Donald P. Morgan and James Narron — The Final Crisis Chronicle: The Panic of 1907 and the Birth of the Fed

History of economics and finance.

The panic of 1907 was among the most severe we’ve covered in our series and also the most transformative, as it led to the creation of the Federal Reserve System. Also known as the “Knickerbocker Crisis,” the panic of 1907 shares features with the 2007-08 crisis, including “shadow banks” in the form high-flying, less-regulated trusts operating beyond the safety net of the time, and a pivotal “Lehman moment” when Knickerbocker Trust, the second-largest trust in the country, was allowed to fail after J.P. Morgan refused to save it.…

FRBNY — Liberty Street Economics
The Final Crisis Chronicle: The Panic of 1907 and the Birth of the Fed

Donald P. Morgan, assistant vice president in the Federal Reserve Bank of New York’s Research and Statistics Group and James Narron, First Vice President and Chief Operating Officer of the Federal Reserve Bank of Philadelphia

Tony Wikrent — The amazing historical ignorance of US business leaders

....Chester Bowles, a Madison avenue advertising executive who would become governor of Connecticut in 1949, and would serve President Kennedy as Under Secretary of State, then as Ambassador to India.... wrote in a 1946 book, Tomorrow Without Fear, “that prosperity cannot continue unless enough income is being distributed to all of us—farmers and workers as well as businessmen.”

....The plutocrats had had their opportunity, and they had blown it [just prior to the Great Depression]. America had given them everything they desired. The freedom to do whatever they wanted. The power to bend others to their will. And ever-grander fortunes as both incentive and reward. Americ choked on those fortunes. A maldistribution of income and wealth that severe the American economy simply could not swallow.

“Even with the most business-minded administration in our history, even with falling taxes and a government surplus, even with everything that businessmen thought they needed to insure continued prosperity,” Bowles reflected, “we could not duck that basic issue for more than a few tinsel-decorated years.”

Quoted in Sam Pizzigati, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. 

The scourge of neoliberalism

real economics
The amazing historical ignorance of US business leaders

Tony Wikrent

Rob Wile — The True Story Of The Time JP Morgan Saved America From Default By Using An Obscure Coin Loophole

Some fascinating history, which also demonstrates the bind of a gold standard. Nicely illustrated, too.

Business Insider
The True Story Of The Time JP Morgan Saved America From Default By Using An Obscure Coin Loophole
Rob Wile
(ht/ Roger Erickson via email)