Obama To Bankers: Remember When Creating The FDIC Was Going To Ruin The Economy?

During the President’s address to Wall Street bankers today in New York City, he reminded them that their predecessors had completely flipped out about a bill that passed through Congress way back in 1933. It was, in their view, sure to “not only rob them of their pride of profession but would reduce all U.S. banking to its lowest level.” What was this reform bill?

From the White House:

So, yes, this debate can be contentious. It can be heated. But in the end it serves only to make our country stronger. It has allowed us to adapt and to thrive.

And I read a report recently that I think fairly illustrates this point. It’s from Time Magazine. I’m going to quote: “Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment. A bill just passed… would rivet upon their institutions what they considered a monstrous system… such a system, they felt, would not only rob them of their pride of profession but would reduce all U.S. banking to its lowest level.” That appeared in Time Magazine in June of 1933.

The system that caused so much consternation, so much concern was the Federal Deposit Insurance Corporation, also known as the FDIC, an institution that has successfully secured the deposits of generations of Americans.

What do you think? Does he make a valid point? Or is it apples and oranges?

Remarks by the President on Wall Street Reform [White House]