Here's How It's Done, Hank: A Parable From a Crisis of a Century Ago.

Washington Post ^ | 9/28/08 | Jean Strouse

[traviskicks]

Watching the Sunday morning talk shows last week, I found myself sympathizing with Henry Paulson. It's not that the Treasury secretary needs me to feel his pain, though he did look completely exhausted and had scarcely any voice left. My concern derived from having "lived" through the Panic of 1907 with J. Pierpont Morgan.

Over the calamitous past couple of weeks, I've heard people ask in despairing jest, "Where's J.P. Morgan now that we really need him?" In today's immense and vastly complex financial markets, no one man could play the role that Morgan played at the beginning of the 20th century, when, by persuasion, fiat, threat, loan and sheer force of character, he managed to stop a full-fledged panic.

[traviskicks]

Capitalists saved the country in 1907, while government destroyed it in 1930. Looks like we haven't studied our history and are now again looking for government to 'save us'.

[traviskicks]

The Fed did not yet exist, and for two decades, Morgan had been acting as the country's unofficial lender of last resort, quietly working to amass reserves and supply capital to the markets in periods of crisis.

Ping

[Harry Wurzbach]

Unfortunately there are no public-spirited individuals on Wall Street. Now we have a creature of Wall Street using the public treasury to save the moneyed class’ arse.

[yldstrk]

Kneeling before Pelosi and begging was a real dumb move

[Tublecane]

“In today’s immense and vastly complex financial markets, no one man could play the role that Morgan played at the beginning of the 20th century”

Of course Morgan exists in today’s economy. He’s Bernanke. The Fed has the power to inject cash into the system when it wants to. Morgan’s lifelong frustration was that he couldn’t create piles of money out of thin air, or at least not fast enough. The creation of the Federal Reserve system answered his prayers.

Unfortunately for the rest of us, the ability to build a financial empire that enriched not only himself but our whol society did not automatically grant Morgan the wisdom to understand economic theory. Individual capitalists never “save” anything; only capitalism does. And Morgan’s dream was not capitalistic. It was merchantilist at worst and Keynesian at best. When we hit a “credit ciris,” what we don’t need is more credit. It is a sign that we need to start saving.

[Harry Wurzbach]

What happens when this isn’t enough and the market hits the crapper?

[traviskicks]

Kneeling before Pelosi and begging was a real dumb move

The government should kneel before the people, not the other way around. Pelosi should be kneeling before the JP Morgan(s) of our modern age. Unfortunately, IMHO, those in government have prevented creation of these private sector powers through their tight control and regulation of the financial markets and the power of government to operate with impunity over economic and tax matters.

[Ilya Mourometz]

There were giants in those days. Morgan was, despite much vilification, one of the great men of American history. To have been around when Teddy was remolding Washington (and the country) and Morgan was creating the modern world would have been something to behold. Their kind has long passed from this world.

[Jim Robinson]

I don’t think anyone’s thought it through that far.

[traviskicks]

Of course Morgan exists in today’s economy. He’s Bernanke.

I'll have to disagree. Bernake is a political hack, well intentioned though he may be, appointed by Politicians to have immense non-deserved, unconstitutional power over us. Morgan achieved his position through his own skill and inginuity by the mutual consent of his fellow citizens. I don't think the two men could be more different, IMO.

[Tublecane]

“I don’t think the two men could be more different, IMO.”

The two are the same in that they are both instruments of credit expansion, which is what the article was adressing. As for the remainder of their biographies, that’s the subject of another article. I was only pointing out that the Federal Reserve System is what Morgan was agitating for those many years: a central bank.

[LomanBill]

>>Their kind has long passed from this world.

That’s the whole point of collectivism. The giants get eaten by the ants.

You will be equal, even if it kills you!

[traviskicks]

From Wikipedia: http://en.wikipedia.org/wiki/J.P._Morgan

Carnegie agreed to sell the business [US Steel] to Morgan for $480 million.[6] The deal was closed without lawyers and without a written contract.

heh heh... no lawyers. :)

[LomanBill]

[Of course Morgan exists in today’s economy. He’s Bernanke]

 

Yep, that was the whole point of that little "Duck Hunting" trip to Jekyll Island in 1910.

 

http://www.google.com/search?hl=en&q=Jekyll+Island+Duck+Hunting&btnG=Google+Search&aq=f&oq=

 

What's going down now, and what went down back then - motivated by the "Panic of 1907" is eerily similar.

