Embargo of 1807 + Current Looming Depression correlation?

**DaGeek** · 10-09-2008, 12:50 PM

Just a question I had about this for any economics or history people. Is it possible that this current massive economic upchucking could result as the Embargo of 1807, where we stopped all trade with France and England, did, which was the incredible strengthening of some weak areas (factories, in that case) in our economy that soon became incredibly prosperous without the previous reliance on other nations? This Embargo threw us into a huge depression because it knocked out our major sources of income, but, in the long-run, created a very strong economy.

Granted, I know we aren't in an Embargo, but could the same economic impacts apply, and, if so, how? I'm quite interested in learning.

**Epaphras** · 10-09-2008, 01:33 PM

The world, as they say, is now flat. That kind of isolationism will not work anymore because American companies can outsource any job that requires an internet hookup such as programming. We are not bound to geography any longer.

So suffice to say, I don't think we're going to see trade restrictions. It's simply too impossible to control these days.

**DaGeek** · 10-09-2008, 01:38 PM

I think you misunderstood me a little bit. My bad, I didn't really clarify well. What I'm asking is, as we saw our economy boom a little while after losing our major income source (trade with England and France) due to focusing elsewhere, is it possible to see something similar happen here after seeing a massive credit freeze, which is, as I understand it, a large part of our economy?

**Epaphras** · 10-09-2008, 02:01 PM

Well, I think we're going to see the housing market pick up again after bargain-hunters start creating some demand and builders start to build more houses to meet the demand, etc.

Our market system runs on credit, and when that dries up, the markets grind to a halt. As a nation we are in a very different place now than we were 200 years ago. Then, we could afford to cut economic ties to England and France because we had an entire continent full of natural resources that could send us to the top during the upcoming industrial revolution. We were literally sitting on a gold mine. We had the best real estate in the world as far as natural resources and space (not to mention defense) is concerned.

We don't have the equivalent of a gold mine we're sitting on right now, unless we want to "Drill, baby, drill" and become a net exporter of oil. But even that won't work since we have the most insatiable appetite for oil in the world.

Think of it this way: 200 years ago we were a college grad living at home with his parents. He can work: he has the knowledge and experience to earn a living wage and live a middle-class life. Cutting ties to his beneficiaries will not result in his demise.

Today, we are a free-loading college drop-out who also lives at home but only because he has nowhere else to go and no way of supporting himself. He would be homeless if his parents cut him off.

**Chrysostom** · 10-09-2008, 03:55 PM

200 years ago the Industrial Revolution was just starting (more in England than America in the time you're looking at). It created massive changes in how economics works.