FDR’s First Inaugural Address

A leader who knew better than to heed the siren’s song of austerity budgeting. Or not:

Hand in hand with this we must frankly recognize the overbalance of population in our industrial centers and, by engaging on a national scale in a redistribution, endeavor to provide a better use of the land for those best fitted for the land. The task can be helped by definite efforts to raise the values of agricultural products and with this the power to purchase the output of our cities. It can be helped by preventing realistically the tragedy of the growing loss through foreclosure of our small homes and our farms. It can be helped by insistence that the Federal, State, and local governments act forthwith on the demand that their cost be drastically reduced. It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character. There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly.

The other interesting thing here is that judging by the President’s rhetoric, his expansionary monetary policy, though highly successful, was based in part on a misunderstanding. The idea espoused here is that if commodity prices were higher, commodity producers could afford to buy more industrial goods, which would decrease urban unemployment. That, however, is an issue of the real value of agricultural products which should have nothing to do with devaluing the dollar. Dollar devaluation worked, by contrast, worked to raise the nominal price of all sorts of products which boosted the economy by reducing real interest rates.