Now that the nation is deep into a financial collapse, at the beginning of a bad recession, and on the edge of what might become a second Great Depression, it is instructive to recall the first depression and the response of ecumenical American Christianity to it.
In the usual rendering of the story of modern theology, the Social Gospel liberals are nearly always treated as naive idealists—because many of them were pacifists—while Reinhold Niebuhr is treated as a hero and realist. But Niebuhr was wrong about the New Deal, and the social gospelers that dominated the Federal Council of Churches were right.
The social gospelers supported the Emergency Banking Act of 1933, which allowed the new Reconstruction Finance Corporation to buy bank equity. (Suddenly that sounds familiar.) Over the next year, the RFC bought over $1 billion of bank stock—about one-third of the capital invested in U.S. banks.