Re: When history is written
Do you have any evidence for that claim about Gordon Brown?
My recollection of events was that Barclays were after buying out Lehman Brothers globally, but wanted some quite large treasury guarantees. Which UK government refused. Perfectly understandably, as no-one had a clue what the risk was. So in the end Barclays bought Lehman's US arm afterwards instead - taking much less of the risk.
The US had already decided to let Lehman go bust, as a salutary lesson. A large mistake as it turned out. I'd imagine that the UK government position was why should we bail out a US bank if they're not going to?
I remember reading subsequently about this, and noting that the US guys they interviewed were rather bitter about the Barclays deal not going through. And so blamed the Treasury. But I'm not sure if that isn't revisionism - because as I understand it the Barclays deal only came about because the US had already decided not to bail Lehman out.
Also the crisis would still have been very serious anyway. See the Eurozone for why. The banks were totally fucked, in various ways. They'd been out of control for too long. They'd taken on too much risk, they'd been committing various frauds, the UK interest-rate swaps and PPI misselling bill is going to come to something like £20-£25 billion! Even without Lehmans, the interbank market had frozen up, because all the banks knew all the others were loaded with toxic debt. Because none of them would admit the amounts, none of them could trust each other. The Eurozone was a house of cards, waiting for a recession to destroy it, the Eurozone banking system was also fucked, although for different reasons. They'd taken on some of our and the US's crap assets, but mostly what's destroyed their banking system is cross-border lending into property markets they didn't understand, political interference with local banks (Landesbanks and Cajas in particular) and all the toxic government debt.
Banking recessions are always going to be awful, because so many companies get finance from banks, so when they're shrinking their balance sheets it's almost impossible to kick-start recovery. Lehmans was the trigger which brought the crisis on, but in the end the banking sectors in the US, UK and Europe were teetering on the edge of collapse, and couldn't be saved without huge infusions of government cash. That meant they'd have to de-leverage, and that meant a massive recession. The rest was just timing.