So Mr. President What Did You Do During Your Term In Office?

By Miriam B. Medina (Ezine Diamond Level Expert Author)

Topic: Bush Administration vs Obama Administration

"No man will ever bring out of the Presidency the reputation which carries him into it." - Thomas Jefferson

It's coming up on election time once again, and President Obama will soon be seeking his second term. Hard to believe that we're two-thirds of the way through his first term already. One thing history teaches us, especially in regards to politics in this country in the past century, the more things change, the more they stay the same. That has held true in regards to President Obama, who rode into office propelled upon the winds of the promise of "change". While President Obama has done a number of things differently than President Bush, he has done quite a few things the same way. This article will examine the various similarities between Bush and Obama Administration, both good and bad, and the differences between the two Administrations, as well.

Starting with domestic affairs, there are a number of similarities between the policies of the two Administrations, some that will probably surprise you. While you might think that President Obama represents less clandestine method of operating the government that has not been the case. Though he promised his first act would be to shut down Guantanamo Bay, an American base that has been used to "detain" terrorist suspects, a base that operates in a notorious manner in regards to these suspects, Guantanamo Bay remains open and operational. He signed the order, but the detainees are still being held there with no changes to operations likely to happen any time soon.

Believe it or not, Obama also voted in favor of President Bush's wiretapping policies. "The bill provides that wiretaps found illegal by courts at a later date will still be treated as admissible evidence. The bill allows wiretapping to take place without the issuance of warrants. The legislation is a surprising and robust endorsement of President Bush's domestic surveillance policies."

Surprisingly, though President Obama has publicly disagreed with the Bush tax cuts, and though he promised to raise taxes on individuals that made more than $250,000, Obama reversed course and decided that the Bush tax cuts would remain in place until the economy bounces back. Though Obama is open about his desire to raise taxes, and though he is in power, the machine that is the American political system has once again held its course, though to be fair, that will probably change soon. Sometimes it appears that a President's philosophy is pushed to the back of the bus to keep America moving forward, or in this case, to keep it afloat as long as possible.

Another significant similarity comes in regards to the two Administration's actions to help restore the economy. To put things in perspective, Bush was faced with a major challenge because of September 11th, 2001. Since then, opening wars on multiple fronts, the economy at home has suffered, culminating with the bursting of the housing bubble in October 2008 and the subsequent stock market crash. As banks toppled at an alarming rate, the Bush Administration passed the Emergency Economic Stabilization Act of 2008, within hours of its enactment, before the ink on the bill was even dry. This Bill created a $700 million dollar fund for the treasury to use to bail out banks. The public largely disapproved of this bill, but Bush pushed it through anyway, claiming the economy needed this stimulus to survive.

Inheriting a floundering economy, President Obama added his own stimulus worth $787 billion on February 17th, 2010. His administration also bailed out the Detroit auto industry, and again, the nation in general was not happy. Bush bailed out the banks to save the economy, Obama bailed out the auto industry to save the economy. Either way, both Presidents nationalized private businesses in the name of the American economy, much to the chagrin of the American people footing the bill. Some time, to be fair, leaders have to take unpopular stances for the good of the people. It's the toughest thing a leader must do, but as of yet, it has to be proven whether or not these were good moves for the people, but it cannot be argued that they were remarkably similar actions. Another stance that Bush and Obama agreed upon incredulously was the role that the government should play in regards to religion.

Bush has been considered to be a bit too religious, while President Obama has been hammered by the right for ignoring religion, yet they both have equally supported federal funds going to religious based groups and organizations. Two different people, two different personalities, two different viewpoints, yet the same result. The funds continue to roll into powerful religious entities.

The biggest similarity, and perhaps the most frightening, is that, while Bush was considered to help and get help from corporate interests, and while Obama promised and is considered to be cold towards corporate interests, both have treated lobbyists, special interests, and corporate interests with equal reverence. Though it must be said Obama has been harsher on corporations in regards to taxation, both bailed out an industry sector, and both have supported the special interests and the corporate interests that helped get them elected. Bush awarded military and oil special interests with contracts in Iraq and Afghanistan. Obama has certainly rewarded green, friendly corporations and the pharmaceutical industry with his health and climate agenda. Though promising to eliminate special interests altogether, Obama, like many other Presidents, has simply changed them. Though certainly environmental and medical, special interests are inherently better than military special interests, they are still special interest groups and not general interest groups.

