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The Big Short is a Great Movie, But…
The Big Short is a Great Movie, But…
Paris — Michael Lewis is the chronicler of Wall Street. He takes the complexity behind which the inhabitants of the financial world hide and weaves a tale that is both understandable and compelling. Starting with the classic “Liars Poker” (1989), Lewis has produced a number of books about the financial markets including “Flash Boys: A Wall Street Revolt” (2014) and “The Big Short: Inside the Doomsday Machine” (2010). Working with director Adam McKay and some great actors and screen writers, Lewis has managed to produce what is perhaps the most accessible and relevant treatment of the mortgage boom and financial bust of the 2000s, and the subsequent 2008 financial crisis.
The beauty of “The Big Short,” both as a movie and a book, is that it provides sufficient detail to inform the general audience about events and issues that are not part of everyday life. Wall Street is a secretive place, but “The Big Short” manages to convey enough of the details to make the story credible as a journalistic effort, yet also enormously entertaining. Lewis does this with two essential ingredients of any film: a simple story and compelling characters.
Images of greed and stupidity are presented like Italian frescos in “The Big Short,” pictures that are memorable and thought provoking. Indeed, what many people know and remember years from now about the 2008 financial crisis will be shaped by creative efforts such as “The Big Short” for the simple reason that Lewis has simplified the description into a manageable portion. Unlike hedge fund manager Michael Burry (played by Christian Bale), most people lack the patience and expertise to sift through and understand reams of financial data.
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Gretchen Morgenson: Wall Street Really Does Enjoy a Different Set of Rules Than the Rest of Us
Gretchen Morgenson: Wall Street Really Does Enjoy a Different Set of Rules Than the Rest of Us
Gretchen Morgenson has earned a Pulitzer-winning career from exposing abuse and conflicts of interest on Wall Street. In this interview, she confirms that there is indeed a second set of rules enjoyed by our elite financial institutions, largely unfettered by the constraints that apply to the rest of us.
Consequences for failure and fraud are very different under this second set of rules — in fact, they’re practically rewarded. Accountability, by all prudent measures, has become non-existent. The extraordinary measures the U.S. deployed to deal with the great contraction in 2008 only served to exacerbate these imbalances.
What’s sorely needed now is a national dialogue on whether we’re willing to allow this to continue. What benefits are we receiving by enabling these elite to enjoy such different standards? What type of system and rules might work better for our interests?
Sadly, beyond the disorganized Occupy Wall Street outrage that has waned in visibility, there is no real cogent, organized public debate focused on this right now. A big reason is that Washington is actively avoiding such a dialogue. It was fundamentally complicit in creating the underlying factors resulting in the ’08 collapse and it doesn’t want brighter light helping the public understand that more clearly.
As a populace we have a decision to make: Are we going to get more engaged and start articulating the reform we want to see? For if not, we’re making a passive decision to allow the wealth gap to widen further.
In the meantime, Gretchen sees a lot of instability in financial markets that have been allowed to balloon further even though the underlying causes of the ’08 crash haven’t been resolved. She cautions investors to avoid risk (despite the Fed’s encouragements), pay down debt, and have a defensive plan in place should the markets suffer another serious correction in the near future.
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