60 Minutes: The case against Lehman executives

Steve Kroft talks to the bank examiner whose investigation reveals the how and why of the spectacular financial collapse of Lehman Brothers, the bankruptcy that triggered the world financial crisis. Here is the direct video link.

The story is important to understand and shows another glaring example of financial executives and their accountants getting away with financial murder. They remain at large, unprosecuted and no doubt happily spending their millions. Probably making more big contributions to the upcoming presidential race. Hush money indeed.

One issue I take is with the presentation of Lehman’s collapse as the cause of the financial crisis. That is like saying the Great Depression was the fault of the Federal Reserve for not flooding the system with enough liquidity in the early 30’s (as Bernanke asserts). The Depression was caused by the 2 decades of greed, corruption, reckless behavior and leverage that built up in the financial system and firms leading up to the bubble bursting in 1929.

Similarly in our generation, Lehman was one of many symptoms, not the cause of the financial crisis. The cause of the crisis was and still is rot, greed and corruption, lack of ethics, lack of political leadership, lack of proper regulation and oversight in the global financial system. Remember we must recognize the truth about what happened and punish offenders in order to admit, repent, recover. Everything else is counter-productive.