The Bank War

A very good video on Andrew Jackson’s war on the Second Bank of the United States, a classic example of how politics can have a large negative impact on the economic life of the nature.   With the Second Bank of the United States dead, state banks stepped into the breach to take over the lending throughout the nation on large private projects that had mainly been the responsibility of the Second Bank.  Jackson’s policies led directly to the irresponsible printing of paper “money” by state banks, so-called “wild cat money”, and an orgy of speculation and unsound loans.  This was ironic because Jackson always hated paper money, believing that the only sound money was coin in gold and silver.  When the economic bubble caused by the creation of this new “money” collapsed, the panic of 1837 ensued, and the economy would not recover until 1843.  It was the first great depression in American history.  Economic illiteracy and the Presidency are always a bad combination.

Published in: on June 14, 2010 at 5:29 am  Comments (2)  
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  1. Thanks for this one. As I’ve said many a time over at Triple P, I’m a huge Jackson fan but this – along with a couple of other snafus in his career – really was bad. Very timely indeed.

  2. Thank you Pauline. Old Hickory will always have my admiration as a brilliant general. When it came to economics however, he was completely clueless, and proud of his cluelessness.

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