97 Years on the Case: Towards an ABC of Financial Crisis

I'm sure I'm not the first to imagine a research project that rereads Pound's body of work through the lens of the present financial crisis. Indeed, there is a whole subculture in the U.S. for whom December 23, 1913 is a day of infamy. It was on that day that the Federal Reserve Act was passed by the Senate. Twenty years later, in his ABC of Economics, Pound chastised those who say that "A bank manager need know nothing save the difference between a bill and a mortgage". But he follows it up with an observation that should give us pause in this age of derivative-induced financial catastrophe: "Several 'great financiers' and prize-receiving 'economists' in our time fail to make this distinction." (SP, p. 227) There is, indeed, a sense in which credit-default swaps are failures to differentiate between paying one's bills and making payments on one's mortgage.