Saturday, 11 December 2010

Too Big to Fail, the Book, and Inside Job, the Movie

I just finished reading/watching both of these (okay, I know I'm way late on "Too Big to Fail;" it's been a busy year). Some quick takeaways:

"Too Big to Fail" -- here's what particularly struck me in this fascinating fly-on-the-wall account (in fact, I've never read a more "fly on the wall" book than this one) of the events immediately leading up to the financial crisis in the fall of 2008:

* Christopher Cox, former SEC head: Inept. Clueless. Ineffectual. Stupid. It's truly mind-boggling just how bad this guy was.

* Speed dating, capitalism style: It was amazing how many mergers people were trying to engineer behind the scenes at the fever pitch of the crisis. Goldman buying Wachovia? Bank of America buying Lehman? And the Jewish mothers arranging the hookups were usually Hank Paulson and Tim Geithner (some banking executives even started calling Geithner eHarmony).

* The U.S. could have saved Lehman. Sure, you can parse all the differences between the Bear Stearns situation and Lehman's mess and make a lot of rationalizations for why the two were different -- but once Sorkin shows you how creative and frantic and ad hoc things were behind the scenes, you realize that grounds could have been concocted to save Lehman. The government just decided to draw a line in the sand and see what happened.

"Inside Job":

* If you've read a lot about the financial crisis, much of this film will be like "Sing Along with Mitch." You know the words, the characters, the plot, the outrage that's on slow simmer ...

* "Inside Job" is still a great film because, for my money, it makes its argument about what happened with the most coherence and the least distracting shrillness/gimmickry (plus, where else are you going to hear that old Ace Frehley classic "New York Groove" dusted off?)

* The film's original contribution is the spearing of the academic economists. Watching Glenn Hubbard's facade of reasonableness degenerate to hostility is revealing, as Ferguson pressures him about his connections to the financial industry. Even more unnerving though is watching Marty Feldstein, who seems amusedly detached and really doesn't appear to give a shit about all the havoc that ensued from flawed theories about economics and deregulation.