Somewhere in the Middle

A FRIEND, over beer and pizza, asked me if i knew anything about the panic of 1907, and when i admitted that at the moment, indeed i did not, he proceeded to fill me in. Seems that the stock market dropped fifty percent, in the midst of a recession, and huge banks and other financial institutions suffered from a "liquidity crisis", in other words, they ran out of money.

The whole thing was triggered, it seems, by an attempt by a few high rollers to corner the market in copper stocks, in an era when the entire country was on the verge of being hooked up with electricity, and copper was sure to increase in value.

The crises finally came to and end when several high rollers, including  j p morgan, who might have been part of the copper monopoly group, promised to use their own money to prop up the system. Because of this debacle, a commission, headed by a mamber of the rockefeller family, recommended establishing a national bank system, to regulate and stabilize the currency supply, and hence, the economy.

This resulted in the creation in 1913 of the infamous federal reserve system, those twelve big banks scattered around the country which draw such ire from new age anti establishment hippies and ultra conservatives. Also, further anti trust laws, to beef up the sherman antitrust act of 1892, were passed. combinations in restraint of trade, and so forth.

kinda sounds familiar, don't it.. fast forward a hundred years, and there you go again. recession,  rampant financial speculation by billionaires, corporate bankruptcy, and massive economic collapse. only this time, in 2009, it was the american federal government which came riding to the rescue, saving corporate capitalism to ravage the world another day.

Those who favor the elimination of the federal reserve should think twice. Too much government control is tyranny, too little government regulation is darwinistic chaos. often times big time wealthy investors and financial hot shots will have you believe that even the slightest whiff o government regulation spells tyranny, but don't let 'em fool you. Together, may we find the happy mean.