In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
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In HBO’s ‘Too Big
to Fail,’ the Heroes
Are Really Zeroes
May 25, 2011 | Governance & Compliance, Regulation &
Legislation
Polls
Which of the
following is the
most
important
current
corporate
responsibility
issue?
Corporate
Governance
Environmen
t
Executive
Compensati
on
by Jesse Eisinger, Pro Publica
HBO’s “Too Big To Fail”—I just caught up with it last night;
thank you, HBO On Demand—is extraordinarily revealing
about the financial crisis. Only its revelations are almost
Global
Economy
Human
rights
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
2 of 8
entirely inadvertent.
The movie is set up in the
Hollywood conventional way: A
gang of misfits, each with a
special expertise, is brought
together for an impossible
mission. There’s Treasury Secretary Henry Paulson,
steely eyed at the moment of truth. There’s New York
Federal Reserve head Timothy Geithner, the athlete (he
doesn’t just jog, but also plays what appears to be
squash). And then there’s Federal Reserve chairman Ben
Bernanke, the professor with a heart of gold and secret
knowledge of the Great Depression.
Vote
View Results
Polls Archive
Join Our
Mailing List
If you’d like to
receive our email
newsletter, you
can sign up here.
Subscribe
Ostensibly it’s a story of their success against all odds.
Michael Kinsley, reviewing the movie in the New York
Times, labeled Hank Paulson the “hero” of the account.
Except that the movie actually depicts something entirely
different: failure upon failure. “Too Big To Fail” The Movie
isn’t the story of how the Three Musketeers saved the
global economy. It’s a story of how the three didn’t see
the financial crisis coming; hadn’t prepared for it; made
mistake after mistake as it was cresting; and then, in
their moment of triumph, made their most colossal
blunder of all.
That, it turns out (whether or not “Too Big To Fail” knows
it), is the true story of the financial crisis.
How much did Curtis Hanson and the writers mean for
that to be the story? Throughout, the characters drop
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
3 of 8
hints about their missteps, but the plot unfolds like a
financial “Die Hard,” with our intrepid heroes battling
fiendishly powerful forces toward a happy ending. (Full
disclosure in this era of transparency: I write a regular
column for DealBook, the New York Times section edited
by Andrew Ross Sorkin, the reporter upon whose book
the movie was based.)
Early on, Paulson complains to his staff that they have
been behind on everything as the crisis began to emerge.
And that’s true! The crisis actually started in the late
summer of 2007. Paulson’s first effort, late that year, was
to get a bunch of banks to assemble a giant off-balancesheet concoction that would save each individual bank’s
off-balance-sheet monstrosity. It was a complete flop.
In the movie, as bankers and government officials
frantically try to save Lehman, Chris Flowers, the private
equity investor and banking impresario, is depicted as
informing Paulson and Geithner that AIG is teetering on
the edge. In their fumbled response, he immediately
grasps the truth. “They’re not on top of it,” he tells a
confederate.
And they weren’t. In real life, AIG had been struggling
since the middle of 2007. Paulson and Geithner of
course had some inkling of the problems at the world’s
largest insurer. But they didn’t prepare for it.
In the movie, the chief executive of General Electric, Jeff
Immelt, places a terrified call to Paulson saying that GE
can’t borrow. GE is standing in for every Real American
manufacturing company. We are reminded it makes light
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
4 of 8
bulbs and washing machines. Paulson is shocked that
such a stalwart could be having trouble borrowing.
The reality, of course, is that GE was more a finance
company than a manufacturer and was teetering
because it financed those operations with billions of
short-term borrowing. It is also true that Paulson,
Bernanke and Geithner had no inkling of GE’s troubles
until the very last moment and therefore had no plan to
deal with it.
Plans are, in the movie, almost nonexistent. The team of
heroes races from crisis to crisis, as Bond goes from
chase scene to babe, eventually stumbling on the evil
SPECTRE plot to take over the world. Intentionally or not,
the movie is echoing real life.
Despite warning signs, Paulson, Geithner and Bernanke
had no evident plans throughout the last half of 2007 and
the first eight months of 2008. Not for how to resolve
Lehman after Bear Stearns’ collapse, not for AIG, not for
recapitalizing the banking system.
Indeed, they asked Congress for $700 billion to
implement the Troubled Asset Relief Plan to buy toxic
assets from the banks, and then, without any further
discussion, abandoned that idea and injected capital into
the banks. Many economists and financial experts had
been urging them to do just that, but when they finally hit
on that as a solution, it was so poorly thought out that
they gave the money to the banks on overly generous
terms.
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
5 of 8
This moment is depicted at the end of the movie, and
because it is both a triumph in the conventional narrative
sense, but also a major mistake by our heroes, it is the
point at which the movie is most cognitively dissonant.
Paulson, Bernanke and Geithner have finally come to
their solution: Put capital in the banks. They gather
outside the boardroom where they are going to confront
the CEOs.
For purposes of dramatic tension, we have to see their
nervousness that the deal won’t go through. The
Treasury secretary and the two most powerful central
bankers in the country are about rescue these CEOs and
their institutions from their own recklessness, yet they
cower in fear of rejection.
