I'm almost ten years late to the game with this one, but I just finished Andrew Ross Sorkin's Too Big To Fail and feel compelled to jot down some notes before I forget. In my defense, at the time the book came out I was in all likelihood a little preoccupied with switching from Myspace to Facebook and how to finagle my way into as many AP classes as possible at the time, since I was all of fifteen years of age.
Embracing economic literacy: better late than never.
The book is a sprawling who's who of big finance, with major Wall Street CEOs having meltdowns and brokering top dollar deals to save their firms as the regulators in the mix try frantically to save the global economy.
I won't summarize in too much detail, but the book essentially reads like a dialogue-driven screenplay of the first year the economy began teetering before what became The Great Recession. The book opens in medias res. Bear Stearns gets hit first and is bought by JPMorgan on the cheap. Lehman follows, infamously combusting as the federal government stood by to make an example of the storied firm. AIG gets rescued while Merrill Lynch gets scooped up by Bank of America. Goldman guys have their tentacles everywhere and JPMorgan execs (along with institutions and funds from Korea, Japan and China) are implored to buy up the weaker firms by desperate executives and regulators alike. Armies of bankers, lawyers and Treasury staffers are flown back and forth desperate to facilitate deals and get a handle on the scope of the mess. Wall Street big wigs and political figures cry, vomit and curse throughout the hundreds of pages of plot. The whole narrative is a riot and would appear to be a fictitious HBO special of backstabbing, cunning and absurd amounts of money if it weren't for the fact that Sorkin is a well-known Times financial reporter with deep Wall Street connections who's clearly clocked in hundreds of hours to recreate the live action piece by piece. His access to these big players is the meat of the book and a major feat in itself.
Suffice it to say this might be the only 600-page book on finance I sped through. (Or is it the only one I've ever read? Not unlikely.)
Either way, a few thoughts in defense of the tome against snarky Goodreads critiques and outraged liberals (of which I'm usually one, mind you) who balk at the lack of political analysis indicting our Big Swinging Dick protagonists:
- It makes sense that Sorkin would write *the* book on the financial implosion that only Sorkin, with his inside connections, could write. He's no economist or financier. He's not going to regale us with the dry technicals of what economic & deregulatory factors contrived to combust our economy. If he's going to write a book, it's gotta be one driven by some pretty juicy narrative detail that could only come from those who sat in on the conference rooms where it all unfolded. The book zooms in on the figurative trees in lieu of a forest view—and I'm pretty glad it does, because God knows we've had a glut of abstract commentary on the crisis since then from all corners, and by sources far more credentialed in their fields.
- Of the insights that can be gleaned, I'd argue that the economic/financial analyses, which are thin but extant, are secondary to the takeaways on how the world of finance really works. The behind-the-scenes is illustrative for anyone who wants to know how modern capitalism works. Its biggest levers aren't just "invisible hands" or efficient markets, but deep-pocketed men who are, in turns, flawed, vulnerable, aggressive, ego-driven, masterful, confused, and altogether human. Also, the extent to which economy-shaping decisions are made on the basis of relationships is both staggering and yet totally unsurprising. But a valuable reminder nevertheless. Even the backstories of the big financiers is steeped in the timelines of their relationships and mentorships. Duly noted.
- There may be some value to the nuance, both moral and political, to be gleaned from the narrative. Given the incentives and short-term situational contexts presented to each "character," it makes sense why they would have made the decisions they did. And yet the relatively harmless actions of the many—whether CEOs or regulators or investment bankers—in aggregate become disastrous and long-term irrational. I'm inclined to think inequality is one of the most pressing issues of our society and that financial capitalism run amok is a cyclical time bomb waiting to detonate to the detriment of the rest of us, just like any good left-winger. But it's also hard for me personally to harbor fierce judgment of anyone when I see them up close, even a little bit. I don't believe in villains. It doesn't help that the author seems to suffer from his own subtle romanticization of finance with its power and riches and machismo, which becomes maybe a bit contagious, but seeing it all play out I gotta admit: it looks pretty mighty. Easy to see how the prospect of such influence could seduce the mere mortals among us.
Would love to read the seminal precursor to this book, Barbarians at the Gate. Not sure if it'll feel as relevant, being a few decades older, but have heard great things. If I read, will follow up with some similarly ambling thoughts.