On the positive side for both Presidents, they have committed to a safety first foreign policy. Obama, though considered a peace candidate, has sent more troops overseas than Bush, and has engaged in the conflict in Libya, as well. A significant difference exists here even though. Bush declared war on Iraq and invaded Afghanistan in response to the horrid attacks of 9/11. Obama has inherited this conflict, though he's kept many policies in place. Where he has drastically differed is in regards to his views on Muslims and on nuclear proliferation.

Obama has clearly said that America is a friend of peace-loving Muslims around the world while Bush was noncommittal in regards to the Muslim world. Obama's attempt to extend the olive branch to the Muslim world is a stark break from Bush policy. Also, Obama has engaged the Russians on nuclear proliferation talks, even putting the cancellation of an Eastern European missile defense system on the table, much to the chagrin of long-standing American allies NATO. The Bush Administration was strongly in favor of establishing missile defense systems in both the Mid-East and in Europe.

The one real difference between the two is that Obama seems to genuinely want global peace and is willing to give away some defense mechanisms to get a more peaceful coexistence, whereas Bush stressed defense first, and was more conservative in his defensive agenda. Other than that, frankly, these two Presidents, though campaign portraits and promises have stated differently, have pretty much done exactly the same things while in office.

For the ultimate litmus test, just look at the state of the country the last few years of the Bush Administration and the first few years of the Obama Administration. The economy is in the tank. Unemployment is extraordinarily high. We have many of our armed forces in occupational roles. We are involved in a number of different military actions with no clear agenda or exit strategy in sight. The dollar is sagging, and in general, things are tough all over. As I said earlier, the more things "change", the more they stay the same.

Whoever the next President might be, be it Barack Obama or another candidate, let's hope they break from established policy and make things better for all of us, the American people, not just special interests. Change things for the better in real ways that we can see and feel, at the bank, at the store, while paying bills, while looking for jobs and trying to keep our homes, and while paying those ever rising taxes. It would be nice to think that change meant something different, dare I say, even better for the American people for once.

To contact: miriammedina@earthlink.net
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Miriam B. Medina is a Diamond level expert author at Ezinearticles.com

Riding It Out On The Great Financial Roller Coaster - The United States' Early Panics: Pt 4 (b)

Corporations began emptying their profits into the money market, where they received overwhelming returns.
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Education was given preeminence during the twenties. Almost 90 percent of those school aged were enrolled in school. High school education was a must. The nation was spending nearly three billion a year for education, and existing school property was even valued at five billion dollars.

.Prior to United States entry into World War I, there was an apparent need for a greater Merchant Marine. Secretary of the Treasury William Gibbs Mcadoo, during the Wilson Administration, announced a plan to build up the Merchant Marine. Then another plan was suggested, to go out into the open market and buy about forty million dollars worth of ships. He felt that these ships could be used as auxiliaries to our navy in times of war and ships of commerce in times of peace. After much heated debate, it was defeated by Congress. Finally, another new plan was proposed, the government was to go into the business of constructing and operating merchant ships. The Armada was built and steadily grew until the end of the war when the Armada added up to 1966 vessels that were essentially useless to the government.

.After the war, the government found itself in possession of some two thousand merchant ships no longer necessary, but which were built and operated by the government during the war. It would have been better to rent them from private companies. The question was, would these merchant marine ships continue to be maintained by a government enterprise or should they be turned over to private companies and subsidized? The result was that the President and Congress decided to turn the fleet over to private businesses and to subsidize this transaction. The Jones Merchant Marine Act of June 1920 directed the Shipping Board to sell the ships as quickly as they could on easy terms to American owned corporations. A $25 million loan fund was to be lent to American shipping companies. Under the act, shipping companies purchased the war-time ships at extremely low prices. In 1928 Congress passed the Jones-White Act. This act not only restricted the cheap sales of government ships, but it also provided government loans of up to 75 percent of the building expenses of new ships as well as increased subsidies for mail carrying. Under this law, the Merchant Marine would prosper but was adversely affected by the Great depression of the 1930s.

.By 1928, everyone was singing praises to the glory days of America. It was a time when American businessmen and economists felt overly confident, believing that the erratic fluctuations in the business cycle were finally under control. They were not even curious about the terrible sense of foreboding looming over the nation like a black cloud. Little did they know at the time that this would be a rude awakening, a beat down of the "American Dream' for many who were caught unprepared.

