A Nation of Deadbeats: An Uncommon History of America's Financial Disasters

Abstract

Easy credit supplied by overleveraged lenders, complex financial instruments, a mortgage bonanza, unregulated banks, rising land values, and growing uncertainty—all followed by a cataclysmic bust—is not the story of the 2008 financial crisis but rather the tale of the panic of 1837, in the hands of Scott Reynolds Nelson. A Nation of Deadbeats offers a fresh interpretation of America's past panics viewed through the stories of speculators, funny-money, bad debt, and bad borrowers. As Nelson explains, the United States is a nation of deadbeats. The 2008 financial collapse should have come as no surprise. Nelson's book traces the causes of America's financial panics and also the consequences (often in the form of “crash politics”) that have shaped U.S. history in not-so-obvious ways (p. 32). The gist of his narrative is that consumer debt, frequently fed by foreign lenders using instruments of dubious transparency, piles up and feeds asset bubbles that then burst with disastrous, often-global consequences. The resulting political fallout can change the shape of policy and society for decades. Further, “debt” is no villain here. Borrowing represents optimism in the future, adventurous risk, and, ironically, independence from colonial chains. For Nelson, “defaulters are often dreamers” (p. xiii).