous for 70 years ago. Elected in the midst of a recession, Roosevelt showed the world what his tenure would be like on just the thirtieth day of his presidency when he declared a bank holiday. In late February 1933, Roosevelt closed every bank across the nation, then he told the American citizens via radio that their deposits would be insured by the government. Even though the government had no authority to insure deposits, Americans believed him and the financial crisis subsided. Over the next several years Roosevelt would enact hundreds of initiatives in an attempt to turn the economy around. In hindsight, it is generally agreed that about 25% of initiatives did good, 50% did little or nothing, and 25% actually harmed the economy.

The Bernanke Files believes that 70 years from now, economists will be debating the current economic policies in a similar manner. Enormously expansive and creative monetary policy, $1 Trillion stimulus, health-insurance reform, increased unemployment and other government initiative's helpfulness will be debated.

Fortunetly, though, the debates will never be as famous as the Great Depression debates because of the Great Depression. Ben Bernanke is a Great Depression scholar. Because of his creativeness and guidance, our current crisis is merely a recession. A scary fact is that it could have been a depression. In 70 years, just like Bernanke argues that monetary policy, not government intervention, helped us climb out of the Great Depression, economists will be arguing that it was the Federal Reserve that incurred some of the damage but most of the stabilization in the markets. Because we learned from the Great Depression, great Americans like HenryPaulson, Ben Bernanke and Timothy Geithner will be taken for granted in the 70 years.