.When President Hoover entered his term in office, the first thing he announced at his inauguration was "I have no fears for the future of our country. It is bright with hope."

Later that year, during October 24-28, 1929, the stock market crashed, plunging the nation into one of the worst and longest depressions ever seen in our entire financial history, lasting from the end of 1929 until the outbreak of World War II in 1939. Millions of shares changed hands and billions of dollars in value were lost.

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Riding It Out On The Great Financial Roller Coaster, United State's Early Panics: Part 4 (a)

In this, the final article of a 4 part series examining the history of American financial crises, we'll examine the mother of all financial busts, the Great Depression. In part 3, we detailed the boom of the Roaring Twenties and the introduction of consumer credit, which caused American's to buy many more luxuries than they could actually afford, ultimately helping lead America into the greatest single financial crisis that it has ever known.
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Ready credit also made it easy for speculators who were out to make a quick buck. Real Estate suddenly became an attractive and luring potential. Many believed that the value of land would continue to grow and that whoever would buy property would acquire a large profit when it was sold. The allure of this speculation and the availability of fast credit fanned the flames of the "get rich quick" mentality, enabling these speculators to borrow whatever they needed to put into motion this illusion. Many speculators were drawn to ventures in Florida real estate where the population more than doubled from 1920-1925. They worked quickly and furiously as they built homes, resorts and businesses all over the coastal areas of Southern Florida. Word was getting around quick, and people had money in their pockets to burn. The more they built, the greater the population grew as thousands kept flocking to the resorts and the warmth of sunny Florida. It was an immense multitude growing every minute. Meanwhile, Florida's bureaucrats and bankers assumed a nonchalant position and were quite pleased, enjoying every minute of it. Life was wonderful. They watched their coffers fill up with all sorts of business delights. The success of some of these speculators would recruit others to do the same. The market continued this dance, not realizing that it would soon undergo significant change. The roller coaster ride enjoyably rushes upward toward the peak, then it suddenly plummets into a devastating, brutally quick downward economic plunge.
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According to an article published in the Sun-Sentinel, reference is made to "the Big Blow" of 1926, the most destructive hurricane ever to hit Fort Lauderdale, Dania, Hollywood, Hallandale and most viciously of all, Miami, at least until Hurricane Andrew struck in 1992. As a result of this storm's 150 mile per hour winds, which caused massive destruction and claimed at least 1000 lives, the wild real estate boom collapsed. Though they were previously warned that three tropical storms were building in the Caribbean, the warning fell on deaf ears as they were not familiar with the damage that a massive hurricane could do. Most of the 200,000 people living in the storm's path, lured by the easy money of the property boom, were devastated by the experience. Those that were millionaires the year before became paupers after the ruination caused by the storm and the allure of instant riches.The Federal Reserve System began tightening credit by making loans more expensive. One possible action considered would be to increase the rate of interest at which the banks borrowed from the Federal Reserve. This was not a smart idea, with low-interest rates, Americans could loan money to Europe which they needed badly for economic rehabilitation and development, but they wouldn't allow Europeans to sell them goods to repay the loans, which defaulted in many cases. Why make a loan to an entity that wouldn't be able to pay it back?
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"To supply foreign countries with the dollars needed to purchase American exports, the United States government decided, not sensibly to lower tariffs, but instead to promote cheap money at home, thus stimulating foreign borrowing and checking the gold inflow from abroad."
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However, this would not have affected those that were too far into speculation, willing to borrow at exorbitant rates just enough to keep their whistles wet and to feed the greed that begot their business ventures. They didn't rely on foreign trade and didn't realize that the economy they depended on required the support of foreign trade to stay afloat. These short-sighted people turned to investing in the dangerous, turbulent markets.
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The amount of sales on the New York Stock Exchange soared from 236 million shares in 1923 to about 577 million in 1927. Then in 1928 it went up to 1,125 million.
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To be continued: Part 4 (b)
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To contact: miriammedina@earthlink.net
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Riding It Out On The Great Financial Roller Coaster - The United States' Early Panics: Part 3 (b)

By 1921, Henry Ford was building a million cars a year. "Ford and his two chief rivals, General Motors and the Chrysler Corporation produced four-fifths of all automobiles in this country." Over a period of time there were 23 million cars on the highways.
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The automobile, the real estate boom and the public utility business led this cycle of prosperity.

