To limit panic, leaders must offer better information
By JESSICA M. LEPLER | Special to The Washington Post | Published: March 20, 2020
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Panic is spreading in all caps on our smartphones. We are worried about viral contagion, and yet we endlessly scroll down our germ-infested screens, scouring our devices for a cure to our uncertainties. What can you do to protect your family from COVID-19, your assets from the falling market and your democracy from disinformation?
Our search isn’t surprising — and officials need to help us get accurate information. Certainty could calm the panic and eliminate some of the negative byproducts of the pandemic. That’s the lesson from the Panic of 1837, an international financial crisis that thrust the United States into nearly a decade of hard times. Some estimated that 90% of factories closed, and when workingmen earned around 10 cents per hour, losses totaled $6 billion.
But the two-month period of panic might’ve been preventable had people in the United States just had better information. In 1837, mere rumors of anticipated failures caused businesses to actually fail. In 2020, rumors of shortages caused empty shelves in the toilet paper aisle. In both cases, evidence-based information might have saved some backsides.
The Panic of 1837 began when London bankers responded to partisan American financial news by restricting credit to the United States. In Liverpool, this triggered a collapse in the price of cotton, America’s most important export. Yet only the first rumors of these changes arrived in the U.S. before Atlantic winds ceased — keeping ships from U.S. ports and Americans from getting accurate information for weeks.
Knowing only that access to credit had tightened and prices had begun to fall, but not knowing the extent of these changes, Americans panicked. Markets crashed, and banks stopped lending. Creditors dunned debtors and hired lawyers. Debtors did all sorts of panicked-sounding things; they shinned, ran or were “G.T.T.” — Gone to Texas, where absconders fled across the border into a new republic and beyond the reach of the law. Defaulting enslavers sold parents away from their children for cash; merchants committed suicide; workers lost their jobs; food prices soared; and families starved.
And then suddenly, the winds blew the disastrous but decisive information into American ports. The bad news — that cotton prices had collapsed and London bankers had cut off credit to the U.S. — was actually good for minds and markets. The certainty ended people’s panics.
As they calmed down, many wanted to forget their panicked actions. But they couldn’t undo them. Debtors and creditors negotiated settlements, but for the enslaved, the starving and the suicidal, the panic’s damage was already done, triggering seven years of misery. Access to accurate information might have saved families, property and lives.
The United States was not the only place losing lives from the spread of information in early 1837. As Americans panicked over their finances, London buried thousands of influenza victims. In a time before running water and hand soap, the virus spread from desk to desk in the world’s financial center. Many bankers’ clerks died.
The widespread acceptance of germ theory was still in the future, the flu vaccine and Tamiflu further still. People blamed disease on an unhealthy climate and an imbalance in bodily fluids: phlegm, two types of bile and blood. Rather than recommending social distancing or self-quarantine, doctors performed bloodlettings. Few in 1837 suspected that these fluids, especially phlegm droplets, were actually spreading the disease.
Before telegraphs, telephones and text messages, accurate financial information could not travel without clerks’ crucial labor. Sick clerks in England coughed as they penned the loops and lines that conveyed American economic horrors. The news that ended American panic killed the London clerks in the process.
Certainty is the scourge of panic. Amid the calls for flattening the curve and washing our hands, we must demand reliable information from our leaders. You should not need to scroll down your feed to find updates on the spread of the virus or the state of the markets. President Donald Trump should convey accurate information daily, if not more frequently. University presidents and local officials should not leave people wondering whether schools, stores and even the DMV will be closed. If we want to stop panic from becoming depression, we need to know when and how our government will replace lost incomes and extend credit to corporations.
Certainty will cure the many panics of 2020. It will calm our markets and our minds. While the coming weeks and months may still be bad, with accurate knowledge they will be less bad. But while you are waiting for accurate information, you might want to clean your phone.
Jessica M. Lepler is associate professor of history at the University of New Hampshire and author of “The Many Panics of 1837.”