That Sound You Hear

....could be Paulson and Bernanke figuring out how to explain that Lehman Brothers, down over 40% today, is "too big to fail."

I'm casual acquaintances with a couple of Lehman guys (and I was a guest in one's not-so-humble abode recently). To say they've lived the high life during the past few years would be an understatement. The notion that taxpayer money might be used to buy them anything more than an off-peak bus ticket to the Hamptons is sickening. Unfortunately, there are three things at work right now. One, an election year in which all stops have been pulled out to keep the financial markets as stable as possible, future consequences be damned. Two, a short-timer Treasury topper who came from Wall Street, has a vested interest in it and its culture, and knows many of these executives personally. Three, a Fed chairman who will probably be back in the private sector within the next year or so, drawing fat checks a la Greenspan from the same firms whose profits and survival depend on decisions he's making right now (when will Congress close this outrageous post-Fed employment loophole?).

This is starting to look like a not-so-gradual descent into a sort of bizarre latter-day economic feudalism, overseen by a small coterie of unelected and unaccountable statists who have a standing order with the local locksmith for duplicate keys to the national coffers. But the precedent has been set, and every Wall Street CEO has a big red phone on his desk that, when picked up, automatically dials Washington with a pre-recorded message: "Where's ours?"

As I said, sickening.