Fear of Fear Itself

“The only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”
– Franklin D. Roosevelt from his 1933 Inaugural Address

Almost eighty years ago, a newly elected President of the United States, Franklin Delano Roosevelt, took the stage to give his Inaugural Address. The nation was just over 3 years removed from an unprecedented (at that time) stock market and banking system collapse, millions of Americans were unemployed, a precipitous decline in housing had vaporized the wealth of families, foreclosures had skyrocketed and business confidence evaporated. Federal, state and local budgets were under immense pressure as tax revenue declined and markets had lost trust in the currency. Sound familiar? To be sure, the situation then was much more difficult than what we face today. Poor policy choices by the previous Hoover administration are widely believed to have exacerbated an already very bad situation. By the time FDR took office in 1933, the U.S. economy had suffered three straight years of cascading economic decline with real GDP down by 25% over that period. There was an overwhelming malaise hanging over virtually everyone’s expectations for the future. It appeared hopeless.

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