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Literature Review
Ideology is a rationality of thoughts that presents a foundation for structured political action. Ideology determines the ability of achieving projected conservation, transformation or toppling the available system of power. According to Mannheim (1996), people’s ideas, are fashioned by their material and social statuses.
Ideologies have a belief system that serves to preserve a certain collective order and articulate the welfare of the dominant group in the society. Weiler (2001) argued that the capitalistic structure is sustained not merely by the asymmetrical financial and political power but also by the hegemonic ideas of the bourgeoisie.
The ideas of the bourgeoisie reinstate other ideas and presumptions hence perpetuating or preserving the class system. Sergent (2008) postulated that ideology could be termed as a structure of values and beliefs pertaining to diverse institutions of society considered realistic by a section of the society. An ideology offers believers a portrait of humanity and the way it should be.
By doing this, ideologies organize the tremendous complexity of the world into something fairly simple and understandable. Having lived in Britain during the industrial revolution, Marx & Engels (2008) established that for the society to develop people must reproduce and produce as well.
Ideology comprises of several ideas of the elites who form the ruling class found in every society and in every epoch. The ruling class according to Marx controls both material and non-material factors of production. According to White & Dash (2008), the class that is in a better position of controlling its overall productivity is better placed to control the mental and intellectual productivity of its members.
Generally, the ideas of those who lack material are subject to those of the ruling class utilizing them for production and their own benefits. Ideology is about delusion and demystification because it perpetrates false or mistaken view of the world. On the contrary, ideology is linked to the ruling system since the distortion implicated on the ideology reflects the interest of the rulers.
The ruling class does not recognize that it is an oppressor and therefore tries to reconcile with the oppressed. Liberalism portrays the rights of people and yet the reality is that the rights can only be enjoyed by the propertied and privileged in the society. It naturally follows that ideology is the manifestation of power that tends to conceal the contradictions of capitalism.
Moreover, ideology, according to Marx is temporary. When new ruling classes take over leadership, they introduce new ideologies. Ideology is not only confined to the ruling class but even the workers and the society as a whole has its ideology. Ideology is then surmised as the distinctive ideas of a particular social class that advances the interests of a certain social class regardless of the position of the class in the society.
Therefore, it is evident that all ideologies serve particular purposes such as: offering accounts to existing orders usually in form of worldviews. They also contribute to advancing some models, in an attempt to configure a well-desired future or coming up with visions of good societies and finally, they strive to explain how political change could be and should be brought about.
Ideologies have always existed in the society. Before enlightenment age, communal based ideologies followed by slave modes and afterwards slave based ideologies, paved way for modern ideologies (such as capitalism and socialism).
Introduction
Metaphorical type-founded orientation established collective utility of communication in monetary editorial articles. Additionally, dogmas of every economic journalist deduced application of the emblematic strategies. Consequently, the researched information in rhetorical policies is a helpful tool for fiscal correspondents in articulating their philosophies successfully.
A monetary journalist creates an authenticity basing on his or her opinions, beliefs of the media houses and the projected addressees. It is suggested that idioms congregates to the established shared, financial and psychosomatic requirements. It is therefore critical that pathways employed by monetary journalist are an interceded structure supported by ideological prejudice. The information obtained from various newspapers and other financial materials illustrates a variation in ideologies.
Findings
White and Dash (2008) in the New York Times argued that Lehman Brothers was sold because of its continued record of losses. This ideology piloted the anxiety among workers outside the firm. This idea never went down well with the majority of employees because of losing their jobs.
The columnist in this article proposes that Lehman brothers played a critical role in stabilizing the labor market and that the government should not have left it to collapse. The columnist also hailed the governments’ full support of the idea because of the huge losses recorded by the company, an idea opposed by Sonati in the Wall Street Journal.
The company had witnessed a $7 billion loss in the previous two quarters. The employees at the bank were never willing to dispose off their shares because of the deteriorating financial capability of the bank. On the contrary, the banks’ top officials tried to convince potential investors that the bank could still survive on its own by alleging to have received many stakes in its investment management division.
