Too Big To Fail, the movie

By Felix Salmon
May 11, 2011

Over the weekend I watched the HBO movie version of Too Big To Fail, and I talked to Andrew Ross Sorkin about it on Monday.

As you can probably tell from the movie trailer, it’s got lots of dramatic music and equally dramatic moments — Paul Giamatti (Ben Bernanke), for instance, telling a room of assembled politicians that he’s spent his entire academic career studying the Great Depression, and that “if we do not act, boldly and immediately, we will replay the depression of the 1930s. Only this time, it will be. Far, far worse.”

It’s a curious fish, this film: there are so many white guys in suits that unless you already know the story going in it’s pretty much impossible to tell who’s who — with the exception of the lead character, Hank Paulson, played with searing intensity by William Hurt. And this isn’t the story of the crisis — for that, the Oscar-winning Inside Job will serve you much better. This is just the story of the short period of time during which Lehman collapsed, AIG was bailed out, and TARP got enacted.

What I worry about is that with the movie concentrating on a brief period of time — just one month in the course of a crisis which started much earlier and ended much later — the public will continue to think of TARP as the defining bailout and government action of the crisis. In reality, however, monetary policy was much more important than fiscal policy, and TARP wasn’t even the most effective fiscal policy — that was the Obama stimulus package which was pushed through in early 2009.

The movie is also a combination of too complicated and too simple. It’s too complicated in that there are too many characters and it’s hard to keep them all straight, and the occasional kludgy attempt at explaining, say, why AIG collapsed falls very flat. And it’s too simple because the corners that were cut turn out to create misleading impressions — that Warren Buffett was willing to buy into Lehman Brothers at $40 per share, for instance, or that the Chinese government was a significant shareholder in Frannie.

But the fact is that even though the financial crisis really did threaten the global economy, it wasn’t really a thrilling human drama. As Lloyd Blankfein says to his chief of staff Russell Horwitz, “You’re getting out of a Mercedes to go to the New York Federal Reserve, you’re not getting out of a Higgins Boat on Omaha Beach. Keep things in perspective.” If you want a thrilling drama, then Hollywood is good at making those. And if you want to understand the financial crisis, this film is too constrained in time to really explain what happened. So I’m not sure really what the film is good for, beyond providing some welcome money for financial journalists like Sorkin, Joe Nocera, and Bethany McLean. I’m all in favor of that!

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6 comments so far

There are already enough economists stupid enough to believe that TARP was the end of bailing out the banks; what harm will it do if they are joined by others who have less of a reason to know better?

Posted by klhoughton | Report as abusive

After reading the book, I definitely thought it would be better served as a 4-part miniseries than a two hour feature-length TV movie.

By what possible analysis do you conclude that the Obama stimulus was more effective than TARP at stemming the financial crisis?

Posted by right | Report as abusive

Neither the stimulus nor TARP did anything worthwhile. Heck, the only government remedies that have done any good have been of the hair-of-the-dog variety.

For a time, in late 2008, the SEC banned the short selling of financial industry stock, effectively prohibiting pessimism.

In December, the Federal Reserve lowered the federal funds rate to a range betweenb 0% and 0.25%, record territory.

Since then, a series of actions that the FASB has taken uynder political pressure has gutted any pressures toward marking assets to market. This has allowed banks to return to the practice of playing make-believe with their “Tier 3″ asset valuations.

Such measures as those have probably let the alcoholic get through the morning in hopeful anticipation of getting to another party later tonight. A really lousy way to live, but the other measures you’ve been mentioning are just irrelevancies.

The only sensible course for our alcoholic bubble-dependent economy is … cold turkey quitting. This requires things like an end to the legal tender laws. But that in turn will require pain, discipline, courageous politicians.

Never mind.

Posted by Christofurio | Report as abusive

hey man, reporters deserve a payday too!

Why should they stand by and merely report upon Wall Street’s recycling & repackaging & marketing of ‘toxic wastes’ when they can do the same thing with their old newspaper clips & interview notes?

The bid from moviegoers greedy for any kind of explanation of the meltdown has never been higher. Now is the time to meet that demand with product.

So why begrudge members of the fourth estate for doing only what their Wall Street brethren did (when they created synthetic CDOs): they’re both trying to sell the highs by offering crap to consumers too dumb to know any better.

Do you think they’ll be more interest in the meltdown as the years go by? I think not. You’ve gotta strike while the iron’s hot.

Me, I’m waiting for someone to make a film of the WaMu case study in the Levin/Coburn report. Now THAT’s a human drama.

Maybe Brad Pitt’s option on “The Big Short” for the big screen will draw on the FCIC Report?

naah, not likely.

Posted by dedalus | Report as abusive

I agree with the author’s thoughts on the attention paid to the TARP period as misleading the uninformed into thinking that was the entirety of the ‘big deal’.

However, it’s important to enlighten the uninformed as much as possible. Wall Street got away with creating and profiting from a few closely related bubbles and transferring the risk, losses and pain to American taxpayers precisely because not enough average citizens were really cognizant of what was really happening.

That said, I’m sure that most of the people who rush out to see “Thor” at the theaters do not have “Too Big to Fail” on their ‘must see’ list.

Maybe they will see it on late night TV next year when they have already seen all the movies that are playing in the same time slot.

Posted by breezinthru | Report as abusive

only what their Wall Street brethren did (when they created synthetic CDOs): they’re both trying to sell the highs by offering crap to consumers too dumb to know any better.

Posted by mapitravel083 | Report as abusive
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