Of course, this rings true because the government drove
awful bargains. In the aftermath of the greatest credit
bubble in history, it protected creditors at almost every
turn. The government gave the banks money but didn’t
get voting rights and didn’t prevent the banks from using
the money to pay dividends or bonuses. They wrote what
was essentially a blank check. In real life, Warren Buffett
got much better terms when he invested in Goldman
Sachs.
What is the audience to make of these scenes? Paulson,
our supposed hero, insists that if the government puts
any restrictions on the money, “They won’t take it!”
It’s left to the hapless PR woman, played by Cynthia
Nixon (who has, moments earlier, had the crisis
explained to her in words of one syllable for the sake of
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
6 of 8
her, and the audience’s, simple minds), to wonder why, if
the government is saving these institutions, it couldn’t
impose any limits on how the money be used.
The banks do take the money, of course. They have no
choice by the conventions of Hollywood. Nor did they in
real life, something that the Three Musketeers never fully
appreciated.
After the scene, the Big Three gather in a room, relieved,
and Bernanke asks, “They will lend the money out, won’t
they?” The director, Curtis Hanson, focuses in on
Paulson, who gazes out the window, as if contemplating
the question for the first time. He insists they will. But an
unmistakable moment of doubt passes across his face.
Fade to the postscript. There we learn that, whoops, the
banks didn’t lend it out after all. Instead, they got bigger,
banker bonuses recovered, and Wall Street is getting
bottle service at velvet-roped clubs all over again. The
world was saved from ruin, but the banks quickly went
back to business as usual and even felt self-righteous
about it.
Jesse Eisinger is a senior reporter at ProPublica,
covering Wall Street and finance. In April 2011, he and
Jake Bernstein were awarded the Pulitzer Prize for
National Reporting for a series of stories on questionable
Wall Street practices that helped make the financial crisis
the worst since the Great Depression.
ProPublica is an independent, non-profit newsroom that
produces investigative journalism in the public interest.
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
7 of 8
This article is republished with permission under a
Creative Commons license.
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In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
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April 20, 2012
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February 4, 2010
© Copyright 2021 Business Ethics
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June 9, 2011
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June 7, 2013
8/3/21, 11:42 AM
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In HBO’s ‘Too Big
to Fail,’ the Heroes
Are Really Zeroes
May 25, 2011 | Governance & Compliance, Regulation &
Legislation
Polls
Which of the
following is the
most
important
current
corporate
responsibility
issue?
Corporate
Governance
Environmen
t
Executive
Compensati
on
by Jesse Eisinger, Pro Publica
HBO’s “Too Big To Fail”—I just caught up with it last night;
thank you, HBO On Demand—is extraordinarily revealing
about the financial crisis. Only its revelations are almost
Global
Economy
Human
rights
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
2 of 8
entirely inadvertent.
The movie is set up in the
Hollywood conventional way: A
gang of misfits, each with a
special expertise, is brought
together for an impossible
mission. There’s Treasury Secretary Henry Paulson,
steely eyed at the moment of truth. There’s New York
Federal Reserve head Timothy Geithner, the athlete (he
doesn’t just jog, but also plays what appears to be
squash). And then there’s Federal Reserve chairman Ben
Bernanke, the professor with a heart of gold and secret
knowledge of the Great Depression.
Vote
View Results
Polls Archive
Join Our
Mailing List
If you’d like to
receive our email
newsletter, you
can sign up here.
Subscribe
Ostensibly it’s a story of their success against all odds.
Michael Kinsley, reviewing the movie in the New York
Times, labeled Hank Paulson the “hero” of the account.
Except that the movie actually depicts something entirely
different: failure upon failure. “Too Big To Fail” The Movie
isn’t the story of how the Three Musketeers saved the
global economy. It’s a story of how the three didn’t see
the financial crisis coming; hadn’t prepared for it; made
mistake after mistake as it was cresting; and then, in
their moment of triumph, made their most colossal
blunder of all.
That, it turns out (whether or not “Too Big To Fail” knows
it), is the true story of the financial crisis.
How much did Curtis Hanson and the writers mean for
that to be the story? Throughout, the characters drop
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
3 of 8
hints about their missteps, but the plot unfolds like a
financial “Die Hard,” with our intrepid heroes battling
fiendishly powerful forces toward a happy ending. (Full
disclosure in this era of transparency: I write a regular
column for DealBook, the New York Times section edited
by Andrew Ross Sorkin, the reporter upon whose book
the movie was based.)
Early on, Paulson complains to his staff that they have
been behind on everything as the crisis began to emerge.
And that’s true! The crisis actually started in the late
summer of 2007. Paulson’s first effort, late that year, was
to get a bunch of banks to assemble a giant off-balancesheet concoction that would save each individual bank’s
off-balance-sheet monstrosity. It was a complete flop.
In the movie, as bankers and government officials
frantically try to save Lehman, Chris Flowers, the private
equity investor and banking impresario, is depicted as
informing Paulson and Geithner that AIG is teetering on
the edge. In their fumbled response, he immediately
grasps the truth. “They’re not on top of it,” he tells a
confederate.
