Good news in Lehman’s bankruptcy

The losses on Wall Street look like “a bottomless pit,” said David Olive in the Toronto Star, but some good will come out of the bankruptcy of America’s fourth largest brokerage, Lehman Brothers, and the troubles at Merrill Lynch and insurance giant AIG. Flushing away the “dubious assets” and “incompetents” behind “the biggest U.S. financial crisis since the Great Depression is a necessary curative.”

“As painful as it is, as painful as it will be,” said certified financial adviser Andrew Sullivan in The Motley Fool, “the fact that both the government and the financial industry let Lehman fail is ultimately a sign of confidence in our financial markets.” So cheer up.

The government couldn’t rescue everyone, said The Washington Post in an editorial. After throwing lifelines to Bear Stearns and mortgage giants Fannie Mae and Freddie Mac, it “simply chose Lehman" to make that point. Now Wall Street can get to work weaning itself off “unwise investments” and fixing its own problems.

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If the authorities really wanted to do some good, said Jonathan Weil in Bloomberg, they’d be treating Lehman’s offices like “a crime scene.” By letting the sharpies skate, government regulators are showing once again that they “think their job is to protect financial companies and financial executives, rather than the investors they rip off.”