The Planning of the Meltdown

When the history of the end of the neoliberal era will be written, Matt Taibi’s investigative reporting will be centrally featured.

In his latest contribution to Rolling Stone, the machinations behind the fall of Lehman Brothers and Bear Stearns are detailed. It’s a must read essay that makes for gripping reading, with the unfortunate conclusion that those most responsible for the crisis, are now more than ever entrenched in power, with the blessing of the Obama administration.

Short excerpt to give you an idea of its contents:

“What really happened to Bear and Lehman is that an economic drought temporarily left the hyenas without any more middle-class victims — and so they started eating each other, using the exact same schemes they had been using for years to fleece the rest of the country. And in the forensic footprint left by those kills, we can see for the first time exactly how the scam worked — and how completely even the government regulators who are supposed to protect us have given up trying to stop it.

This was a brokered bloodletting, one in which the power of the state was used to help effect a monstrous consolidation of financial and political power. Heading into 2008, there were five major investment banks in the United States: Bear, Lehman, Merrill Lynch, Morgan Stanley and Goldman Sachs. Today only Morgan Stanley and Goldman survive as independent firms, perched atop a restructured Wall Street hierarchy.”

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