The Tulip Bubble Pops

February 3, 1637:

Tulip mania collapses in the United Provinces (now the Netherlands) as sellers could no longer find buyers for their bulb contracts. Tulip mania or tulipomania (Dutch names include: tulpenmanie, tulpomanie, tulpenwoede, tulpengekte and bollengekte) was a period in the Dutch Golden Age during which contract prices for bulbs of the recently introduced tulip reached extraordinarily high levels and then suddenly collapsed. At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble (or economic bubble), although some researchers have noted that the Kipper- und Wipperzeit episode in 1619–22, a Europe-wide chain of debasement of the metal content of coins to fund warfare, featured mania-like similarities to a bubble. The term "tulip mania" is now often used metaphorically to refer to any large economic bubble (when asset prices deviate from intrinsic values).
The event was popularized in 1841 by the book Extraordinary Popular Delusions and the Madness of Crowds, written by British journalist Charles Mackay. According to Mackay, at one point 12 acres (5 ha) of land were offered for a Semper Augustus bulb. Mackay claims that many such investors were ruined by the fall in prices, and Dutch commerce suffered a severe shock. Although Mackay's book is a classic that is widely reprinted today, his account is contested. Many modern scholars believe that the mania was not as extraordinary as Mackay described, with some arguing that the price changes may not have constituted a bubble.
Research on the tulip mania is difficult because of the limited data from the 1630s—much of which comes from biased and anti-speculative sources.  Although these explanations are not generally accepted, some modern economists have proposed rational explanations, rather than a speculative mania, for the rise and fall in prices. For example, other flowers, such as the hyacinth, also had high prices on the flower's introduction, which then fell dramatically. The high prices may also have been driven by expectations of a parliamentary decree that contracts could be voided for a small cost—thus lowering the risk to buyers.

It's hard to believe, but this is something even dumber than our tech bubble and the housing bubble.  Today was pretty notable in history.  It was the date of the ratification of the 16th amendment, legalizing the federal income tax.  It was also The Day the Music Died.  Obligatory Don McLean song here:



Finally, it is the feast of St. Blaise (who was beaten with iron wool combing cards and beheaded). That's the feast where Catholics get their throats blessed, especially to avoid choking on fish bones. Yeah, I know, that sounds crazy. I remember going up and having the priest push the crossed candles against my throat and recite a prayer. Even weirder, one of my college roommates was in Europe last year, and when he received the blessing, the candles were lit. I've never seen that before.