If you’ve ever opened a bank account or invested in the stock market, you can thank government for making these everyday investments secure. When did the government get into the business of keeping Wall Street honest and banks sound? During the greatest economic calamity of the past century, the Great Depression of the 1930s. Here’s how the federal government created its regulatory structure, public corporations and banks accepted it, and we have all benefited as a result.
At the start of the Great Depression, 90 percent of farm families had no access to electricity. President Franklin Roosevelt solved the problem with an ingenious system of finance and self-help, and brought modern comforts to millions. We have a similar problem today in large sections of the country that have no high-speed connections to the internet, isolating families and throttling small-town economies. We can thank government for turning on the lights in the 1930s. We’ll need it to step up again a century later.
America is a vast country with large populations on both coasts. Twice in our history, the federal government has stepped forward to connect the coasts: with the building of the transcontinental railroads and, a century later, through the interstate highway system. Both were enormous undertakings that brought economic benefits to all Americans. No private company or collection of companies could have managed either of these tasks on its own. If you’re looking for a textbook case of why we need government, here it is.
In 1934, the federal government replaced a failed system of home finance, which featured short-term loans, with long-term mortgages backed by federal loan guarantees. If you have a 15- 20- or 30-year mortgage, you can thank the federal government for it.