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!