The auto manufacturers in an attempt to make their vehicles more affordable would provide the consumer a time-payment plan which could also be applied to radios, appliances and furniture. This encouraged and enabled the customer to buy products which they otherwise could not afford. As a result of the availability and growth of consumer credit, sales of goods and services increased. "Installment selling of retailed goods reached a total of $7,000,000,000 in 1929 making available more automobiles, furniture and radios than ever before." Homes were filled with all kinds of consumer goods and garages were filled with new cars.

The radio and the automobile were one of the major consumer products of the 1920s. For many families it was a luxury which they simply felt they could not afford. Without the radio, those who lived in the rural areas, namely farmers, were isolated from all communication from each other and from other parts of the country. As a result of this economic boom, higher wages were paid, higher profits were made, and the items that were considered luxuries before the war were commonly purchased. Now with the purchase of a radio, farm families from even the remotest corners of the country were brought into close daily contact with the rest of the nation. With just a twist of the dial, entertainment, sports, religion, latest news and music could be heard.

Americans were confident during Coolidge's second term in office, especially the middle class who experienced a sense of well-being. Their success was symbolized by material possessions. Consumer credit was making it easy for the American public to buy over time, even when they did not have the money. National advertising flourished in the twenties. These advertisers enticed people to live the abundant life, introducing newer products while encouraging dissatisfaction with useful but antiquated possessions. Their appeal was to evoke an irresistible urge of "Ooooooh... this I must have," so people would spend their money to increase comfort. As long as Americans could count on a steady income and easy credit, this sense of well-being would continue. By the end of the 1920s "nearly half of the American public had purchased automobiles, radios, and other consumer goods such as refrigerators and vacuum cleaners."

In the final part of this 4 part series, we'll examine how the boom of the Roaring Twenties culminated with the greatest financial meltdown of all time, The Great Depression.

Next: Part 4 (a)

To contact: miriammedina@earthlink.net
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Riding It Out On The Great Financial Roller Coaster - The United States' Early Panics: Part 3 (a)

In this, part 3 of a 4 part series examining the tumultuous history of American financial crises, we will examine the boom of the 1920s that led to the Great Depression. In part 2, we examined the Panic of 1819 and the precedent it set for the bigger financial meltdowns that would come.

The Panic of 1929

World War I was finally over. War production had wholly ceased by June 30, 1919. The government lifted the controls it had imposed on the economy during the war and hastened the discharge of soldiers. By Christmas of 1919 the soldiers were finally returning to civilian life. Many of the servicemen coming back from the war expected a hero's welcome and a job, only to find their former jobs in occupied by someone else. These servicemen were previously assured in every way that they would receive fair economic treatment after serving their duty and were rightly bitter.

The stimulus of war contracts bought a high level of profitability for Americans usage. When the 1920s rolled around the economy was in an upswing. The returning veterans found the country in a tremendously prosperous state with a new generation of millionaires and well-to-do's borne from war profits. America belonged to the businessmen. The prestige of all businessmen hinged on the irrefutable prosperity of this era. Harding's slogan "Less government in business, more business in government," was popularized by Will Hays, Republican national chairman. Calvin Coolidge's statement was, "The business of America is business." During this period the Republican Party had installed in the White House three of its Presidential figures: Warren G. Harding (in office 1921-1923), Calvin Coolidge (1923-29) and Herbert C. Hoover (1929-1933). "The differences among the three men reflected three evolutionary stages in the relationship of government to business." Out of the three, Hoover was the best at business and running government.

The country was greater in population, increased by record immigration and more industrialization. The laboring class depended on wages gained largely for their survival and happiness. It was a "Postwar Boom Period." Economic growth created successful business profits. This raised the standard of living for most Americans enabling them to find a better way to improve their situation and to enjoy life.

A speculative boom in farm property made it possible for those who sold their farms to obtain a larger return on their investment. Since the average person during the 1920s often made a lot of money, they had enough spare cash to get involved in speculations and investments in the stock market. A wave of stock speculation was sweeping the nation and everywhere there was riotous wasteful spending and mighty profiteering. The increase of money deposited into saving accounts grew rapidly as did the bulk of depositors.

