HBO recently aired its movie Too Big To Fail, which covers the financial crisis of September/October 2008. The movie is based on Andrew Ross Sorkin's detailed, intimate history of the crisis. I haven't read the book, but I imagine (hope?) it contains stuff like this—
Ex-Goldman CEO Hank Paulson thought about the last time a woman had sucked him off. How pleasurable it had been. And now here he was, extorting the Congress for 700 billion dollars, a number he had made up out of thin air, telling them that if they didn't give the too-big-to-fail banks an epic blow job, the world would end next week. Nothing compared to this!
And now that we've got the Hollywood version starring William Hurt as Paulson, Paul Giamatti as Ben Bernanke and James Woods as Lehman CEO Dick Fuld, among many others in the all-star cast, the big banks are too glamorous to fail. I found a good review of the film by Charles K. Wilbur—
Let me share some reflections and reactions on watching the film twice.
1. The focus is on Wall Street and the financial crisis created by its rash risk-taking. Little to nothing is said about the real victims of their manipulations—the millions who became unemployed as a result and the millions who have lost or are about to lose their homes to foreclosure. This is like a movie about slavery that focuses on debates between slave owners and abolitionists while omitting the cruelties slave-owners visited upon their slaves...
4. The film ends shortly after the meeting with the nine banks. Bernanke and Paulson are in a room together and Bernanke asks, referring to the $125 billion capital infusion: "They will lend it out won't they?" Paulson quickly replies: "Of course they will!" He then slowly turns and looks out the window and more quietly says again: "Of course they will." The film ends with a series of statements appearing on the screen:
Following the passage of TARP, banks made fewer loans and markets continued to tumble.
Unemployment rose to over 10 percent and millions of families lost their homes to foreclosure.
In 2009 panicked markets stabilized and the slide into a global depression was averted.
The biggest banks repaid their TARP money.
In 2010, compensation on Wall Street rose to a record $135 billion.
Ten banks now hold 77 percent of all US bank assets.
They have been declared to be too big to fail.
The book and the HBO drama thus serve to solidify the comforting message that "panicked markets stabilized and the slide into a global depression was averted." All mainstream media commentaries on the financial crisis and the bailouts are careful to include this rationalization. You know, so the world makes sense to unschooled philistines like us.
Let's fast forward to May, 2011. The bailed-out banks are more consolidated, more powerful than ever before. They are now too bigger to fail. Unfortunately for the slaves, the risk that the slave-owners will run amok once again are enormous. Yahoo's Daily Ticker reports on why knowledgeable people are so worried.
In "Reckless Endangerment," co-authors Gretchen Morgenson and Josh Rosner examine the origins of the crisis, starting in the early 1990s. The co-authors pull no punches and aren't shy about placing blame... Having taken a long, hard look back, I [Aaron Task] asked Morgenson and Rosner about what worries them today and looking forward.
Too Big to Fail: Now, Even Bigger!
"We have even more 'too big to fail' institutions; more politically interconnected, very deep and wide institutions that could create another systemic event," says Morgenson, a Pulitzer Prize-winning columnist at The New York Times. "It's almost as if the situation that brought us to Fannie Mae and Freddie Mac having to be bailed out has now been squared or quadrupled. It's worse, not better."
Rosner, an analyst at Graham Fisher, wholeheartedly agrees.
"The risks are enormous" because there's even more concentration of assets among the biggest banks, which are "too big to analyze and manage," he says.
If the financial system was a "house of cards" before the crisis, the situation is worse today because back then investors had "some sense the numbers being given in annual reports and quarterly filings were accurate," Rosner says. "Now we know the government seems to be [complicit] in allowing them to fudge those numbers."
This is just what we would expect in a declining Empire, in a corrupt, failing society. Let's wait a few years before we proclaim that a global depression was averted. And what we have now is no walk in the park, notwithstanding that in 2010, compensation on Wall Street rose to a record $135 billion.
First we've got the trailer to the HBO movie, and then the interview with Morgenson and Rosner. I hope you'll take the time to watch both.
Watched the movie, didn't like it--for many of the some reasons you mention above. It nearly made Paulson/Geithner into 'heroes' of a sort, and completely neglects any real world fallout--its Wallstreet-Centric to the maximum. Plus the bit about the economy being saved is sort of a joke. Sure, it kicked the can down the road for a little while, and helped make the top 1-2% very rich as the middle class gets eviscerated.
The acting was good, but ultimately watching this film for the uneducated viewer--likely would just re-affirm its ultimate success.
I just watched and NPR piece with Charlie Rose with Nobel price winning economists talking straight faced about China/India GDP doubling in 15 years and all other kinds of nonsense. Do you have to be totally ignorant of the environment/resources/over-population/water depletion/desertification/peak oil etc to be an economist?!?!
Bah!
Posted by: Mitch | 05/30/2011 at 01:17 PM