Black September

Over the span of five days in mid-September, America made a mighty lurch into the Age of Consequences.

It began with the dramatic announcement early on Monday morning, September 15th, that the venerable investment house Lehman Brothers had filed for bankruptcy.

This was dramatic news because it was widely expected that someone would save Lehman from this fate - either the federal government or another financial institution. That had been the pattern up to that point. In March, the collapse of Bear Stearns - another of the Big Five investment firms (along with Goldman Sachs, Morgan Stanley, and Merrill Lynch) - had been narrowly averted by its government-financed fire sale to a major bank. Then, during the first week of September, the mortgage giants Freddie Mac and Fannie Mae were saved from collapse with an outright takeover by the federal government. Next, Merrill Lynch foundered, prompting its quick sale over the weekend. Everyone assumed the sinking Lehman Brothers would be next.

Instead, it was deliberately 'allowed' to fail. The U.S. Treasury Department decided to withhold the type of financial support it had been willing to extend to other institutions, which, when no bank stepped up to the plate, forced Lehman Brothers into bankruptcy.

I heard the news while preparing breakfast for my family. It was just another day in all respects, with school lunches to make and chores to complete - except for what I heard on the radio. Merrill Lynch gone in a puff of smoke? Bankruptcy for the 158-year  old  Lehman  Brothers?  I  remember thinking: "That doesn't