At a Glance: The Reconstruction Finance Corporation

The resurrection of the Reconstruction Finance Corporation, which drove economic development and national renewal through the Great Depression and World War II, is in many ways the core of the Mission for America — the step that makes all the other steps possible.

In the history of all industrialized economies, social institutions such as public investment banks and planning agencies played critical roles in economic development and nation building. These are necessary to finance and coordinate investments that are too big, risky, or long-term for private capital to accomplish on its own.

The United States has a historical pattern of creating, dismantling, and then scrambling to recreate its public financing and coordination institutions. It is time to recreate them once again. To this end, the Mission for America calls for resurrecting the Reconstruction Finance Corporation (RFC) which transformed the U.S. economy during the Great Depression and World War II. For more than a decade, the RFC was the largest enterprise in the world in terms of outlays and assets. Its mission was to fix systemic problems with and add capacities to the U.S. economy. It was responsible for creating many of America's most important industries and much of our modern infrastructure.

The RFC was a capitalist institution, run by leaders from the private sector serving a public mission. It functioned as a bank, venture capital firm, private equity firm (making publicly beneficial deals), strategic stockpile agency, and frequently improvised outside of those roles.

The RFC's vast expenditures did not take away from other national priorities. The Corporation earned a profit for the U.S. treasury every year it operated, while financing and coordinating a massive expansion of the U.S. industrial and consumer economy. The record of the RFC is an example of how a national economy is not a zero-sum system and can be expanded in a way that benefits all members of a society.

Under the Mission for America, the resurrected RFC will be financed by a mix of federal appropriation, bonds, and perhaps some private capital as well. Structured as a publicly-owned independent corporation, the RFC will be free to participate in any sector of the economy, in any way that is legal, appropriate, and necessary to achieve the goal of building a prosperous and sustainable economy. The RFC will be organized into teams, with each team leading and holding responsibility for one national mission.