Review of The Panic of 1907: Lessons Learned from the Market's Perfect Storm (Hardcover)

This is a very short book about a fairly complex event.While it is accessable to the general reader, the book comes alive only when describing the recovery efforts of a group of private financiers led by J. Pierpont Morgan.More focus is needed to show how the problem developed and to help explain the dynamics of investor panic contagion.Further, government officials are given short shrift as either creators of the problem (President Roosevelt) or as Morgan's lackeys (Secretary of the Treasury Cortelyou).

The authors portray Morgan as a giant among dwarves.He almost singlehandedly ends the panic with visionary, unselfish, decisive and commanding presence.In regard to the latter attribute, Morgan is shown summoning the United States Treasury Secretary to New York, warning short sellers that they will be "properly attended to" after the crisis and ordering bank presidents to work.At one point, Morgan is almost godlike as he decides which savings institutions will be supported and which will be allowed to die.

Thus, The Panic of 1907 becomes the story of J. Pierpont Morgan vs. panic and greed.Government is given little credit for helping solve the crisis (except when the president agrees to interrupt his breakfast to promise he won't interfere with Morgan's plans).As an example of "adverse leadership," Theodore Roosevelt is listed as a primary cause of problems due to "rising regulation of an activist President."

While it may seem like a small error, the authors mistakingly credit novelist Sinclair Lewis with reporting about the meatpacking business rather than Upton Sinclair.This carelessness causes me some concern about other details presented in this work.

The reader knows more about the events of 1907 when he finishes the book but I am not sure that knowledge is balanced.Further, I did not find the lessons for today very applicable or compelling.I think the book would have benefitted from a bit more discussion about causes, effects and implications for the present.I would also be interested in a more nuanced analysis of the motives of Morgan and the other financiers who acted to help turn the corner on the panic but who must bear some responsibility for the state of finances prior to the crisis.



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