1819: America’s First Housing Bubble
[i]With little interest in and even less knowledge of history, the modern American finds anything he considers tragic to be an utterly new crisis of unfathomable proportions and, as befits a great nation, one completely new to mankind’s historical experience. As any patriotic American knows, we ooze uniqueness.
Yet, despite Congressman Barney Frank’s blubbering insistence that our nation’s current financial mess is a “new phenomena,” today’s “housing/credit/confidence crisis” is anything but. Our ancestors had already seen all the broken dreams and ignorant greed surfing high on a wave of paper money and hollow credit – more than once before. The America of 1819 and the financial panic its citizens experienced was only the first of what is America’s true national pastime: speculative mania.
Examining how the men of 1819 responded to the crisis and, most importantly, what the results of their actions were, may give us an idea or two (or none) to help solve the current crisis. Should we solve it – and I have no doubt that we will – then we can write down our own warnings, born of harsh experience, so that generations not yet born may completely ignore them too…[/i]