Many bidders were willing to salvage the bank including the leading financial institutions in the country. Barclays had a strategy that could facilitate it to acquire the bank without any government support. Some other reports suggested that the bank could be broken into parts so that many individuals and organizations accessed the shares of the bank.
Frangos (2008) in the Wall Street Journal (Online and Print) points out that Mark Walsh had contributed to the collapse of commercial-property market and he was being faced by the same problem. The writer has a different ideology; he comments that the firm was declared bankrupt mainly because of mismanagement.
The Frangos differs with White and Dash, writing in the New York Times, ideologically because the later blames the government for not intervening to salvage the firm while the former relates the whole saga to the management. The columnist points out that the $32.6 billion loans and assets were the major causes of the collapse of the bank.
The company was forced to sale most of the properties and shares at a loss of 20% amounting to about $7billion. The chief executive of L and L Holding David Levinson observed that Mr. Walsh made a number of individuals rich especially those at Lehman hence the collapse of the bank was unexpected, Lattaman opposes this reasoning.
The columnist describes Mr. Walsh as an aggressive and analytical individual who left nothing unturned pertaining to financial matters. Many people liked his character although the same character brought him down. He engaged in so many deals without consulting proper agencies thus leading Lehman into financial crisis through loans and borrowing.
Some of the properties acquired by the company throughout his tenure were valueless. Lehman is accused of making great bets on residential land speculations such as SunCal Cos in California. The writer idealizes that Mr. Walsh should be accused for underrating the 2007 global financial crisis because he went ahead to buying properties and investing in risky businesses.
The thinking of the columnist is in line with his ideology that poor management and managerial skills contributed to downfall of the major companies in the United States. This ideology opened people’s minds since the public started questioning the integrity of senior employees of the firm.
Lattman (2009) in The Wall Street Journal (Online and Print) wrote about the decision made by Lehman Brothers to delink private-equity arm with the collapsed parent firm. His findings are incongruent to those of Frangos mainly because the subsidiary firm was being managed competently and living it to operate under the direction of the parent firm would be problematic.
The columnist differs slightly with White and Dash because the former does not believe that the losses witnessed by the firm were genuine. Lattman postulates that Lehman could still perform unequivocally by showing that the subsidiaries under Lehman were performing extremely well. The Lehman’s current unit of $3.3 billion is to be owned by the incoming management led by chief Charlie Ayers.
The Lehman’s bankruptcy estate is to hold back ownership of a vehicle worth $1.2. Although the company might have recorded the worst bankruptcy ever in the United States history, the incoming company will inherit most of its employees. The columnist, unlike Frangos appreciates the roles played by various categories of employees in sustaining and accomplishing the missions of the company.
He notes that most of the countries’ financial institutions identified Lehman success while attributing the same to employees. The writer comes up with another ideology, arguing that Lehman is not completely out of investment field because currently, it operates a sales process for two huge Lehman’s investment units worth $800 million (capital firm) and $10billion (real-estate private equity group).
This reasoning is meant to give hope to shareholders who trusted the company. The company has full knowledge of the market, knowing that it is highly unpredictable therefore retaining some investments. Sanati (2009) found out that the insolvency of Lehman Brothers was a transformational change. The writers’ views are meant to console the Lehman Brothers Company by reaffirming that the firm’s shares were valued and could fetch high profits.
The collapse of the company was therefore not all in vain, because its shares raised Barclays’ profit just in the first quarter of the year. Barclays recorded $1.36 billion profit, which is equated to four times more than the usual profit. Such an ideology is aimed at raising the profitability of the shareholders of the collapsed company and tries to justify that the company was still known.
Unlike the previous columnists, especially White and Dash, Sanati is optimistic that one day the obsolete company may make a comeback. The Barclay’s income for insurance covers shot by 42% from $8.6 billion to 12.2 billion. The company has many shares in real estate investments due to shares acquired from Lehman Brothers.
Barclays could not have registered such a huge profit could it not have acquired Lehman Company. The acquisition of the Lehman Company was therefore a blessing to Barclays bank. Conversely, the columnist opines Lehman could be a big multinational had it survived the 2007 financial crisis, an idea that does not go down well with White and Dash. Sanati holds this ideology because Lehman’s shares picked up immediately the company was sold to Barclays.
