American System by Henry Clay
- economic nationalism
- protect American interests by using the federal government to help industrialists and their workers
o Protective Tariff of 1816
o Build new roads and canals linking Midwest and Atlantic
o Re-establishment of the National Bank (1816 – 2nd National Bank)
Economic panics resulted from Boom and Bust cycle
- common in capitalism
- Boom – high consumer demand encourages more production
- Bust – when expanded supply exceeds demand
o Must cut back
Three great panics
- 1819, 1837, 1857
- Usually lasted a few years
- Ripple effect