American businessmen met each year with a smile and swagger as they continued to wallow in their overconfidence as the economy steadily rolled along. They would boast that the turmoil in the nation's financial system, which had dominated everyone's lives over the last century, was now a thing of the past, no longer to be concerned about. In plain words, "Things looked real good through their rose-tinted glasses." Plenty of them even agreed that Providence had been kind to them. Never before would our nation suffer such a serious downward economic spiral as the one resulting from the crash of 1929.

To be continued: Part 3 (b)

To contact: miriammedina@earthlink.net
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Riding It Out On The Great Financial Roller Coaster - The United States' Early Panics: Part 2 (c)

Wall Street has always been the commercial heart of America as well as the heart of Society's wealth. The most expensive parties, and presentations of elegance in New York, Saratoga, and Newport, were connected with stock operations. On Wall Street you would find the most daring and shrewd intellect from around the nation, people who could produce a panic in an instant and shock the world's foundation. It has been remarked that the men who did business on Wall Street prematurely aged and that they died at a comparatively early age. This was not unusual. They lived too fast. Their bodies and minds were taxed too severely to endure. No man could tell one week to the next whether he would be a beggar or a millionaire. While one man made a fortune by a sudden increase in stocks or gold, one thousand were ruined. Even the soundest and most established firms fell with a thud, crashing under the sudden reverses.
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The image of the once powerful, self-confident, rich men walking briskly to and from was replaced by that of nervous, pacing, anguished men as they watched their world crumble. "Once they had palatial mansions on Fifth Avenue and were the favorites of fortune." Now they had no future, no hope. They had fallen never to rise again.

Those who were once bankers, stock brokers and wealthy merchants had suffered staggering losses during the various panics that affected our nation, leaving them thoroughly destitute. Much of their failure was attributed to stock speculations; business deals gone wrong and extravagant lifestyles. Once respected amongst the world of prominent society, there were remarkably few that would offer help or express sympathy for the ruined businessmen and their families. For these men and women who had only known wealth and comfort, the life of poverty was actually an extremely traumatic experience which they looked upon with aversion. Unable to cope with their losses, there were those that suffered nervous breakdowns, heart attacks, or committed suicide, leaving their families financially unprotected and homeless.

Since 1819, the United States has experienced many economic and industrial depressions more extensive and severe than the ones preceding it. Usually these would follow periods of speculation and abnormally inflated values just like 1819. Banks, businesses, manufacturing plants and factories were failing in large numbers. Money was becoming extremely scarce. Farm and home foreclosures were at an all time high. As for unemployment, it was inevitable for millions in the work force.

The fact is, each crisis with its dreadful consequences culminates in "Hard Times" for the American people. After a short or long interval, the country manages to resume its former prosperity, ignoring the lessons of the past. In part 3 of this 4 part series, we'll examine the Roaring Twenties.

Next: Part 3 (a)

To contact: miriammedina@earthlink.net
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Riding It Out On The Great Financial Roller Coaster - The United States' Early Panics: Part 2 (b)

Farmers and land speculators purchased several acres of public land from the federal government, which they were able to purchase on credit. Speculators would buy land as cheaply as possible on credit, inflating the sale price to potential buyers in order to make a profit. Agricultural exports rose to $57 million in 1817 alone, reaching a peak of $63 million in 1818. Benefiting from the boom period, quite commonly, the farmer was a speculator too. He would purchase more land for the sake of a quick profitable sale, adding more to his accumulating bank debts. Bankers were extending credit recklessly, assuming that the upturn would last forever. The banks benefited enormously through capital ventures and risky lending. Stock traders, bankers, and auctioneers all were filling their coffers with the rewards of their risky services.
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Farmers and speculators primarily used the loans to purchase federal land in the American West. When the economic crisis came in 1819, thousands of overextended farmers and laborers found themselves badgered by frantic creditors demanding the repayment of their money. Merchants in the big cities rushed to liquidate assets to pay the debts owed to foreign creditors. They in turn would put the squeeze on smaller merchants and shopkeepers for payment on merchandise that had been purchased on credit. Finally, it was the farmers turn to cough up money that he didn't have. The falling crop prices and shortage of currency was making it impossible for them to repay the banks. This resulted in the loss of their property. Those who had purchased high-priced public land on credit during the boom when cotton and grain prices were high were saddled with a tremendous debt, facing forfeiture of their land to the federal government.
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"Reversions of land to the United States in 1819 totaled 365,000 acres, of which 153,000 were located in the Northwest Territory. The following year, the unpaid balance due on land sales reached more than $21 million, an amount equal to more than one-fifth of the total national debt. Of that amount, $6.6 million was for land in the Northwest. The situation was made more critical by a slump in agricultural prices."