As earlier noted, the fall of the company was something unexpected since its shares were of high value. Beaudette (2010) observed that the lawyers and financial analysts were working out on the ways of obtaining maximum fees before December 2009. The essayist agrees with both Wall Street and New York Times writers who had earlier given their perceptions pertaining to the collapse of the company.
He alludes that the company was defrauded millions of dollars by people who read mischief. Lehman had prepared a financial list showing the figures paid to experts. Beaudette holds the same viewpoint with Eavis, observing that the financial analysts presented fake figures and made the companies’ officials believe that everything was well. The company in return paid a total of $568.7 million in fees and expenses.
Alvarez and Marsal alone received $218.3million as fees for winding down Lehman’s operations. The fees were too high to the extent that Lehman sought the assistance of chapter 11 of the constitution to protect it from exploitation. Lehman filled one of the largest bankruptcy cases being the most expensive in the U.S history.
It is established that before changing hands, Lehman spent many resources in protecting its properties legally. Some of the company’s assets were sold out in order to cater for lawyers’ fees. The court established that Lehman Brothers holdings had a number of cases, amounting up to 65,000 even though some were deemed duplicates.
Findings suggest that experts contributed in the downfall of Lehman Company because they took advantage of its deprived position in the market. They utilized this opportunity to claim huge amounts of money in form of fees and other expenses. One expert was quoted recently admitting that he defrauded Lehman Brothers millions of dollars.
The columnist suggests that honesty and trustworthiness lacked among the employees and clients of the company. The experts colluded with lawyers and external financial experts to deprive the company of its resources.
Beales and Cox (2010) agree with Beaudette (2010) that not only did the financial crisis contribute to the bank’s collapse but also other factors such as lack of government funding, false information given out to the public by competitors and of course mistrust and corruption within the precincts of the company.
The immediate head of the organization postulated that his company was not given sufficient attention by the government the way other small and unprofitable companies were treated. He cited that the government was discriminatory and partial in bailing out private corporations. The government gave a very weak reason why it refused to rescue Lehman from uncertainty of economic crises.
The commission put up to examine the problem found itself in an uncomfortable position because amendments had already been made that would allow improved system monitoring and coordination between regulators. The commission could not do much because of the existing disparities among politicians, government officials and bank regulators.
The columnists suggest that the laws existing now should have been passed a long time to facilitate continuity after prior crises. On their part, the two writers squarely blame the government for being reluctant in taking care of the states’ financial activities. They suggested the state intervention at some point to restore normalcy in during crises.
Eavis (2010) in the Wall Street Journal seemed to concur with Rob and Beales’ ideas because the court moved to appoint Lehman Brothers examiner while it never did so for other companies such as AIG. Mr. Valukas came up with a report to shape the public’s perception about the fall of the company. The report gives a comprehensive report on the position of American investments such as Citigroup Bear Stearners.
The report also concluded that it was unfair for the congress to offer support and protection to few companies while neglecting others. It questions the criteria used to come up with names of companies that benefited from government funding. The writer posits that the government should never rush into funding or bailing out companies without proper examination in future. Efficient scrutiny helps in driving out bad behaviors in the governmental system.
The report by Valukas shows the top executive of Lehman cheating by making fake financial statements (Eavis, 2010). The findings keep at bay such practices to discourage fraud. The recent bailout of AIG suggests that the government needs to establish a proper bailout procedure to avoid the same scenario. The writer concludes that even though the suggestion will be met with a lot of hostility, it should be formalized to safeguard taxpayer’s money from misappropriations.
Brickley (2010) holds the same position with Sanati (2009) but contradicts Frangos’ (2008) and Beaudette’s (2010) ideas. He postulates that Lehman Brothers is in a process of forming a $15 million bonus pool for 2011 for about 175 workers. The attempt aims at transforming some of its derivatives deas into cash. At the time of its collapse, the company had 10,000 derivatives contacts amounting to over 1.7 million transactions.
The company has so far recovered $11 billion from the derivatives according to official reports from the court. The company has managed to obtain a bankruptcy-court approval intended to supply $50 million in bonuses. Its quest to setting up the 2011 bonus pool is affected by migration of workers to other companies.
