Days later, federal officials, who had let Lehman die and initially balked at tossing a lifeline to AIG, ended up bailing out the insurer AIG for $85 billion.
The incestuous relationship between the US government and Wall Street's largest financial institutions
"Over the past year Larry Summers, one of President Obama's top economic advisers, collected roughly $5.2 million in compensation from a hedge fund and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations. Summers' fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form."
-- The Washington Post, April 4, 2009
"An examination of Mr. Geithner's five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street's giant financial institutions. His actions, as a regulator and later a bailout king, often aligned with the industry's interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records."
-- New York Times, April 27, 2009
The recent financial catastrophe has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government -- a state of affairs that more typically describes lesser developed countries that often are plagued by emerging-market crises.
Comparing the US to emerging-market-based governments, former IMF Chief Economist and current MIT Professor Simon Johnson, The Atlantic, May 2009 put it this way:
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