The Banks

• – In the News: Big Insurer AIG Seeks Cash, $40 billion bridge loan from the Federal Reserve, as Portfolio Plummets. (update: AIG get Fed Bailout)
  
• – In History, via Jack London, The Iron Heel, written in 1906:

“The banks, themselves constituting one of the most important forces of the X, continued to call in credits. The Wall Street group turned the stock market into a maelstrom where the values of all the land crumbled away almost to nothingness. And out of all the rack and ruin rose the form of the nascent X, imperturbable, indifferent, and sure. Its serenity and certitude was terrifying. Not only did it use its own vast power, but it used all the power of the United States Treasury to carry out it plans.

The Captains of Industry had turned against the middle class. The employers associations, that had helped the captains of industry to tear and rend labor, were now torn and rent by their quondam allies. Amidst the crashing of the middle men, the small business men and  manufacturers, the trusts stood firm. Nay, the trusts did more than stand firm. They were active. They sowed wind, and wind, and even more wind; for they alone knew how to reap the whirlwind and make a profit out of it. And such profits! Colossal profits! Strong enough themselves to weather the storm that was largely of their own brewing, they turned loose and plundered the wrecks of business that floated about them. Values were pitifully and inconcievably shrunken, and the trusts added hugely to their holdings, even extending their enterprises into many new fields – and always at the expense of the Treasury, and the middle class.

Thus, the summer of 1912 witnessed the virtual death-thrust to the well-being of the middle class. Even Ernest was astounded at the quickness with which it had been done. He shook his head ominously, and looked forward without hope to the Fall Election.”

(X added by editor)

Interestingly enough, Jack London, a fiction author, seems to have had a firmer perception of underlying patterns and weaknesses than a century of technocrats. Or is it the other way around?