FIVE years ago the world was stumbling into a chasm. Of course the signal fact about the bankruptcy of Lehman Brothers and the financial and political chaos that followed was that it led to the most significant real-economy disaster of the postwar era. Panic on Wall Street was a wrenching spectacle. Yet the goal of saving the banks and stemming the panic was not, for the most part, preservation of any particular quarter of the finance industry for its own sake. It was to prevent a Depression. In that policymakers enjoyed success only by the miserable comparison of the Great Contraction of the 1930s. Output and employment fell by much less than they did from 1929-1933. For all the economic pain of the global recession things never got bad enough to unravel the institutions of liberalism, to make tyranny and war attractive options. Yet things were bad enough. Global trade collapsed. America lost 5.4m jobs from September of 2008 to April of 2009.
This article has been curated from The meaning of Lehman (take 3)