Return to 
Current Political Economy Issues

Most Sever US Recessions1

1. Unranked Recessions: The Agriculture Eras  

2.  Chronologically 

3.  Ranked Sever Recessions

See COVID-19 Economic Recovery

Relate studies
US Recessions Chronology
Most Severe US Recessions
The Great Recession 3 p study
Great Recession: Historical Perspective
The Business Cycle

Post WW 2 US Economic Adjustments
Post WW2 International Economic Adjustment
Global Economic Growth and the Rise of Populism
Western Civilization Economic History
Post WW 2 Recession Recoveries

Unranked Recessions: The Agricultural Era

1789-93 Copper Panic

1) Lack of good money as copper coins were debased by counterfeiting led to commercial freeze up in several northern States. Hamilton's National Finance System helped for awhile
Panic of 1796-99 1) Land speculation bubble burst 2) Major northern financial panic caused by lack of good money as central bank of England withheld species to minimize their insolvency due to war debts. Many business failed but prosperity continued in the south. President Adams kept us out of European Wars cost the very old sickly man reelection.
1) Export prices fell as  the European war temporarily ended. 2) Trade was disrupted by Barbary pirates which led to the First Barbary War and a slow economy.
Depression of 1807-10 1) English impressments of US sailors during its war with France angered the our nation.
2) President Jefferson responded with the export restricting  Embargo Act of 1807 which paralyzed costal economies and hurt southern farm exports. 
Macon's 1810 Bill Number 2 ended the embargo and started recover.  Eventually US was pulled in with the War of 1812.
Late 1810's 1) Recession with inflation and financial panic followed war expansion was  caused when a slow economy resulted in a real estate collapse.  2) Panic of 1819, the first US major peacetime financial crisis was followed by a general collapse of the American economy. It persisted through 1821. Longest of the 7 early US recession. Could be ranked.

Chronologically Listed

Ranked Recessions

#9 Panic of 1837-45 affected few as most were too poor to use banks.
The first financial panic videos Causes of the 1837 Panic, Panic, Effects
#2 Panic of 1873
called the Long Depression and Great Depression until 1930's.
#3 Panic of 1893-94
first to affect many. Think "Cross of Gold"
#8 Panic of 1907-08
first to need some federal help 1913 brought FED
#4 1921 Recession
Spanish Flew killed 500,000, post WW1 slowdown.
#1 Great Recession 1929-39 as FED failed first big test
#5B 1973-74 Inflation Recession
and less to successful FED action but an 
#5A Early 1980's Recession
which was very difficult. Great Recession 1?
#11A 1991 Quickie Recession
to lower fear of inflation
#11B 2001 Quickie2
ends Dot-com bubble
#7 2007-8 Great Recession Coming after the Great Moderation of the mid 1980's to 2000 and the middle

Ideas The Man Who Knew: The Life and Times of Alan Greenspan 45 min

More Money Than God: Hedge Funds and the Making of a New Elite 58 min    


3. Ranked Recessions   See Niall Ferguson on Financial Crises, Populist Backlashes and the Lessons of History 82 minutes




Federal Counter Cyclical Efforts  
#1 Great Depression 1929-39

Understanding the Great Depression 9 min. basic video

140 months

No federal or state safety net and a Western U.S. drought easily made this #1.

1) Speculative financial and real estate booms were financed with borrowed money and crashed a worldwide stock market and gold-based banking sy2) A brief 1930 recovery was swatted by the Battle of Smoot-Hawley The Economist 12/18/08 3) A strong recovery was reversed in 1937 by the first-time collection of payroll taxes and a cut in work programs.
Recovery Act New Deal
Total cost in 2009 dollars
$840 billion $653 billion
Per capita cost in 2009 dollars
$2,738 $5,231
Cost compared to nation's output
5.7 percent of 2008 output 40 percent of 1929 output
Increase in federal debt*
32 percent from 2008 to 2011 30.3 percent from 1931 to 1939
*As a fraction of gross national product

Source The Recovery Act Of 2009 Vs FDR's New Deal Which Was Bigger



Graph Source

Panic of 1873 called the Long Depression







Unemployment Exceeded 14%.

65 months








Prelude: The Great Chicago Fire and the Equine Flu Epidemic which demobilized or killed nearly every horse in America added to the coming misery. A 1868
 to 1873 RR boom financed by European credit and fostered by US government land grants and RR
subsidies eventually overheated.

1) A 1868-1873 RR boom financed by European
credit and fostered by US government land grants
and RR subsidies would eventually overheat.

2) Greenback Civil War paper currency speculation
had the banking system on shaky ground. 

