I've been reading a history book on and off over the past 10 months. It's an atlas-based view of world history and covers, at a high-level, much of the modern world's history. It's been quite fascinating and I've enjoyed re-emerging myself in the histories of various countries, renewing my knowledge of past events and learning about new-to-me events in history.
One event I learned about recently struck me as strangely poignant, especially given today's financial crises. Following the War of 1812 there was a brief but dramatic period of economic expansion in the US. People were pushing West-ward and beginning to expand the viable areas of settlement beyond the original 13 colonies. Here's where it gets interesting.
This period saw massive migrations out of the major cities and out towards undeveloped lands. Jobs were in abundance. Real estate was being bought and sold quickly and widespread, un-monitored, non-standard lending practices financed these new entrepreneurs.
In 1819, it all crashing down on them. These predatory lending practices, wild over-speculation on land and new markets coupled with reckless spending caused the economy to collapse in 1819. Banks foreclosed on lands, called in loans and ultimately, collapsed themselves. Unemployment skyrocketed. Prices mushroomed too and many life-savings were lost.
Sound familiar?
Now, I doubt many Americans could tell you about the Panic of 1819. Hell, I didn't know about it until a few days ago and I consider myself educated. However, it seems history has, yet again, repeated itself. Perhaps those that caused this new crisis knew about past economic crashes. Perhaps not. What's important to get out of this though is that greed is ultimate amnesiac. Nothing can make you forget the past than the promise of fast cash in the present and near-future.
The Panic of 1819 has repeated itself in 2008 -- a mere 189 years later. The numbers may be greater this year but the cumulative impact of this crisis is likely being felt on the same scale. Perhaps if we just took a second to learn our history, pay attention to it and not get blinded by omnipresent dollar signs, we could avoid something like this again in the future. I know I'll be paying more attention.
10/08: The Panic of 1819
I've been reading a history book on and off over the past 10 months. It's an atlas-based view of world history and covers, at a high-level, much of the modern world's history. It's been quite fascinating and I've enjoyed re-emerging myself in the histories of various countries, renewing my knowledge of past events and learning about new-to-me events in history.One event I learned about recently struck me as strangely poignant, especially given today's financial crises. Following the War of 1812 there was a brief but dramatic period of economic expansion in the US. People were pushing West-ward and beginning to expand the viable areas of settlement beyond the original 13 colonies. Here's where it gets interesting.
This period saw massive migrations out of the major cities and out towards undeveloped lands. Jobs were in abundance. Real estate was being bought and sold quickly and widespread, un-monitored, non-standard lending practices financed these new entrepreneurs.
In 1819, it all crashing down on them. These predatory lending practices, wild over-speculation on land and new markets coupled with reckless spending caused the economy to collapse in 1819. Banks foreclosed on lands, called in loans and ultimately, collapsed themselves. Unemployment skyrocketed. Prices mushroomed too and many life-savings were lost.
Sound familiar?
Now, I doubt many Americans could tell you about the Panic of 1819. Hell, I didn't know about it until a few days ago and I consider myself educated. However, it seems history has, yet again, repeated itself. Perhaps those that caused this new crisis knew about past economic crashes. Perhaps not. What's important to get out of this though is that greed is ultimate amnesiac. Nothing can make you forget the past than the promise of fast cash in the present and near-future.
The Panic of 1819 has repeated itself in 2008 -- a mere 189 years later. The numbers may be greater this year but the cumulative impact of this crisis is likely being felt on the same scale. Perhaps if we just took a second to learn our history, pay attention to it and not get blinded by omnipresent dollar signs, we could avoid something like this again in the future. I know I'll be paying more attention.
[Jeff]