F F I R E H S T W E E N L STRE L A W DO E H T T A H W OF
N A C
Biden has empowered a crop of aggressive financial regulators. They’ll need to look beyond the banking industry and into finance’s darker corners. BY LEE HARRIS
Clockwise from top: Treasury Secretary Janet Yellen, SEC chair Gary Gensler, CFPB director Rohit Chopra, Federal Reserve chair Jerome Powell
The most stylish play running right now on Broadway follows the three Bavarian immigrants who founded Lehman Brothers bank. “When we were in business, people gave us money and we gave something in exchange. Now that we’re a bank, people give us money just the same, but we give nothing in exchange,” frets the middle brother, Mayer Lehman, in The Lehman Trilogy. The brothers got their start selling cotton fabric— “denim, that robust fustian work cloth”—from behind the counter of a modest shop in Alabama. They grew quickly, layering credit between their storefront and the commodities they traded. “We’re middlemen,” one brother exclaims when asked to describe his line of work. Dutiful groans from the audience of New York intelligentsia and investors who fill the theater each week. (Jeff Bezos, Amazon’s former
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CEO, reportedly attended the play on a date.) The actors do not bother staging the climactic scene of September 2008. Why bother? Everybody knows how it ends. In The Lehman Trilogy, banking is the slippery domain of speculation; capitalism dwells in the real economy of guns and butter. It takes a Victorian, noseholding view of finance. More than a decade after the financial crisis, it seems positively quaint. Progressives now describe the investment function as a public good rather than a presumptive evil, available to be put toward common ends like renewable energy and full employment. Banks also look tamer today. Too-big-to-fail lenders weathered the coronavirus crisis, partly due to requirements in the Dodd-Frank Act passed after 2008. New buffers requiring conventional banks to hold more capital have made them more resilient.
