The End of Another Year!

The end of 2010 is looming near. Many people will be glad to see it go! Hopefully 2011 will be a bit better for everyone…we’ve been waiting long enough.


We’ve been through this before, you know. This country has suffered through 47 recessions since 1790. You’d think we’d learn…but we don’t. They all have the same basic structure. The fat cats get greedy, and the bottom falls out.

Take for instance the recession or Panic, as they have also been called of 1893 . The basic cause, as in the Panic of 1873, was the collapse of railroad overbuilding, which set off a series of bank failures. Some would call it the bursting of the “railroad bubble”. In something we could entitle “The Story Says the Same”, the republicans then blamed the democrats and visa versa. The recovery finally began in 1897 when William McKinley was elected. Confidence was subsequently restored with the Klondike Gold Rush. The economy enjoyed 10 years of rapid growth until…the Panic of 1907.

That panic began when the NYSE fell to close to 50% from the previous year’s peak. Some believe one of the main reasons for this panic was the retraction of market liquidity of NYC banks and the subsequent loss of confidence by its depositors. What was the trigger? Some feel it was the San Francisco earthquake in late 1907, others believe it was a failed attempt in October of 1907 to corner the market on stock of the United Copper Company.

Of course one of the most famous economic failures was the Great Depression of the late 20s and 30s. The trigger was, of course, the stock market crash of 1929. Again, the story remains the same. Banks began to fail, and with an increase in unemployment, there was a general reduction of purchasing across the board. The Smoot- Hawley Tariff created in 1930 to protect American businesses charged such ponderous taxes on imports that it resulted in less trade between the U.S and foreign countries which of course adds insult to injury in an economic downturn.

One other nail in the coffin of Americans during this time was a very untimely drought in the Mississippi River Valley beginning in 1930.

Times began to improve for a couple of reasons. Some believe the economy recovered in large part to Franklin Roosevelt’s “New Deal” which put many unemployed Americans back to work. Others believe the bleeding stopped with the county’s entry into WWII. Whatever it was, we didn’t learn much!

There have been about 12 other recessions of varying degrees since the depression. However, the downturn we are in now, sometimes called the “Great Recession” seems to be hitting as hard for some as it did in the 30s. Another bubble, of the housing type this time led to the problem. While economists insist we came out of it in June of 2009, ask anyone out of work or needlessly suffering WITHOUT any help from the government which gladly accept our tax dollars, and I’d guess they would disagree with that date.

Hopefully, 2011 will bring better days. Hopefully, we’ll have learned something from all of this…if only to watch our nickels and dimes a bit more. Happy New Year!!!