The credit market grinds to a halt after months of pressure, as illiquid assets clog our financial system. After an investment bank suspends operations in New York—an event experts call the “heaviest failure which ever occurred in the United States”—global economic giants totter on the edge of financial collapse. On both sides of the Atlantic, banking houses appeal to national governments for support. For a time, the Bank of England, the world’s most important central bank, bails out three London-based firms trading in America.
No, you’re not reading last week’s headlines. These events occurred in the 19th century. In fact, the period was known as the Panic of 1837.
“The similarities between the last 9 months of snowballing financial mayhem and the first few months of 1837 should pique the curiosity of all those trying to make sense of these hard times,” says Jessica Lepler, PhD, an assistant professor of history at the University of New Hampshire in Durham.
Back then, newly inaugurated President Martin Van Buren refused to assist Wall Street financiers, and more than 700 banks shut their doors. These suspensions devalued the nation’s currency, and once American money lost its value, the Bank of England allowed the firms it had supported to fail. As the London Times reported, “Such an extent of failure has probably never occurred in the city in the same day.”
After another year of fluctuating prices, a global depression ushered in a decade of poverty, dispossession and exploitation that inspired Karl Marx, among others, to advocate social revolution. Fifty years later, lawyers continued to file suits around the world to settle the panic’s scores.
Managing Your Stress
According to Dr. Lepler, those who try to remain calm and reduce stress can still fall prey to the words pundits and journalists use to describe our current crisis. In a time before economic jargon, the writers of 1837 employed an arsenal of terms that embodied their own doomsday fears: “whirlwind,” “deluge,” “conflagration,” “epidemic” and “revolution.” Over the last 9 months, financial writers have, similarly, evoked images of a “flood” of defaults, “ailing markets” suffering from an “illness” and a “stock market storm.”
With Hurricanes Ike and Katrina, as well as our fears of avian flu and West Nile virus, we’re heavily influenced by words that continue to transform an event felt in our pocketbooks into a physically fatal catastrophe.
The bottom line: Chronic worriers and people gripped by psychological stress are three to four times more likely to be diagnosed with heart problems, and they have a 53% increased risk for high blood pressure and stroke, according to studies.
While worrying about the economy—a situation over which you have no control—is bad for your health, being optimistic may give your heart a boost, notes cardiologist and researcher Jerome E. Granato, MD, medical director of Allegheny General Hospital’s Coronary Care Unit and an assistant professor of medicine at the Drexel College of Medicine in Philadelphia. A recent British study found optimistic people had a 300% lower incidence of death from heart attacks and strokes than their pessimistic counterparts, he says.
Dr. Granato’s new book, Living with Coronary Heart Disease, was released this month. Consider picking up a copy for your organic bookshelf. And if you’re a history buff, check out A Brief History of Panics in the United States.