The New York Times’ Louise Story and Ben White recount the failure of Lehman Brothers to either find a buyer or raise the necessary capital before it became bankrupt. Indicative of the incestuous nature of the financial crisis, Lehman did have some success getting money from AIG (the insurance giant that got a govt. bailout) but the banks (JP Morgan Chase, Bank of America) wouldn’t buy it.  Aside from the complicated story of how Lehman was allowed to go bankrupt and the Treasury Dept. saved similar investment bank Bear Stearns, is a simple tale of fairness within Lehman: CEO Richard Fuld is still worth over $100 million but he’s cut off the severance packages for about 1,000 employees who filed for bankruptcy.

The Times’ has run a series of excellent articles giving context to how the financial crisis happened. Particularly of note to Understanding Government readers, is an article Friday by Stephen Labaton that examines the painfully business-friendly practices at the Securities and Exchange Commission. This included lifting restrictions in 2004 on how much debt investment banks could take on.-MB

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