TIME TO RELEARN THE CONNECTION BETWEEN PROSPERITY AND FREEDOM

Tony Blankley:

There is nothing new under the sun. The United States has endured major financial panics in 1837, 1873, 1893, 1907, 1929, 1933 and now in 2008. Most of these economic events had ideological and political consequences -- as well as the inevitable economic play-outs. And if history is any guide, contrary to the hope of some and the fear of others, this is not the end of capitalism as we have known it.

But it is true that usually, major economic events have had political as well as economic consequences. For instance, the panic of 1893, which in some ways is similar to the current panic, was caused by overbuilding and sloppy financing of the railroads. The 1880s enjoyed dramatic economic expansion, which led to dangerous speculation. Once the railroad bubble burst, there was a run on the banks, a contraction of credit, and European investors demanded gold for payments, which forced the reduction in the value of the dollar.

Unemployment went from 3 percent in 1892 to 18 percent in 1894 -- not returning to single digits (6.5 percent) until.... [Read more]