Michael McBride

ECON-1740-425-F16
Professor Jeffery Davis
December 15, 2016

History of the American Economy and Me

For me, learning about the History of the American economy has been
extremely eye opening. One thing that I have found is that the concepts
taught and patterns displayed seem to still be relevant in todays world, I will
share a few examples with you. First, is the housing bubble burst in 2008, we
can see similarities in the early and late reading of the course. Then I would
like to share a concept from another class that relates to early western
migration, and especially the California Gold Rush. Lastly, I want to draw
comparisons from earlier American elections to the one that we just had in
2016. With these examples I hope to share not only things that I have
learned, but also how they apply to my life.
As I look at chapter 6, Three Crises and Revolt I cant help but think
of a lot of business practices that have been taking place. The three crises
refer to acts of the British Empire that were looking to take advantage of the
American Colonies. The first was the Stamp Act, that required stamps on
everything from legal documents to playing cards. Second, we have the
Quartering Act and Townsend Duties, where the colonies were forced to pay
for colonial costs. Lastly, was the Tea Act that lead to the infamous Boston
Tea Party. All three crises are examples of exploitation by the dominant

power over the victim. This happened within our lifetime when after the
housing bubble burst in 2008, major banks and corporations received bail
outs while small businesses and individuals were left to fend for themselves.
The banks and companies had connections and relationships to law makers
to ensure that they were left relatively unharmed during the recession.
Again, Wells Fargo was recently fined millions of dollars for deceptive
practices that brought revenue in to the company while harming their
unsuspecting customers; examples of a major power preying on and
exploiting those they are supposed to support.
This pattern showed up again during the Great Depression, with the
mortgage market playing a major role. According to chapter 24: The New
Deal, people who lost their homes or had close friends or family lose a
home were often scarred for a lifetime. During this time balloon mortgages
were very common. They were typically short term, interest only loans that
would require the borrow to pay off the interest payments of a set amount
before any principle could be paid off. Families often could barely afford the
interest payment and were left with no equity in their property. When the
economy took a drastic downward turn, this left many on the streets.
Similarly, the 2008 recession took place in large, due to bad practices. Banks
would often extend loans far beyond what perspective home owners could
actually afford. In both cases, the government had to set up regulations to
help protect borrowers; Roosevelt established the Home Owners Loan
Corporation, and the FDIC has played a major role since the housing bubble

burst in 2008. My wife and I recently bought a home and we were glad to see
that there were things in place to help protect us, but it was still hard for me
to sign the final paperwork. Looking at the New Deal, many at the time
worried that several of these regulations were steering the United States in a
socialist direction. This is a worry that always seems to be present anytime
there is a movement to try and protect the people. In some form or
another, I think we are all thankful that there was a minimum wage
established. I believe there needs to be a balance between capitalist and
social beliefs. If there are no regulations, corporations have proved time and
time again that greed often overpowers what is right. Look at the mortgage
practices during the great depression or our recent recession. But a pure
socialist environment does not foster growth, for example, east v. west
Germany after WWII. Finding the proper balance of freedoms to earn and
protection of the little guys has been a battle since our country began; and
far before that to be honest.
For a moment I would like to step away from politics and into the
classroom, to draw another comparison to what is happing in my life. In
chapter 8 Land and the Early Westward Movement, you learn about many
of the early westward movements and how laws around land ownership
began to shape the country. There were many factors like the northwest
ordinances and later land acts, but I would like to focus on actual migrations
of people, specifically the far west migrations that occurred when gold was
discovered in California. There was a frenzy of westward movement to

capitalize on the Gold Rush. While the actual economic impact was of far less
importance than the southern and northwestern migrations that were
influenced by agriculture, the appeal of striking it rich over doubled
Californias population within 3 years. In my opinion, this gold rush was a
product of groupthink more than the actual prospect of finding wealth in the
goldmines. As I learned in a communication course, groupthink occurs when
a group of people all jump on board with an idea without thinking critically
about the actual outcome. The more people that were California bound, the
more appealing the idea became, even though this reduced your chances of
actually finding a substantial amount of gold.
Moving from groupthink and the gold rush to current events, another
parallel I found was the fighting amongst the democratic and republican
parties and the formation of the other 3rd parties discussed in chapter 15.
With the recent election the nation seems to be more political than it has for
quite some time and what was in the chapter really hit home (at least it has
my attention). Taking advantage of the lack of opposition from Southern
Democrats, a largely Republican congress passed the Homestead Act of
1862. This has happened a number of times when a lack of opposition is
present to provide a counterbalance to an argument. During the same time a
number of smaller political parties formed, like the Grangers or the Populists.
They were focused on representing agricultural movement and the people
working in that industry. Again with the most recent election there was a
battle between major corporations (and the politicians they lobby with) and

those who represent the people. The latter was the very platform that the
Populists ran on, calling themselves the Peoples Party. In the last year or
so you would think that the battle between large corporations and a large
government was a new thing, but clearly it is nearly as old as the country
itself; another example of how this reading helped bring perspective to my
life.
As you can see, learning about the History of the US economy is not
only interesting, but extremely relevant in todays world. It is easy to apply
concepts from the reading, as they are still live and active. From economic
patterns, like the 2008 housing bubble burst to, modern politics, what I have
read and learned is more a part of my life than I realized. I hope to remember
these experiences from early Americans, and use them to help me in my life,
liberty, and the pursuit of happiness.