The Fall of Jacksonian Capitalism
As the Jeffersonian ideal fell once its basis, agriculture, was removed caused the entire system to fall, the Jacksonian philosophy also experienced a crash when what it was based in failed it, as well, leading to not only a financial collapse in 1893, called “The Panic of 1893”, but, more recently, the financial collapse of 2008.
“The subprime mortgage crisis had a number of different causes, the main cause being mortgage brokers lending more frequently to unqualified home owners than in the past…
A factor on top of this was that banks began packaging these loans into bonds, then trading and insuring the newly created mortgage backed securities. With banks earning large sums from these bonds, the demand rose and mortgage brokers continue to lower their standards and push as many mortgages as they could to put them into the hands of the banks…
When the bubble finally burst, everything came crashing down. Homeowners were forced to default, banks — such as Bear Stearns and Lehman Brothers — crumbled, the government bailed out other banks, and the stock market got destroyed. The effects of the bursting housing bubble are still being felt today” (Duronio Worst Collapses para. 30-32).
The Jacksonian philosophy, as stated previously, was focused on manufacturing and on financial institutions like financial markets and banks, but it also taught about the power of the individual and the belief that there must be as little regulation as possible to allow the best to flourish, this, however, becomes the flaw in the Jacksonian philosophy.
The Jacksonian philosophy is one that relies on the best and brightest making their way to the top, but, as Jeffersonian feared, corruption and greed also grows in severely under regulated systems into a “degeneracy in these is a canker which soon eats to the heart of its laws and constitution” (see “The Jeffersonian Ideal” for citation). Once a system becomes unregulated, those who work within it may begin to make riskier and riskier decision and even begin to do illegal and unlawful deals for the stake of profits.
As stated in the previous posts, the Jacksonian’s individualism comes to transform money into a form of differentiating oneself from everyone else and as a way for people to relate to one another as well as a way of attaining products which now can only be accessed by money and wealth. It is this obsession with money that spurns those in the financial institutions and the corporations to engage in this sort of risk-taking with money and with the country’s finances.
And, just as how the Jacksonian arises after the fall of the Jeffersonian during the Great Depression and in Steinbeck’s book, the fall of the Jacksonian in our time has led to a resurgence in the Jeffersonian belief, as evident by the growing movements towards eating as much locally-grown food as possible and the rise of environmentalism affording a new connection with the earth that was lost even during the Joads time, illustrated by the squatting farmers in the dust and the driver of the tractor seated on his metal seat high up in the air. But, The Grapes of Wrath also alludes to the fact that neither philosophy ever really disappears when Rose of Sharon nurses the starving man with her breast milk, illustrating the Jeffersonian ideal of community and agrarianism can still returning and that it will be waiting until the Jacksonian falls once again.
-Duronio, Ben. The Greatest Economic Collapses in History. Business Insider. 3 Jul. 2012. Retrieved 27 Nov. 2012. Online. http://www.businessinsider.com/the-greatest-economic-collapses-in-world-history-2012-7?op=1