So far, the only “too big to fail” that was allowed to go under was Lehman Brothers. I have heard somewhere that Lehman Brothers did not deserve to go down, but because Goldman Sacs people lobbied for them to go under because Lehman lend money to Goldman Sacs and they did not want to pay it back.
Can anyone comment on this?
I can’t comment directly on whether Goldman Sachs was on the hook to Lehman for money. I do know, however, that Goldman Sachs had record profits one or two fiscal quarters out from the financial crisis—I stopped following the financial news subsequently, so I don’t know for how long the record profits continued or not. Nevertheless, it indicates to me that Goldman was highly interested in eliminating competition from Lehman, and got their wish (government capture, anyone?).