, Columnist
Let's Put the Lehman Bailout Debate to Rest
Rescuing the securities firm wouldn't have mattered. The financial crisis was coming no matter what.
Sold for scrap.
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An old meme in new clothing has been circulating recently: The Federal Reserve could have and should have saved Lehman Brothers. It had the resources, the legal authority and the obligation to do so; its failure to act let a modest financial fire become a full-blown credit crisis.
It is an interesting post-crisis theory from academia. But some of the claims are irrelevant, and almost all of them are wrong.