There’s a popular kind of Hollywood film in which a David–a whistle-blower, an investigator, a journalist, a cop–takes on a Goliath, a big corporation, say, or the government, finding and exposing malfeasance and corruption. Concussion, and Spotlight, neither of which I’ve seen yet, are presumably examples of this kind of film. Erin Brockovich, The Insider, Mr. Smith Goes to Washington, The Pelican Brief, All the President’s Men; like me, you can probably name twenty of them off the top of your head. They are filmic equivalents of this, from Ecclesiastes: “the race is not to the swift, nor the battle to the strong.” They encourage underdogs; they’re idealistic in a healthy way. Or, to put it cynically, they serve Hollywood’s favorite narrative; that movie stars can solve absolutely anything.
The Big Short, based on Michael Lewis’ non-fiction best-seller and directed by Adam McKay, is essentially that kind of story. It’s about a small group of social misfits, most of whom did not know each other, who separately concluded that the most profitable and stable sector in the US economy was so criminally and foolishly mismanaged that it was likely to collapse. They were all investors and did what investors do; they invested. They shorted real estate. They made a few ineffectual attempts to go to the press, to inform relevant government regulators, to let people know, but their warning was so seen as so preposterous that they were almost uniformly laughed at and ignored. So they laid their money on the table and placed their bets. And became very very rich.
It’s an exuberant film, a film made with tremendous meta-cinematic confidence and elan; for most of the film, it’s a rolicking comedy. McKay sets himself the task of explaining highly technical financial instruments and concepts in a way that will both amuse and instruct. At times, actors face the camera and address the audience directly. At one point, we’re told that Margot Robbie will explain a difficult concept, from her bubble bath. Sure enough, there’s Robbie, in her bath, sipping champagne and explaining things. Or Louis Jourdan, explaining CDO’s using chopped halibut. It’s a terrifically entertaining film, energetic and funny. Then it stops being funny. And when it was over, I felt angry. Furious, frustrated, and heartsick.
Christian Bale plays Dr.Michael Burry, an Asperger’s-afflicted neurologist-turned-financial analyst, founder of Scion Capital LLC, a hedge fund. Bale is quite brilliant in the role, capturing Burry’s obsessive insistence on insane amounts of research, leading him to conclude that the bundled mortgage bonds that were the hottest investments on earth were built on the shakiest of foundations. Burry works to a cacophany of heavy metal music, doesn’t wear shoes, and plays the drums for release. He can also barely stand to deal with other people, most especially including his many investors. When he approaches Wall Street bankers, asking if he can short real estate, he can barely bring himself to speak. They can barely contain their laughter. Oh, sure, we’ll let you short real estate. We’ll call the instruments ‘credit default swaps.’ Why not? What could go wrong. Heh heh heh.
Over the course of the film, Burry makes billions of dollars for his investors, investors who are busy suing him for using their money so irresponsibly. In the end, they’re wrong, and he’s right. It brings him no joy.
The film also depicts the relationship between Mark Baum (Steve Carell) and Jared Vennett (Ryan Gosling), who meet through a wrong number. Baum was also astonishingly eccentric; a kid that got kicked out of schul by his rabbi, not because he wouldn’t study Torah, but because he was only interested in disproving it. Carell’s amazing in the role. Baum initially can’t believe that the real estate markets could possibly be as unsound as Vennett presents them as being, and so, with his assistants, goes on a trip to Florida. At one point, they meet a stripper, who tells them that she owns five homes, plus a condo, all mortgaged to the hilt. Because how could that possibly go wrong? At one point, as Baum meets with two insanely clueless mortgage brokers, who are describing the felonious ways in which they’re selling houses, he turns to one of his assistants and says ‘I don’t get it. Why are they confessing?’ ‘They’re not confessing,’ says the assistant. ‘They’re bragging.’
The film’s third story involves two small garage-band investors, Charlie Geller (John Magaro) and Jamie Shipley (Finn Wittrock), who have one contact in the financial world, Ben Rickert (Brad Pitt), a former neighbor. Rickert doesn’t invest anymore–he’s become a healthy foods fanatic–but he’s willing to lend a hand. For the most part, people like Baum and Burry were buying default swaps on bonds rated B. Geller and Shipley can’t break in at that level. So they begin buying swaps on bonds rated AA. Those bonds, it turns out, are every bit as rotten as higher rated ones. They get rich too.
And they dance in celebration. They cavort, joyously. And Brad Pitt, as Rickert, stops them. (Brad Pitt’s doing this lot these days; producing and playing a small part in important films, to get them made). Reminds them that they bet against the US economy. Against the world’s economy. That their fortune is built on people losing their homes, their retirement plans, their pensions, their savings. That they are dancing on the grave of the American financial system. That their good cheer is, perhaps, a trifle unseemly.
And in the end, Gosling, as Vennett, tells us, we Americans gained in wisdom what we lost in money. Hundreds of investment bankers went to jail. Serious financial reforms were enacted by a Congress shocked into regulatory good sense. At least it will never happen again. Bad as it was, we learned our lesson. Whew.
No. None of that happened, as Vennett knows well, and as we all know. (Michael Burry is still around; he says it’s likely to happen again). As Gosling cashes a check for half a billion dollars, Vennett, rather defensively, tells us he’s not the bad guy here. It was everyone. It was mortgage brokers writing the paper for loans they knew their clients had no possibility of repaying. It was bonds rating agencies asleep at the wheel. It was SEC regulators seeing their job as a stepping-stone to a better paying one at Goldman Sachs. It was Goldman Sachs. Bear Stearns; Lehman. It was a system either crooked, or stupid, or both.
And that’s the central question, isn’t it? Was the financial system’s collapse the result of criminality or imbecility? Were they all crooks? Or morons? Not all banks and not all bankers. But enough. Also Republicans; they’re to blame–they oppose bank regulation. And Democrats–the repeal of Glass Steagal was signed into law by Bill Clinton. We all had skin in the game, and we all got skinned.
The Big Short is a brilliant film about the world-wide financial crisis. Its heroes are as morally implicated as its bad guys, and nothing good happens. David slays Goliath, and is crushed by his fall. And then both armies advance, and the slaughter is universal. Somehow, McKay captures that too.