The court helped the company by authorizing the reduction of bonuses due to voluntary departures of employees with only half remaining. The company is also in the process of trying to convince the court to allow reimbursement of $10 million in insurance proceeds to some of its former top executives in order to enable them pay the costs of legal suits.
The writer gives an opinion that the company is trying to fight for its comeback by first enticing the workers with bonuses. The columnist is proposing that in any company, workers are the most important elements because they are in charge of propelling the institution. This writer denies at all that company officials were partly to blame for the downfall of the bank. The writer blames the government for neglecting Lehman Brothers.
Liz and Rapoport (2010) in The Wall Street Journal alleged that Lehman Brothers sued an accounting firm by the name Ernst and Young for defrauding the bank. The Attorney General Andrew Cuomo is said to have accused the accounting firm for obtaining funds illegally from the defunct bank. Brickley and Sanati, arguing that the company could have salvaged itself before the crisis, hold this position.
The firm is accused of coming up with ghost figures that would make the company look to be in better position financially. The writer agrees with other columnists that the financial status of the bank were depleted long time ago although experts were not willing to expose this to the public. The columnist observes that the bank could have collapsed because of accounting issues unlike previous reports that suggested otherwise.
It is also established that the accounting firm had been benefiting from the proceeds of the bank during the good financial times enjoyed by the bank. The accounting firm in particular is accused of not giving proper advice to the bank in 2007 when Lehman transferred U.S securities to its London affiliate, the consultant never disclosed any fault in instead gave out clean audit accounts.
The columnist concludes that Lehman’s bankruptcy was the latest but more serious as far as problems are concerned. Both clients and employees seem to have slept on their jobs hence plunging the company into financial tribulations. Wall Street Journal Staff roundup summarizes the findings and events that had occurred following the company’s demise.
The findings are extracted from the bankruptcy-court examiner that was investigating the collapse of the company. It was found that top management played a bigger role in the plummet of the company. Senior officials in charge of balance sheet management and financial disclosure never took necessary steps. Other writers in both the Wall Street Journal confined these sentiments, including Liz, Rapoport, Eavis and Lattman.
They failed to expose the company’s utilization and extent of Repo 105, which could have aided in administering the balance sheet. Another finding was that Ernst and Young never acted professional in conducting research pertaining to Lee’s claims and concerning auditing and evaluation of Lehman’s financial statements.
Another reason that facilitated the bank’s demise is its misinformed policy whereby it focused on the Repo 105 market, in which companies dispose assets in exchange for money to erect projects in a few days or hours. The company is accused of being over-ambitious and non-considerate in identifying viable projects. The bank is reported to have been anxious in maintaining desired credit ratings making it look as if it had less debt on its books of accounts.
Even though the report states that the available evidence could possibly assist the collapsed bank find the truth, the allegation is not strong enough. J.P Morgan is mentioned in the report as one of the parties breaching the stipulated accord of good faith and fair-trading by engaging in too much collateral requests to Lehman in September 2008.
References
Beaudette, M. (2010). Lehman’s bankruptcy tab climbs. The Wall Street Journal. Web.
Brickley, P. (2010). Lehman seeks approval for bonus pool. The Wall Street Journal. Web.
Eavis, P. (2010). Lehman shows benefits of scrutiny. Web.
Frangos, A. (2008). At Lehman, how a real-estate star’s reversal of fortune contributed to collapse. Web.
Lattman, P. (2009). Lehman brothers plans private-equity spinoff. Web.
Liz, R. & Rapoport, M. (2010). Ernst accused of Lehman whitewash. Web.
Mannheim, K. (1996). The problems of ‘false consciousness’ and of the nature of reality henceforth take on a different Source: Karl Mannheim, Ideology and Utopia. London: Routledge.
Marx, K. & Engels, F. (2003). Communist manifesto. Rockville, MD: Wildside Press LLC.
Sanati, C. (2009). Lehman unit helps lift Barclays’ profit. Web.
Sergent, L. (2008). Contemporary political ideologies: A comparative analysis. Stamford, CT: Cengage Learning.
Weiler, K. (2001). Feminist engagements: Reading, resisting, and revisioning male theorists. London: Routledge.
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