Recent commentary from Alan Greenspan suggesting that the current (2009) crisis was a once in 100 years event made me wonder what was the history of such things in the United States.
A lot of Google searching didn't give me much on first look, but it did lead me to Wikipedia yet again for a lot of relevant information:
Near the bottom of that page is a list which includes:
- Panic of 1819 - pervasive USA economic recession w/ bank failures; culmination of U.S.'s 1st boom-to-bust economic cycle
- Panic of 1825 - pervasive British economic recession in which many British banks failed, & Bank of England nearly failed
- Panic of 1837 - pervasive USA economic recession w/ bank failures; a 5 yr. depression ensued.
- Panic of 1857 - pervasive USA economic recession w/ bank failures
- Panic of 1873 - pervasive USA economic recession w/ bank failures; a 4 yr. depression ensued.
- Panic of 1893 - pervasive USA economic recession w/ bank failures
- Panic of 1901 - limited to crashing of the New York Stock Exchange
- Panic of 1907 - pervasive USA economic recession w/ bank failures
None of these were end-of-the-world events although they were largely worse than what we are experiencing right now. None of them had a rock hard solution to "fix it".
The
Panic of 1819 has a list of proposed solutions:
- increase of tariffs (largely proposed by Northern manufacturing interests).
- reduction of tariffs (largely proposed by Southerners, who believed free trade would stimulate the economy and increase demand).
- monetary expansion; i.e., restriction or suspension of specie payment.
- rigid enforcement of specie payment.
- restriction of bank credit.
- direct relief of debtors.
- public works proposals.
- stricter enforcement of anti-usury laws.
The basic solution appears to be patches to hopefully make things better, cross your fingers, and wait. Worse, according to that article means 75% unemployment which means we have a way to go to get that bad.
A minor p.s.: in the Panic of 1839 article a writer says:
Apparently, the economy was able to grow due to price flexibility, a result of minimum union control and no government intervention.
Which is curious to me, because there really weren't any unions at that time. Maybe they mean bank mergers? Or maybe one can't trust Wikipedia?
Thanks for listening...
Jeff
