Lehman brothers - what are the candidates going to do about it?
By evanslf
@evanslf (484)
September 15, 2008 4:17pm CST
Today we've heard how the 4th biggest US bank, Lehman Brothers, has collapsed with thousands of employees now out of work. I think this credit crunch is getting very serious, it goes on and on, we are told not to worry but I don't trust what the bankers and our leaders say.
Now that Lehman has gone to the wall, other lenders have suddenly found that they won't get their money back from Lehman's, this will inevitably mean that banks will increasingly be wary of lending to each other, as they don't know what each other's bad debts are. If the banks don't lend to each other, the financial system will seize up and they won't give credit to by homes, affecting the housing market and the wider economy, etc.
I know that Bernanke, chairman of the Federal reserve, has tried to stave off disaster so far by drastically cutting interest rates, providing loans to liquidize the financial system, bought out Freddie and Fanny , etc but now that Lehman has been allowed to go bankrupt, the financial markets may well seize up again with financial institutions not trusting each other.
I want to know what our presidential candidates are going to do about this. In my view, the events of the past year will bring the era of laissez faire economics and free market ideology to a close. I think there is a realisation in many circles that one cannot let major banks and financial institutions do as they please as greed seems to have got the better of them and they have thrown caution to the wind. If that only affected them and their shareholders, then that would be fine. But we have now learnt that this affects the US and world economy as well. What I want to know from the candidates is how they are going to stem the current tide and ensure this never happens again. I think that more stringent regulation of the banking and finance industry is required and I don't care how much these people bleat. They have been irresponsible and the situation needs to be put right. What do you think?
4 responses
@thegreatdebater (7316)
• United States
16 Sep 08
Evanslf, the collapse of Lehman wasn't a shock, but it also wasn't expected. Everyone knew last week that they had problems, but the big shocker was AIG needing $40 billion to continue to stay in business. We all knew about Lehman brothers, and Washinton Mutual having issues, but AIG is the largest insurer in the country, and if they go under there will be alot of problems. These companies made horrible decisions on where to invest their money, but they are a business, and they made billions do so, so when they lose billions then why should be bail them out. I feel that they should take all of the money that they are going to pay the CEO, and give it back to the people that are losing money. I don't think that the government needs to get involved in this, but this is a perfect example of Bush's lack of competent treasury secretary, EVER. But, what do you expect from Bush?
1 person likes this
@thegreatdebater (7316)
• United States
17 Sep 08
X, I think it is important to remember that there are two men who are running for office right now that voted to end Glass-Steagal: John McCain, and Joe Biden. Can you guess which one voted for it, and with one vote against it? That is the man that should be blamed for this, last time I checked Bill Clinton wasn't running for office.
@Sarah1108 (310)
• United States
15 Sep 08
This is starting to really freak me out. I thought i would wake up hearing that WaMu went belly up. I found Lehman brothers to be a shock. I dont know what we are going to do as a country. it is going to take longer than 4 years to pull out of this. I think both of the candidtes are shaking their heads right now. Either one of them that gets the job is going to have a hard time. People are going to jump all over them but it took 8 years to get here i hope we dont think it will take only 4 years to get us out. I feel for all those people that are now unemployeed i know how that feels right now. I wonder if McCain's friend still thinks we are a country of whiners? The market closed today the lowest since 9/11/2001. that should freak anyone out no matter what party you are from!
@ParaTed2k (22940)
• Sheboygan, Wisconsin
15 Sep 08
Let's hope the government finally stays out of it, it was government bail outs that got us to this point in the first place.
@xParanoiax (6987)
• United States
16 Sep 08
I don't think government should get too heavily involved, a little more regulation would be nice...but it's hard to keep government from going overboard, sometimes so with that I advise caution to advocates of that.
Most part, government should provide new options to HELP the economy. Like offering to buy things from regular folks and to go on and sell/use that stuff (since it'd cut down on government spending, which usually benefits companies more than the people, and in extension, the economy).
They shouldn't just start going, "Lets save this and this company that was failing because what it did was horrible and helped lead to this mess"...but that's what they've done.
There is NO SUCH THING as 'too big to fail'. This world doesn't give a crap how big and powerful you are, if you've practiced horrible policies and exercised greedy practices, you will get brought down sooner or later.
They need to forget about big companies, banks, and start working for the people again. Elsewise, it's just a shell game which encourages bad behavior and does nothing to fix anything. Delaying, that's all it is.
It's time for an overhaul, and yes it will be painful and bloody.
Sad we had to get to this point, period.
