Sunday, September 13, 2009
One year after Lehman Brothers collapsed into the biggest bankruptcy in U.S. history, sparking panic that the economy might spiral right along with it, Wall Street is still running the same operation despite claims last September that bankers had learned their lesson. Risky investments are still being made, including trades of unregulated derivatives, and bonuses are aplenty; thirty thousand employees at Goldman Sachs are expecting to make an average of $700,000 this year.
While the Obama administration likes to talk tough about cracking down with new regulations for Wall Street, the reality is that it will be difficult to get many of these proposals past Congress. If that’s the case, another meltdown is extremely likely, because the too-big-to-collapse philosophy will always force the federal government to step in and clean up whatever mess the financial industry creates.
“They will run up big risks, they will fail again, they will hit us for a big check,” predicted Simon Johnson, a professor at the Sloan School of Management at the Massachusetts Institute of Technology and former chief economist of the International Monetary Fund, in the New York Times.
-Noel Brinkerhoff
A Year Later, Little Change on Wall St. (by Alex Berenson, New York Times)
Lehman Brothers and the Age of Stupidity (by Morgan Housel, Townhall.com)
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