As a result of nonpayment on loans, state-chartered banks began collapsing. The primary difficulty of the 1819 panic was the absence of ready money. In order to secure the items which they needed to survive the farmers and local inhabitants resorted to bartering.

Factory owners in the United States had a difficult time competing with earlier established factories in Europe. Many American people could not afford the factories goods due to the lack of money in circulation. Spurred by economic distress in the wake of the Panic of 1819, wealthy factory owners experiencing monetary difficulties were forced to shut down, leaving skilled craftsmen, mechanics and other artisans without work.

"Fortunes were wiped out in a day, speculative companies that stood everywhere thick as shocks in a wheat field, vanished magically, and shareholders were aghast; suburban lands and city lots that were to return a hundredfold dropped to almost worthlessness." Real estate had depreciated to about half of its value.

During the Panic of 1819, financial hardship was suffered by all groups within the community, though the working group was not as hard-hit as those of great wealth. Accustomed to a life where their earnings were scarcely more than sufficient to provide them a decent existence, they possessed little of considerable value. Nevertheless, their suffering was not in any way less severe. Unable to support themselves and their families or receive assistance from members of their church congregation, friends or relatives, many would become homeless or would go to "Poorhouses" for assistance.

However, those who would stand much more to lose because of these financial crises that occurred over the years were from the wealthy class. Large numbers of families made enormous fortunes from their investments before the war of 1812 and throughout the second half of the 19th century.

This world of prominent people possessing exceptional wealth living in staggering opulence during the boom period was populated by those who inherited their fortunes. Others became wealthy through real estate speculation or investments in transportation and industry. Let's not forget the social ladder climbers who married someone with a title or a fat bank account in order to gain entrance to a highly competitive society. They all had the money and leisure to indulge in conspicuous consumption.

Assuming their rich days would last forever, many of the wealthy families overindulged in the social treadmill. They lived a life of luxurious idleness, spending fortunes annually on expensive dress, entertainment and luxurious homes, living beyond their actual resources to maintain their social profile. These people were devastated by the financial crashes resulting in sudden reverses of fortune. These serious financial storms would ruin many of the best of the city firms as well.

To be continued: Part 2 (c)

To contact: miriammedina@earthlink.net
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Riding It Out On The Great Financial Roller Coaster - The United States' Early Panics: Part 2 (a)

In this 4 part series we will examine the rich history, no pun intended, of financial crises in the United States. In part 1 of this 4 part series, we learned the definitions and terms used to explain financial crises in general. Now we start with one of the most devastating financial crises to ever hit the U.S., the panic of 1819, leading into the Roaring Twenties.

The Panic of 1819

Small-scale family farming dominated America from early 17th century to the end of the 19th century. Prior to acquiring a market-economy status, most farmers managed to raise enough crops to maintain a healthy family. These farmers worked hard and generally did their own strenuous tasks of clearing and preparing their land for cultivation. Though agriculture played a pivotal role in early America, there also existed manufacturing and trading characterized by small-scale family run or one man businesses. The manufacturers were skilled craftsmen and artisans.

By 1807 the foreign trade of the United States was enormous, carried by American ships. The total tonnage of American shipping engaged in this trade was seven hundred thousand tons, and of this tonnage Boston possessed a fair share. Important merchants from Boston, such as the Perkinses, the Sargeants, the Cabots and the Higginsons, ranked high throughout the world thanks to their mercantile skills and their ethical character in regards to their operations. Many of the ship owners, merchants and their associates had amassed immense fortunes during the Napoleonic wars beginning in 1804 as they provided supplies to an embattled Europe.

At President Jefferson's request to Congress, the embargo act of 1807 was passed wherein all U.S. ports were closed to export shipping from the U.S. It also restricted imports from Great Britain. This act created a serious hardship for U.S. farmers as well as on New England and New York mercantile and maritime businesses.

The embargo of 1807 and the War of 1812 created a detrimental impact to our European trade. This curbed the American merchant marine, leaving thousands of sailors without work. New England, which had owned nearly half of the nation's ships, was able to avoid the economic disaster by switching to domestic industries such as cotton mills. Among the first mills established were the Waltham Mills of Francis C. Lowell.