3) Rampant fraud in the building of the Union Pacific Railway culminated in an 1869 Credit Mobility Panic. Finally a European financial crisis spread to US causing the 1873 failure of the Jay Cooke banking house which was over extended because of Northern Pacific Railway financing excesses. The resulting stagflation – the combination of high unemployment and high inflation caused a 1879 return of the United States to the gold standard. See Specie Payment Resumption Act. Politically, William Jennings Bryan would soon begin to work for easy money but even his 1896  Cross of Gold speech did not work. Eventually the Great Depression of 1929-39 would change attitudes toward government helping those suffering and modern politics would begin.

Panic of 1893-94 
over 10% for
60 months

Prelude: The 1886 Haymarket Riot began labor's fight for a larger share of company revenue. It continued with the 1892 Homestead Steel Strike in western Pennsylvania which  turned into a ferocious day-long battle between Pinkerton men and townspeople and the 1894 Pullman Strike spread across the nation.

1) RR speculation led to the  Reading Railroad failure and withdrawal of European investment led to a stock/banking collapse. 2) Repeal the Sherman Silver Purchase Act ended easy money. 3) Bank runs followed as foreign investors wanted species. Political instability resulted which increased the Populist Movement because of its Free Silver "cross of gold" platform. See Gold, Deflation and The Panic of 1893


The Spanish Flu epidemic of 1918 killed 500,000 and combined with low postwar demand to worsen the coming misery. 1) After the war troops returned to few jobs 2) tight money to hinder 1919 inflation  3) low agricultural demand from Europe and 4) the First Red Scare caused by labor conflict and many strikes. The result was a short severe recession.   Severe deflation resulted in Real GDP loss of only about 5%.  Many blame the newly formed Federal Reserve for this recession. See The Forgotten Depression of 1920: The Power of Limited Government 6 min video

Early 1980's Recession
 Inflation  13.5%

Unemployment 10.8%

Small 1970's recessions and Inflation provided a difficult prelude to a bigger recession. The Iranian Revolution induced the 1979 energy crisis added to inflationary pressures and induced tight US monetary policy by Carter appointee Paul Volker. A second 1982 recession resulted in some feeling the FED had tighten too much. Medicare and Social Security were not tied to inflation so the elderly were hurt most by stagflation.
1973-74 Inflation Recession




9% Unemployment peak




1973-74 Recession
Earlier social strife provided a difficult prelude. 1) Vietnam war caused federal debt caused inflation and foreigners not wanting the cheapened dollars asked for gold so in 1971 Nixon Shocked  the world by taking the US off its partial gold standard. 2) OPEC limited oil supplies which increased domestic prices 3) Business and unions increased price and wage demands causing inflationary psychology as consumers quickly spent before the value of their money decreased 4) The 1973 collapse of the Bretton Woods monetary system ended WW 2 boom. Recession officially ending in 1975 but the country experienced low economic growth and middle class measured income stagnation until the present day. See Will Stagnate Median Income Hurt Our Children  Question Are 5A and 5B really one recession?

#7 Great Recession 2007-09

10%Unemployment Peak

Lots of Recessions Then Few Recessions
Then The Great Recession
Graph Source

Preface: The strong economy from the  1980's to mid 2000's was called a Great Moderation. It created economic security which enhancing the psychological impact of recession for a nation already suffering from 9/11.
1) Speculative real estate practices and home loan manipulation led first to a housing bubble and then to its collapse. 2) Falling housing-related asset values contributed to a global financial crisis even as oil and food prices soared. 3) Some large US financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, City Bank and AIG crashed. Prompt Government Action added to our Continuing Bailout History which began in 1796. They avoided a pending auto industry crisis, mitigated the financial crisis and led to a fairly quick recovery. Bubbles based on both housing and asset credit meant deep-do-do as they did in 1929-33 but this time the FED, Bush 2 and Obama used knowledge of the Great Depression to avoid a catastrophe. Editor's Note: An extensive Safety Net especially for the elderly and children made comparisons to the Great Recession ludicrous. Dissatisfaction over slow measured economic growth and much unwarranted dissatisfaction concerning middle class well-being has resulted from incorrectly used data.
See FED Caused 2008
US Fiscal Policy Reality and Outlook/ 5/20/16 for up-to-date data,
The Final Crisis Chronicle: The Panic Of 1907 And The Birth Of The Fed
Will Stagnate Median Income Hurt Our Children Credit and crises and the economic shocks of 2016 podcast 40 minute,

