In Hank Paulson’s book on the 2008 financial crisis, the former US Treasury secretary recounts how Dick Fuld, former chief executive of Lehman Brothers, enthused to him about Ken Lewis, former head of Bank of America. “We have a lot in common – we’re both guys with a chip on our shoulder,” he said.
Given the tumult that followed the collapse of Lehman two years ago on Wednesday, remarkably little has changed. Wall Street’s surviving investment banks are again making plenty of money, their employees are still getting large bonuses, and Mr Fuld’s shoulder remains chipped.
The argument over the decision by Mr Paulson, along with Ben Bernanke of the Federal Reserve, to let Lehman fail continues and could go on indefinitely. No one knows the counterfactual history for sure – what difference, if any, it would have made if $50bn or so of public money had been deployed.