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Lehman may not have been a particularly large bank, and it probably was not even insolvent when it failed.Lehman was transformative because it fundamentally altered people's understanding of the world around them.After Sept. 15, 2008, the fear of "another Lehman" and a deeper financial catastrophe put the United States on the path toward wide-ranging reform. First, after Lehman, the American economist Charles Kindleberger's 1978 masterful book "Manias, Panics, and Crashes" met with a newfound popularity.The second narrative was that Lehman's failure had made the Wall Street crash of 1929 and the Great Depression newly relevant. The third narrative held that Lehman's collapse augured the end of American capitalism. After Lehman collapsed, the twin narratives about "market failure" and "another Great Depression" had a massive effect on public perceptions, and fueled the third narrative, which actually happens to be true.Lehman Brothers' collapse revealed a flaw not just in finance, but in 21st-century politics and society.
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