Image via Wikipedia Perhaps it's time to sound the death knell on the old gray economy and create new institutions that can foster the new green economy. A phoenix rising new from the ashes of the collapsing old and exhausted.The news this weekend is pretty grim. Bank of America (BAC) is buying Merrill Lynch (MER) for $29/share, American International Group (AIG) was one of the subjects of a special weekend session of Wall Street execs trying to save it from certain collapse. The other, Lehman Brothers (LEH) is being left out to swing on its own rope after Barclays broke off talks.
Lehman Brothers has an illustrious history, and was at the forefront of ever major economic development in the US since before the Civil War.
From its humble beginnings as a general store in 1840s Montgomery, Alabama, and as a cotton brokerage in New York City through the railroad bonds and early securities trading, Lehman Bros went on the ride (or push) the wave of boom after boom throughout the 20th Century.
Lehman financed most of the old major department stores, airlines, movie theaters and studios and was on the leading edge in developing technologies like radio and television, oil development, consumer products, the auto industry, electronics, computers and the Internet. Lehman was there, fueling and financing the economy.
As recently as last year, Fortune named Lehman Brothers the "Most Admired Securities Firm." And the formation that same year of their Council on Climate Change, run by Theodore Roosevelt IV, was set to keep them on top of the business implications of global warming and industry's reaction to it.
No doubt they would have figured out how to make green from Green.
But then came risky mortgages and real estate investments, the resulting financial crisis, collapse of their brethren, and concerns about Lehman's financial condition. Last week, the Fed said it wouldn't come to the rescue of the 158-year-old institution.
Lehman Brothers, once a great institution, is probably going to die.
I've been thinking about what made Lehman great over the past century and a half. Clearly it was an eye for what was next in terms of infrastructure and economic drivers. Who has that vision today?
Could it be that we need new financial institutions with similar vision and wherewithal to fund the major infrastructural needs of this young century?
Where are the new breed of investors financing alternative energy, efficiency, and rebuilding the electricity grid so that it can transport energy generated by industrial wind and solar?
Where are the new institutions that can catalyze a new green economy in much the way Lehman did the golden age of the railroad, the economic expansion of the 1950s, or the leading players of the high-tech revolution?
Some are calling for systemic solutions. Perhaps it's time to change the system entirely.
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