By contrast, such as Goldman Sachs – an old partner-turned rival of Lehman Brothers from the early twentieth century – was able to attract a generous portion of the huge bail-out fund thrown together after the Lehman collapse by Paulson. Goldman Sachs had fostered its links to government by encouraging its people to take jobs in public service since the days of Sidney Weinberg’s leadership in the 1930s.
Lehman Brothers had once been close to government.
Herbert H. Lehman, former partner, as governor of New York was President Franklin D Roosevelt’s right hand man in the New Deal. Bobbie Lehman, chief of the firm for forty years, abandoned his long-term support for the Republican Party to become an ardent fan of President Lyndon B. Johnson in the 1960s.
At its end, the bank had long since lost its key political connections. This was largely thanks to the disastrous period of leadership of trader and short-term thinker Lewis Glucksman in the 1980s. He was much assisted at the time by his protégé, the young Dick Fuld.
But essentially, Lehman Brothers abandoned its historical roots.
It was founded in the best traditions of America by a humble migrant family. The Lehmans – Henry and later his brothers Emanuel and Mayer – came from Bavaria, Germany, in the 1840s and built an enterprise based on long-term investment in their new homeland and trade in material things. Initially Henry was a peddler in Alabama then moved into southern cotton. The brothers bartered, built relationships, stayed close to their clients.