 

Soon after the 1907 panic, Congress formed the National Monetary Commission to review banking policies in the United States. The committee, chaired by Senator Nelson W. Aldrich of Rhode Island, toured Europe and collected data on the various banking methods being incorporated. Using this information as a base, in November of 1910 Senator Aldrich invited several bankers and economic scholars to attend a conference on Jekyll Island. While meeting under the ruse of a duck-shooting excursion, the financial experts were in reality hunting for a way to restructure America's banking system and eliminate the possibility of future economic panics.

[Source link here]

 

I think we've been set up to get bamboozled again.

 

 

Jupiter Island, Jekyll Island,

 

 

Gilliben's Island... 

 

It's tough to tell them apart these days.

 

 

 

[traviskicks]

Ah, I see what you were saying. Yea, IMO, it bodes poorly for us all that Bernake is Morgan’s modern ‘equivalent’.

[Twinkie]

“What happens when this isn’t enough and the market hits the crapper?”

Well, then, the party is over. Hard times will come. First of all, fat cats on Wall Street may jump off buildings if they haven’t any other hope than the house of cards that money is. - People will learn to hunt, fish, garden, work for a small pittance and be glad for it. There may once again be soup lines in the cities, a resurgence of people going back to the homestead and learning how to really WORK for their daily bread - learning that they don’t have to have this and have to have that or else surely die if they don’t get it. After a few years of these hard times, going to the movies and upkeeping these Hollyweird *stars* in their silly lifestyles will dry up (and none too soon) as no one will have the money to either go or to produce these violent, wildly expensive horrors. TV stars will also have to tighten their belts as women who generally watch daytime TV will work like Rosie the Riveter since President Obama will have gotten us into another war or two since that’s what Democrats do. Oprah’s audience will no longer CARE what expensive item Oprah’s pushing on them this week. - The time for foolishness will be over. People will eat a lot of dried beans, potatoes and cornbread in the South, and even Yankees will be learning to eat lower on the hog. We will ALL be shooting and field dressing deer and moose and whatever other wild game we can get. - The pride of out-dressing one’s neighbor, of driving a fancier car than one’s neighbor, of living in a tonier zip code than one’s neighbor will fly out the window. Women who have bought into the Hillary Clinton type of “feminism” and have aborted three or four pregnancies in order to postpone having children in favor of their “careers” will see those careers vaporize into thin air and wish they had those children they had aborted to now help in the garden. Pride will go out the window. Neighbors will all be in the same boat, so they will help each other how ever they can. Doctors will once again accept chickens in payment for a house call and be glad to get them, and people will learn how to set their own bones and not camp out at a doctor’s office since gasoline will be $10.00 (a day’s pay) per gallon. People will use the Sears catalog for toilet paper, and paper towels will be abandoned in favor of cloth ones. A lot of things will change, and if you survive it, it might not be all bad. - Hint: We have been spoiled, but there are a few old timers who remember what The Great
Depression was like and how to survive one. We’ll have to put our shoulders to the wheel and learn to make do.

[ThePythonicCow]

traviskicks asked:

What happens when this isn’t enough and the market hits the crapper?

Jim Robinson replied:

I don’t think anyone’s thought it through that far.

Those of us in the doom & gloom conspiracy crowd, who are perpetually long on tin foil hats, would claim that, yes, they have thought it through. They are out to destroy us and rob our corpses. (Just don't ask me who "they" are ... that part's a bit dodgy ;).

[Hattie]

What happens when this isn’t enough and the market hits the crapper?

Quit worrying. Obambi is going to tax the rich for it. The 95% of the rest of us will be living in mansions we wouldn't be able to afford without him.

[Hattie]

......We have been spoiled, but there are a few old timers who remember what The Great Depression was like and how to survive one. We’ll have to put our shoulders to the wheel and learn to make do.

You forgot walking to work and taking the brown paper bag lunch with you.

[TruthConquers]

When the market hits the crapper, and the DOW falls, the possibility is that the foreign banks who buy our US treasuries to pay for the federal debt will no longer want to hold US dollars.

And then we will really be in trouble, the dollar falls, maybe even default. Can you say Argentina?

Of course, I am NOT an expert. But I have been reading about this stuff since Bear fell, it does not look good.

[familyop]

"What happens when this isn’t enough and the market hits the crapper?"

The answer waits in each of us. Let's use the time wisely.

[Hattie]

When the market hits the crapper, and the DOW falls, the possibility is that the foreign banks who buy our US treasuries to pay for the federal debt will no longer want to hold US dollars.

Well maybe they will just buy the Treasury and own the whole country. Can you say Salute China?

[Deo volente]

I don’t disagree with a word you say, but it would have been nice to see some paragraphs in your post.

:)