Dread and disgust seem to be the dominant emotions marking the fifth anniversary of the Lehman Brothers bankruptcy, as the financial commentariat lament that the U.S. has not altered the conditions that triggered America's historic financial crisis.
A sampling of expert opinion on where we stand today in relation to the time Lehman filed for bankruptcy on Sept. 15, 2008, suggests a consensus view that Wall Street got bailed out while ordinary Americans are worse off; that the financial system remains unreformed and dangerous; and that the crisis' culprits have gone unpunished.
Structured finance expert Janet Tavakoli makes many of these points about the lack of any indictments or meaningful reform on her Tuesday blog post.
Tavakoli characterizes the root of the problem:
"The sheepdogs that are supposed to protect the flock from the wolf pack are really wolves in sheepdog clothing. They exit the regulatory revolving door in expensive bought and paid for wolf-skins."
She laments the bailouts of the financial sector, which she says "destroyed capitalism," and dimly foresees "dark times for the future of the republic."
In a retrospective report, the Wall Street Journal notes that despite slow economic progress there are still 1.9 million fewer jobs, one in six mortgage holders still owe more than their home is worth and that household income is 5% less than in September 2008.
While the government rescued large financial institutions like Bear Stearns, AIG, Goldman Sachs, Citigroup and Bank of America, Fannie Mae and Freddie Mac and the U.S. auto industry, the Journal quotes the Troubled Asset Relief Program oversight committee's report:
The bailouts gave the impression, it said, "that any company in America can receive a government backstop, so long as its collapse would cost enough jobs or deal enough economic damage."
Neel Kashkari, who ran TARP, is quoted as saying: "To save the economy, we had to violate a core American principle: You bear a risk, you suffer the consequences."
Writing for The Atlantic, banking law expert James Kwak expresses the view that the government has not undertaken meaningful structural reforms needed to avert a future crisis.