The war conditions of 1812 accelerated the development of domestic manufacturers and commerce. Capitalism was flourishing and the working class grew. Textile factories began to expand to New England, New York and Pennsylvania. The Waltham mill in Massachusetts was the first mill in both the United States and the world. It combined under one roof all the necessary undertakings to convert natural fiber into cloth and it proved to be quite a success.

Many immigrants from Europe, including German craftsmen and artisans, would choose to leave their country on a temporary basis seeking better economic opportunities elsewhere before returning home. However, those that ventured to America prospered economically, thriving in the relatively free American atmosphere of economic experimentation and competitive spirit. They would remain in their adopted country. The Europeans settled in areas where farm land was reasonably priced. Public land sales continued to be controlled by the Federal land offices established throughout the Northwest. After the war of 1812, the "greatest westward migration in the history of the young nation " took place.
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About thirty thousand multi-ethnic immigrants from Europe entered the United States in 1818 alone. The cheap lands in the Ohio territory attracted large numbers of immigrants.

To be continued: Part 2 (b)

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Riding It Out On The Great Financial Roller Coaster - The United States' Early Panics: Pt 1

Panics, depressions or any economic crisis resulting in bankruptcies of companies and individuals, dissolution of banks, and vast unemployment, reducing millions to destitution and beggary is the greatest financial horror of all. Economic meltdowns are not biased, they destroy the wealthy, investors, businessmen and the working class too. Over the centuries, the United States has endured several notable crises such as those in 1815, 1819, 1837, 1857, 1869, 1873, 1893, 1901 and 1907 with the most notable exceptions occurring in 1837, 1893 and 1929. These years were defined as "major depressions because of the depth and duration of the collapse which occurred in American History."
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In this 4 part series, we will detail and examine the roller coaster ride that these disasters have taken the American people on, as well as large parts of the world, over the past few centuries. This roller coaster has often been led at the vanguard by the financial institutions and the tumultuous markets, with the rest of industry and the country's citizenship haplessly following behind. In part 1, we will define and explore just what constitutes a financial crisis, detailing the history of such crises in the following articles.Most of these panics began in New York City at the Stock Exchange and quickly spread across the entire nation, leading to the closing of banks, businesses, mortgage forfeitures and mass unemployment as well.
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Although some attribute these panics to over-expansion and debt, overextended notes and discounts, over investment and falling prices, etc., there is a lot of controversy among economic historians and economists as to the true causes of such economic devastation. In effect, not only did the United States survive each panic and crisis, but it flourished time and time again, with business eventually continuing almost as usual.
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First and foremost it's essential that we understand the different terms that are commonly used to describe the fluctuations of these economic activities.

Depression- A large collapse of the economy that normally follows a period of prosperity, usually accompanied by a financial panic or a crash of the stock market as investors lose confidence and refuses to buy stocks or make loans. This nearly results directly in a staggering level of unemployment. If the economic downturn is short-lived it is referred to as a "recession."

Economic Crisis- This term is based on the economic swings or business cycles that occur during good times and bad times or the alternation of prosperity and hardship. For example, the nation goes through a period of prosperity with tremendous activity in production and commerce as businesses expand and banks extend credit with wild abandon assuming the boom will last forever. Suddenly this prosperity comes to an abrupt paralysis, most often caused by the failure of a leading banking institution, bringing with it the collapse of other financial and commercial businesses. As a result of this paralysis, creditors, to stay afloat, begin to demand immediate reimbursement from their debtors. Since debtors find it next to impossible to meet these demands, a state of anxiety bordering on frenzy dominates. After awhile, businesses begin to revive with renewed excitement, increased pricing, greater activity and growth, thus creating another wave of prosperous activity that thrives until a new economic crisis is once again at hand.

Crisis- Described as a condition of uncertainty or danger, leading to a decisive change. Sometimes these crises are designated as financial, commercial and industrial with varying degrees of intensity. Normally crises are followed by hard times. Some crises that have affected the economic situation of the United States extend themselves to other countries we trade with. Some of these crises were inevitable consequences of the modern methods of doing business. The adoption of new equipment and advanced technology has rendered some portions of capital lost on old technology as useless. Since capital is essential to employment, the waste of it can cause a serious crisis. This brings to mind the panic of 1819.
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In Part 2 of this 4 part series, I would like to reflect on that crisis before proceeding to the roaring twenties that ended with the Great Depression.

To contact: miriammedina@earthlink.net
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