Long Depression
In the United States, economists typically refer to the Long Depression as the Depression of 1873–1879, kicked off by the Panic of 1873, and followed by the Panic of 1893, book-ending the entire period of the wider Long Depression. The National Bureau of Economic Research dates the contraction following the panic as lasting from October 1873 to March 1879. At 65 months, it is the longest-lasting contraction identified by the NBER, eclipsing the Great Depression's 43 months of contraction. In the United States, from 1873 to 1879, 18,000 businesses went bankrupt, including 89 railroads. Ten states and hundreds of banks went bankrupt. Unemployment peaked in 1878, long after the initial financial panic of 1873 had ended. Different sources peg the peak U.S. unemployment rate anywhere from 8.25% to 14%.
History of the United States (1964–1980)
Inflationary pressures led to key shifts in economic policies. Following the Great Depression of the 1930s, recessions—periods of slow economic growth and high unemployment—were viewed as the greatest of economic threats, which could be counteracted by heavy government spending or cutting taxes so that consumers would spend more. In the 1970s, major price increases, particularly for energy, created a strong fear of inflation; as a result, government leaders concentrated more on controlling inflation than on combating recession by limiting spending, resisting tax cuts, and reining in growth in the money supply. The erratic economic programs of the Nixon administration were indicative of a broader national confusion about the prospects for future American prosperity. Nixon and his advisers had a poor understanding of the complexities of the global economy (Henry Kissinger once confessed that economics were mostly a blank spot to him) and all of them belonged to the generation that came of age during the New Deal era and believed strongly in government intervention in the economy. They preferred quick, dirty, short-term fixes to complex economy issues. These underlying problems set the stage for conservative reaction, a more aggressive foreign policy, and a retreat from welfare-based solutions for minorities and the poor that would characterize the subsequent decades.