Over the past two days, we’ve been treated to two long stories in The New York Times and The Wall Street Journal focusing on employees of Lehman Brothers, one year after the firm’s chaotic bankruptcy filing. Yawn.
Now, don’t get me wrong–both stories are well reported and well written. I was glad to see that one of the people the Times did a mini-profile on was a former Lehman banker who packaged and sold rotting mortgages and is honest enough to admit he has “blood on my hands.”
But it’s not the Lehman employees I’m really concerned about–even if some of them are feeling remorse now. I’m more concerned about average Americans–and for that matter, average people around the globe–who were impacted by the collapse of Lehman and the collateral damage to the financial system.
A year later, we still don’t read or hear enough stories about the average folks who bought Lehman’s now worthless structured notes, which were pitched as conservative investments. Over the past five years, a Lehman subsidiary in Amsterdam sold some $30 billion of these notes to average investors–many of them retirees–in England, Belgium, Germany, Switzerland and elsewhere in Europe.
How are these people getting on?
Or what about the thousands of people in Thailand and Asia who bought similarly worthless Lehman mini-bonds?
And let’s remember, this crisis began long before Lehman with the meltdown in the housing market. The foreclosure crisis is still going on and it’s getting worse.
Sure, there are still stories about the foreclosure crisis. But more and more of these stories in the press are about once wealthy people losing their homes.
We need more stories about how this financial crisis has impacted and continues to impact average people. The media’s focus on the fortunes of those who worked on Wall Street or the rich and famous–for instance, the celebrities who lost money with Bernie Madoff–is one reason I think there is so much outrage at the last year’s bailout of Wall Street banks. Bailouts that were necessary, if poorly designed and enacted.
For many people, it seems the politicians and media are mainly concerned with the fate of the bankers, the powerful and the well-connected. As we approach the one year anniversary of Lehman’s collapse and the start of the mega financial bailouts, it’s time to re-focus on the role of Wall Street as the culprit in this crisis.
After all, it was the Wall Street banks that provided the financing that drove the mortgage mania to the stratosphere and found clever new ways to package iffy home loans as high-grade investment bets.
We need fewer stories feeling sorry for people who work, or worked on Wall Street. And more stories on how Wall Street created a system that has made the lives of ordinary people much more difficult for years to come.
A year after Lehman, there are still so many unanswered questions about the role Wall Street banks, the credit rating agencies and yes, the regulators, played in this whole crisis. It’s the job of the media to get to the bottom of these issues–not to write Wall Street sob stories or political hagiographies for regulators trying to engage in a bit of revisionist history.
Joshua makes a fair point about my failure to include stories of regular people who were victims of the financial crisis. So here is a link to a column I recently did for Reuters on a Florida resident facing foreclosure on her home and a story I did at BusinessWeek with my colleague David Henry on some of the victims of Lehman’s structured products.