Glad You've Been Dead a Year, Lehman Brothers; Glad You've Been Dead 18 Months, Bear Stearns…

…just wish Citibank, Wells Fargo, AIG, and GMAC had died with you.

A year ago this weekend the investment bank Lehman Brothers Holdings Inc. went out of business after the Bush Administration, in an isolated incident of courage, refused to bail it out. President Obama will celebrate the anniversary Monday with a speech in the Big Apple, New York, N.Y., the city so nice they named it twice.

The president's speech, I prophesy, will claim that the government's failure to bail out Lehman deepened and worsened the recession. Democrats and Republicans have been trying for a year now to persuade the world of this narrative, but even sources subservient to conventional wisdom continue to doubt it. The Financial Times, for example:

One year ago, the US authorities allowed Lehman Brothers to collapse, unleashing chaos. Capital markets froze, banks stumbled and a cascade of collapses seemed imminent. The financial system was seized with fear. A high-speed repeat of the American banking crisis that underpinned the unique misery of the 1930s threatened.

The US authorities were, however, right to allow Lehman Brothers to fail. They could not know how awful it would prove to be, and, when it comes to saving failing companies, governments should err on the side of inaction. Capitalism relies on the discipline provided by the lure of wealth and the fear of bankruptcy.

More banks should have been allowed to fail. Gigantic overextended consumer banks should have been allowed to fail, and the FDIC should have had to organize networks of 500 and 1,000 smaller banks to chop up their "assets." This is not libertopia I'm describing. This is the stated will, then and now, of the vast majority of Americans. The bailouts didn't need to happen. Never forget.