At a public hearing of the Financial Crisis Inquiry Commission -- the group put together to investigate the Wall Street implosion of 2008 -- former Lehman Brothers' CEO, Dick Fuld, wants everyone to know that Lehman was not at fault in its failure
. No, it turns out the problem was all of you. You didn't believe strongly enough in Lehman, and then the government didn't bail him out because of it. As the crew at Planet Money notes:
In fact, in 1,680 words of prepared testimony, Fuld devotes exactly 15 words to what Lehman did wrong. And those 15 words are immediately followed by an explanation of why Lehman's errors didn't contribute to the bankruptcy:
In retrospect, there is no question we made some poorly timed business decisions and investments, but we addressed those mistakes and got ourselves back to a strong equity position ... There is nothing about this profile that would indicate a bankrupt company.
Of course, part of his reasoning is that the government did
proceed to bail out most of the other big Wall Street firms. However, just because the government decided to save those other guys, it doesn't mean that all of Wall Street didn't make some serious mistakes in creating their own downfall. In fact, a recent report from Planet Money and Pro Publica, that came out just last week, showed how ridiculous levels of self-dealing among banks
not only prolonged the mess, but actually made the eventual impact much, much worse. Basically the banks created fake demand for the very worst parts of the mortgage-backed securities they were trying to sell, in order to keep on selling.