Just started reading Bruce Mann's "Republic of Debtors." And by just started, I mean I'm only to chapter two where he gets into a Nietzschean discussion of the transformation of social mores regarding debt as evidenced by religious leaders who went from looking at "credit as a means of charity rather than a commodity," to using religious texts to impose a stigma on defaulting borrowers - a world view that still predominates to this day.
But the part that stuck with me, or at least I've been thinking about all day, is the relationship between liquidity and insolvency evidenced by Philadelphia's own Robert Morris.
Mann uses Morris to explain the apparent Catch 22 that then caught some of the early republic's wealthiest debtors. Due to the lack of circulating currency, debtors like Morris became technically insolvent in that their assets were locked in long-term, illiquid assets leaving them unable to repay their short-term debts.
Mann quotes Morris as stating:
"Hard, very hard, is our Fate to be starving in the midst of plenty for we have abundant property, money however cannot be obtained for any part of it."
Sounds like something Dick Fuld might have said during the summer of 2008.