A phrase used by John Humphrys on Radio 4’s Today Programme (mp3 link), to describe the Fed’s action to bail out the financial markets by backing JP Morgan’s purchase of Bear Stearns. Robert Peston, BBC’s business editor, added “the Federal Reserve … is taking the kind of action to restore confidence and pump money into the financial system that it hasn’t done since the nineteen-thirties.”

While there may be some truth in this, it is worth noting that the significant action in the nineteen-thirties was not taken by the Fed, but rather by Congress and the White House, first with the creation of the Reconstruction Finance Corporation, which Hoover signed into law in January 1932, to bail out banks because the Federal Reserve would not; second with the bank holiday just ended as of this time in 1933, which Roosevelt declared to stanch the bleeding in the system. On this day in 1933, Newton D. Baker, who had been Wilson’s Secretary of War, took to the National Broadcasting System’s airwaves to offer guarded support of this tendency toward executive action:

Everybody agrees to the wisdom of what has been done. At the same time, everybody recognizes that we were able to do this not because out institutions were geared up to make it easy to do but because of the entirely accidental circumstances that a new President had been swept into power by an overwhelming vote and had qualities which enabled him to dramatize his own courage to such an extent that traditional limitations and institutional obstacles were swept away.

We have come now to believe so thoroughly that today’s Federal Reserve has the tools and will do what is necessary that we have not thought much, perhaps, what difference it might make that it is Ben Bernanke, and not the White House, coordinating this emergency effort. Bernanke has had to step beyond the Fed’s traditional ambit, to back up financial institutions he cannot regulate.

Perhaps under the current circumstances, we would much rather the Fed Chairman than the President coordinate this effort. But ultimately addressing it may extend beyond the powers Bernanke wields. What will happen then? Will a lame-duck lassitude permit the kind of collapse that occurred in late 1932-early 1933? Will an energetic president address the disaster with the same vigor and intelligence he brought to Katrina and the war on terror? Stay tuned.