And they weren’t. In real life, AIG had been struggling
since the middle of 2007. Paulson and Geithner of
course had some inkling of the problems at the world’s
largest insurer. But they didn’t prepare for it.
In the movie, the chief executive of General Electric, Jeff
Immelt, places a terrified call to Paulson saying that GE
can’t borrow. GE is standing in for every Real American
manufacturing company. We are reminded it makes light
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
4 of 8
bulbs and washing machines. Paulson is shocked that
such a stalwart could be having trouble borrowing.
The reality, of course, is that GE was more a finance
company than a manufacturer and was teetering
because it financed those operations with billions of
short-term borrowing. It is also true that Paulson,
Bernanke and Geithner had no inkling of GE’s troubles
until the very last moment and therefore had no plan to
deal with it.
Plans are, in the movie, almost nonexistent. The team of
heroes races from crisis to crisis, as Bond goes from
chase scene to babe, eventually stumbling on the evil
SPECTRE plot to take over the world. Intentionally or not,
the movie is echoing real life.
Despite warning signs, Paulson, Geithner and Bernanke
had no evident plans throughout the last half of 2007 and
the first eight months of 2008. Not for how to resolve
Lehman after Bear Stearns’ collapse, not for AIG, not for
recapitalizing the banking system.
Indeed, they asked Congress for $700 billion to
implement the Troubled Asset Relief Plan to buy toxic
assets from the banks, and then, without any further
discussion, abandoned that idea and injected capital into
the banks. Many economists and financial experts had
been urging them to do just that, but when they finally hit
on that as a solution, it was so poorly thought out that
they gave the money to the banks on overly generous
terms.
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
5 of 8
This moment is depicted at the end of the movie, and
because it is both a triumph in the conventional narrative
sense, but also a major mistake by our heroes, it is the
point at which the movie is most cognitively dissonant.
Paulson, Bernanke and Geithner have finally come to
their solution: Put capital in the banks. They gather
outside the boardroom where they are going to confront
the CEOs.
For purposes of dramatic tension, we have to see their
nervousness that the deal won’t go through. The
Treasury secretary and the two most powerful central
bankers in the country are about rescue these CEOs and
their institutions from their own recklessness, yet they
cower in fear of rejection.
Of course, this rings true because the government drove
awful bargains. In the aftermath of the greatest credit
bubble in history, it protected creditors at almost every
turn. The government gave the banks money but didn’t
get voting rights and didn’t prevent the banks from using
the money to pay dividends or bonuses. They wrote what
was essentially a blank check. In real life, Warren Buffett
got much better terms when he invested in Goldman
Sachs.
What is the audience to make of these scenes? Paulson,
our supposed hero, insists that if the government puts
any restrictions on the money, “They won’t take it!”
It’s left to the hapless PR woman, played by Cynthia
Nixon (who has, moments earlier, had the crisis
explained to her in words of one syllable for the sake of
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
6 of 8
her, and the audience’s, simple minds), to wonder why, if
the government is saving these institutions, it couldn’t
impose any limits on how the money be used.
The banks do take the money, of course. They have no
choice by the conventions of Hollywood. Nor did they in
real life, something that the Three Musketeers never fully
appreciated.
After the scene, the Big Three gather in a room, relieved,
and Bernanke asks, “They will lend the money out, won’t
they?” The director, Curtis Hanson, focuses in on
Paulson, who gazes out the window, as if contemplating
the question for the first time. He insists they will. But an
unmistakable moment of doubt passes across his face.
Fade to the postscript. There we learn that, whoops, the
banks didn’t lend it out after all. Instead, they got bigger,
banker bonuses recovered, and Wall Street is getting
bottle service at velvet-roped clubs all over again. The
world was saved from ruin, but the banks quickly went
back to business as usual and even felt self-righteous
about it.
Jesse Eisinger is a senior reporter at ProPublica,
covering Wall Street and finance. In April 2011, he and
Jake Bernstein were awarded the Pulitzer Prize for
National Reporting for a series of stories on questionable
Wall Street practices that helped make the financial crisis
the worst since the Great Depression.
ProPublica is an independent, non-profit newsroom that
produces investigative journalism in the public interest.
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
7 of 8
This article is republished with permission under a
Creative Commons license.
SHARE THIS:
SHARE:
!
(
Previous
Opinion: ESG Yields Profits
”
)
%
*
&
‘
#
+
Next
SEC Adopts Final Whistleblower
Rules
8/3/21, 11:42 AM
In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes | Business Ethics https://business-ethics.com/2011/05/25/in-hbos-too-big-to-fail-the-heroes…
8 of 8
Topics
Related Posts
The Magazine of Corporate Responsibility
About
Disclosure
Opinion: A
Punishment
BP Can’t Pay
Off
April 20, 2012
Bank of
America
Settles With
SEC as NY AG
Brings New
Charges
February 4, 2010
© Copyright 2021 Business Ethics
All rights reserved
Home Depot
Political
Donation
Resolution
Results
Reported
June 9, 2011
Contact
OSU
President’s
Departure
Raises
Questions
About
Leadership
Values
June 7, 2013
8/3/21, 11:42 AM
Purchase answer to see full
attachment
