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Our Economic Vocabulary

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We've had them before, plenty of times. They're nothing new. Each one is totally different, all totally the same. What we have done, though, is change the name. We’ve made it seem more, you know, smoother, not so shocking. Like a gentle hand molding a baby’s pillow. Like a dip in a smooth highway. Like a slight depression, but not an illness.

So out with the dread P-word, which sent fear throughout the land many times in the past. Oh, so many times. Dare we say it aloud? Yes, call it by its real name for once. All together now: Panic!

There, it's out.

What we have now is what we had starting in the golden past as far back as 1819. Panic! Money panic!

Banks stopped lending to pay off huge international debts because we spent too much to purchase Louisiana, and people all over the place were dunning us for the money. Sound familiar? A few years later, in 1837, banks stopped lending again. Different reasons, sort of, same result. Panic!

Then we got serial panics starting in 1857 when the railroad bubble burst. The folks playing with soapsuds in those dear, bygone days, too? And the results, well you know: pop! The railroads did it again in 1873 and again for the grand finale in 1893. Never could make the iron horse pay its way. Still can't. Maybe someday, but we'll save that for now.

Not one of these major devastating events was caused by anything other than the boys with the big dough getting scared silly and sitting on the money. They panic, then the folks panic.

In 1907 a big deal known as the Banker's Panic irrupted. Targeted the source accurately this time for a change, didn’t they? The bankers did it — duh — but they fixed it just fine by leaving us the Federal Reserve as legacy and we thank Grandpa from our bottoms for that one (not).

That show was followed by a Tommy-gun rapid fire series of panics linked together to form what is now known as, softly now, The Great D-word. It became tiresome to say panic. 1930, panic! 1931, panic! 1933 panic! It sounds like financial hiccups. So let's nice it up and call it “depression” – so much calmer than that noisy, ugly P-word. And if it lasts a decade, great.

So here we are again, folks. It's 2009. Banks are getting short of dough. Panic! Don’t lend. Sit on it. The folks will panic, too, next year. What'll we call this one?

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About Robert Magill

  • I don’t know, but history sure repeats itself a lot, doesn’t it?