Since market forces are no longer allowed to allocate capital and control risk, these decisions are now made by government regulators and are then passed through to their subordinates on Wall Street. This perverse organizational structure constitutes a new form of American fascism.
The pain of allowing Lehman to fail will be dwarfed by the agony of bailing out the rest of Wall Street, which is now a foregone conclusion. Just because the Lehman bankruptcy created unpleasant consequences does not mean it was a mistake. On the contrary, sometimes doing the right thing hurts - especially if it is done to avoid even greater pain down the road. It just seems that our representatives are incapable of asking for short-term sacrifice. There is no price they are not willing to force the rest of us to pay to assure their own reelection.
In reward for its gross culpability in creating the financial crisis, the Federal Reserve has been rewarded with extensive new powers.
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