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September 15, 2012

The 4th Anniversary of the Failure of Lehman Brothers

Four years ago today Lehman Brothers, the 4th largest investment bank in the country at the time, filed for bankruptcy.  That failure ushered in the worst financial crisis since the stock market Crash of ’29 and it caused the Great Recession, the worst economy since the Great Depression.  The economic wreckage of that continues and can be seen from coast to coast.  (Better Markets’ recently released a report calculating the cost of the financial collapse and economic crisis to the US of more than $12.8 trillion.) 

There is, however, very little reporting on the anniversary of the Lehman failure, the financial collapse or the catastrophic economic consequences it has had on our country.  A notable exception is Joe Nocera’s must read column in today’s New York Times.  He not only talks astutely about the financial crisis, but also about the occupy wall street movement and why it hasn’t been effective and doesn’t look like it will be.

Another notable exception is the PBS Newshour, which did an excellent 3 minute clip on the background of the crises and then an 8 minute discussion about the implications and where things are now.  It can be watched here.  (Full disclosure: Better Markets’ CEO Dennis Kelleher was a guest.) 

There certainly is a lot of news going on from the Presidential race to the tragic murder of US diplomats in Libya and the ongoing attacks across the globe, but the financial collapse and economic crisis — the worst in almost 100 years and costing more than $12. 8 trillion — would seem to merit coverage by the networks, Sunday shows and others.

Unfortunately, the lack of coverage of that collapse and crisis stands in stark contrast to the frequent, ongoing coverage of the financial reform law and the rules and regulations to implement that law, which is intended to protect the American people from such crises in the future.  But, that’s not what the coverage is about.  It’s almost all about Wall Street’s baseless claims that the law is onerous and is going to cost them too much, almost all of which is just reported without any scrutiny or skepticism. 

Given the ongoing damage that the financial and economic crises have caused the country, this is really remarkable.  But, it isn’t an accident:  Wall Street and its allies and sympathizers, almost all on Wall Street’s payroll directly or indirectly, have changed the focus and debate from the financial crisis and their role in causing it to the financial reform law and the rule process.  The reporting that results from this change in focus almost always fails to put these self-serving claims in context, which has eroded public support and undermined financial reform.

The 4th anniversary of the Lehman failure has largely been a missed opportunity for that to change. 

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