George Bittlingmayer and Thomas W. Hazlett
The Wall Street Journal
The Obama administration's opening policy sprint - massive deficits and bailouts, with sweeping health-care and education reform, plus cap and trade to come - has been likened by the president himself to Franklin D. Roosevelt's famous first 100 days.
But FDR did not launch his New Deal with a program that roiled financial markets. On the contrary, his first step was to stem the banking panic with a national bank holiday (many states had already imposed their own). He closed troubled institutions, injected capital into the healthy ones, and reassured Americans that their deposits would be safe.
His approach met with quick success. The New York Stock Exchange, closed during the bank holiday, opened up 15% on March 15. By July 3, the Dow Jones Industrial Average was 93% above its close on March 3, the day before Inauguration Day in 1933. FDR's fast start, embraced by Wall Street, provided him with early, and crucial, political capital when his agenda later veered left.
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