Martin Van Buren inherited a fair old economic mess from his predecessor, Andrew Jackson. Jackson had been notoriously hostile to the very idea of the Federal Bank, seeing it as a way for the East Coast financial elite to hurt the little guy, the "little guy" whose interests he claimed to represent. As such, he refused to renew the charter of the Second Bank of the United States, choosing instead to move federal funds to smaller state banks, which Jackson believed would be more responsive to the needs of farmers and small businessmen, the people who'd helped get him elected.

Unfortunately, Jackson's banking policy turned out to be an unmitigated disaster. Reckless lending by the state banks for the purchase of Western land led to a collapse of large parts of the banking system, not to mention the loss of many businesses, as well as the foreclosure of thousands of acres of land out West. The situation was pretty desperate; what the situation demanded, many thought, was a creative response to this unprecedented financial panic.

Yet it didn't get one, for President Van Buren stuck rigidly to the philosophy of Jackson, and before him of Thomas Jefferson, that the federal government should involve itself as little as possible in the running of the economy. Instead of rising to the occasion and reestablishing the Federal Bank, Van Buren simply moved government funds from the failing state banks to an independent treasury. This measure did little or nothing to alleviate the growing crisis, and economic recovery was slow in coming. It's no surprise, then, that Van Buren wasn't re-elected in 1840.