Recovery Was Historically Slow Though Not For a Balance Sheet Recession
Econ Talk Podcast Recession, Stagnation, and Monetary Policy EconTalk Podcast 1/9/17
Mark Blyth: After the Financial Crisis: How to Tell the Forest from the Trees 57 min. video
Have Big Banks Gotten Safer?  Brookings' Report Fall 2016

Wages Finally Turned Up

Related Sites 
US Economic Normality 1945-2015     page 2

The Great Recession   3 p version

 Did FED Cause 2008

History of US Banking 1p

Recent Decades Ranked by Problems 2p
How would you rank 2001-10

Action to Stop Recent Recessions, NYT 1p

20th Century Decade Evaluation 10p 


Panic of 1907-08


8% Unemployment

Since the Jackson era banks had been decentralized and were unchecked during economic expansions. A stock manipulation scheme by owners of United Copper stock to corner their stock's market  failed resulting in a 1907run on the  Knickerbocker Trust Company. This set in motion events that would lead to a severe monetary contraction. J.P. Morgan and the US Treasury provide needed species. Some question JP's using pooled funds. See T.R. vs. J.P. The panic led to the Federal Reserve System  as a larger US economy required more government help See Panic of 1907

Panic of 1837-45


  1) Discontinued NY Banks species payments began a seven year recession. 2) Speculative western loans 3) A sharp decline in cotton prices 4) A collapsed land bubble, 5) Restrictive lending policies in Great Britain. Some states suffered more than others and many banks failed. Few Americans had any involvement with banks as savings and loans to buy homes were 100 years in the future.

Panic of 1857-58



Debt financed over expansion fueled by 1848-1857 Gold Rush as excess money set the stage for contraction.
1) Shortage of species money reserves in England caused illegal money creation that led to a panic. It  spread to US
2) The resulting high US interest rates meant less lending. 2) Speculative US Investments related to Agriculture, RR and Land suffered most from higher interest rates. 3) Loss of European cotton demand crippled the southern economy 4) Western land bubble crashed. see
Defensive Suspension and he Panic Of 1857

Early 1990s

7.8% Unemployment
June 1992

Briefly interrupted lengthy Great Moderation peacetime expansion that began in the mid 1980's. Inflation fears led to FED interest rates tightening which did not stop growth until the 1990 oil price shock which added to  the debt accumulation of the late 1980s and growing consumer pessimism combined with the weakened economy.

2001 Recession

6.3% Unemployment


The mid 1980's to late 1990's was the longest period of sustained economic growth in American history. 1)The collapse of the speculative dot-com bubble  caused a  2) fall in business outlays and investments and 9/11were three shocks from which we quickly recovered.  The recession was brief and shallow though a financially inexperienced investing public found the small change difficult.[48]

1Axioms of Severity
   1) Unemployment is severest economic experience 2) Length adds to severity
   3) Safety Net can mute economic effects  4) Other difficulties can enhance the difficulty
   5) Extended prosperity make drop in economic activity more difficult 

2Listed because many had not experienced the affect of a recession coinciding with
  the end of a stock market bubble.

During the early years "...most of the population in the 19th century lived in rural
areas on largely self-sufficient farms, recessions thus had a limited impact.
This gradually changed as the economy became more urbanized and industrialized."

2Name refers more to 1) the slow economic recovery 2) the discovery that measured real wage   growth began to slow due to foreign competition which meant higher wage fringe benefits could   no longer be passed on to consumers.

Psychology of the Business Cycle

Strong economy leads to excessive optimism by investors leads to overconfidence extended boom

Sudden shock caused by a significant bankruptcy, surprising large loss,  a financial scandal involving fraud

panic ensues , investors forced to liquidate into falling markets. banks cut back on loans, freighted deposits withdraw funds, and  foolish investors and lenders suffered substantially

Enough contagions among interbank lending sometimes threaded integrity of ENTIRE system and central banks became involved.



Sources  The 13 Worst US Recessions, Depressions, and Panics
Follow us: @247wallst on Twitter | 247wallst on Facebook
GDP quarterly change from 1947 to the second quarter of 2009.

Most links are to Wiki

2008-2012 = 10.4
Note both the 1970's and 80's were worse, much worse.



2001 7.57 4.742.83 Bush, G.W.
2002 7.37 5.781.59  
2003 8.26 5.992.27  
2004 8.22 5.542.68  
2005 8.48 5.083.39  
2006 7.85 4.613.24  
2007 7.47 4.622.85  
2008 9.65 5.803.85  
2009 8.94 9.28 Obama
2010 11.27  
2011 12.11 8.953.16  
2012 10.15 8.082.07  
2013 8.86 7.401.46  
2014 7.80
2008 9.65
2009 8.94
2010 11.27
2011 12.11
2012 10.15