Today marks the 5th anniversary of the collapse of Lehman Brothers. Lehman’s was the largest bankruptcy in U.S. history, and its demise marked the beginning of the global financial crisis and was a major catalyst of the financial meltdown. President Obama is using the Lehman anniversary to put an emphasis on the economy, kicking off a series of events with a Rose Garden speech Monday. His National Economic Council is set to release a report detailing the economic advances.
Read more: http://www.nydailynews.com/news/politics/president-obama-defends-approach-financial-crisis-anniversary-lehman-brothers-collapse-article-1.1456570#ixzz2f48bm7eR
All of this creates a good opportunity to revisit blogger Jim Cameron’s review of the Financial Crisis Inquiry Report from January 28th, 2011 – JET
I recently read a book about Ivar Kreuger, the famed “Match King” of the 1920s. Kreuger attempted to monopolize the match manufacturing industry on an international scale by obtaining state monopolies from national governments in exchange for large loans. His amazing financial record got him on the cover of Time magazine in October 1929, just as the stock market crash was beginning. Less than three years later, his companies teetering on the edge of bankruptcy and his crude forgeries of Italian bonds coming to light, he shot himself. Yet the author concludes that, for most of his career, his companies produced real profits and excellent returns for investors – he wasn’t simply a world-class swindler who single-handedly brought on a world crisis. It brings home the fact that great financial crises and collapses are not usually tied to a single individual or industry – the blame tends to be more widespread. It takes much more than a Kreuger or Madoff to light the fuse.
All of this comes to mind when perusing the official edition of The Financial Crisis Inquiry Report, the final report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Note: This official edition is complete, including all 129 pages of dissenting views. I’m no economist, but it seems clear that a series of interlocking corporate and government practices and missteps, extending far beyond any one person, company or sector, caused the economy to tank.
It’s also interesting to see how quickly events recede in the mind. When was the last time you heard about the downfall of Lehman Brothers? Reading this report transports me back to those very scary weeks a little more than two years ago, when everything that had seemed so secure in the economy suddenly displayed all of the characteristics of a wooden skyscraper full of termites.
This book is no easy read, but its subject is compelling, faced as we are with the aftermath of the crisis. It’s a serious report for serious times, and the voluminous dissenting views show how uncertain root causes can be, accept them or not as you will. You can find The Financial Crisis Inquiry Report here, buy a copy of the official edition, including all of the text of the dissenting views, here: http://bookstore.gpo.gov/search/apachesolr_search/financial%20crisis, or get it at a library.