Sunday, April 26, 2015

The Importance of Trust

The New Deal was a way to rebuild America, both economically and politically. This happened through many phases. The first phase consisted of getting banks back up on their feet. One might wonder, why was the government so interested in helping banks this way? Well, the answer became pretty apparent as time passed by. It was to build a trust between the government and the people. Often times we witness a government doing so much, but forgetting that it is there to serve the people. If the people, or citizens, of the country are not satisfied, then every action of the government becomes a selfish one, or one with no purpose. It is the people that decide the fate of the country. The government can only guide and discipline, but it cannot control. The government of United States finally realized this, and made immediate effort to fix these ties. They understood that the key to a healthy relationship is trust. When both sides have faith that the other will live up to expectations, they become a lot more comfortable with them, which improves their bond. Also, the Glass-Steagall Act was passed, which prevented banks from investing in the stock market. This was because the stock market was a risk, and banks were taking this risk with money that was not even theirs. How can one trust a bank like that to safely hold their money? The government realized this and decided to take action in order to ensure trust between them and the citizens.