Lehman (LEH) says it will go into Chapter 11. Richard Fuld, the company’s CEO, will almost certainly end up being loathed more than the heads of Drexel, Long-Term Capital Management, or any of the firms that failed in the S&L crisis. His mark as a symbol of Wall St.’s monumental greed and stupidity will live long after he is gone.

Outside New York and the global financial community, Fuld has less name recognition than the giant panda, Yang Yang, in the Atlanta zoo.

More at issue than Fuld’s legacy is the burden that the failure of his company and other financial firms will put on the US taxpayer, not just in the next year, but over time. The Treasury may get money to cover the bill by pushing the deficit higher and borrowing money by selling bonds, most of which will be snapped up by China. The IRS will want it pound of flesh at some point. That money may come from the pocket of the working man today. Or it will end up as part of the payroll deductions of his adult children.

It is a shame that Henry Paulson and Ben Bernanke are the only people with a "vote’ when it comes to spending the government’s money on emergency funds for banks. In reality, that money make not be paid back. More bank failures are likely. Some pessimists including NYU economics professor Nouriel Roubini and Wilbur Ross see that number going as high as 1,000. The FDIC does not have the capital to handle that level of depositor obligations.

There is not enough time for a national referendum on what should become of America’s banks and financial system. Paulson would argue that the average citizen is too simple-minded to understand how intricate the tapestry is.

Paulson would also argue that only sophisticated experts can fathom the current troubles and navigate the complexities that are necessary to fix them.

But, it is the genius that ran Lehman and the Harvard-educated experts who operated other banks and brokerage firms who destroyed a framework which has served the country well for decades.

The system would have been better off if it had been run by farmers and truck drivers. At least they know how to fix something.

Douglas A. McIntyre

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.