The Unexpected Lessons of HBO's "Too Big To Fail"

Karl Marx said that history repeats itself, first as tragedy, then as farce. But if he were writing today, he might insert one new stage in between -- as a movie. Through theatrical releases and made-for-television productions, prestige projects from HBO to Lifetime's latest portrayal of some woman who has been seduced and betrayed and then learned for fight back to triumph over an abuser, this is how we now process the world around us.

Feature films based on Bernie Madoff's Ponzi scheme, John Edwards' affair, and the raid of Osama Bin Laden's compound are in the works. If newspapers are the first draft of history, movies are the second.

Too Big to Fail is part of this tradition, with an all-star cast and an Oscar-winning director. It is based on the award-winning book by Andrew Ross Sorkin of the New York Times, a tome most notable for its astonishingly meticulous detail but produced too soon after the original George W. Bush-era $700 billion bailout for any meaningful analysis.

The financial crisis in just two hours
The film, produced nearly three years later, benefits from some more perspective and the chance to see how some of the decisions played out. And it benefits from the discipline of having to jettison anything that couldn't fit in a two-hour running time or that might be too complicated for people who don't know the difference between J.P. Morgan and Morgan Stanley.

And so, it falls right where it should, halfway between tragedy and farce. Pro Publica's Jesse Eisinger says the film's "inadvertent" lesson is that its intended heroes were failures:

"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.

Inept and overmatched
I'm not giving away any surprises here when I say that while the movie ends on a moment of hope, the final lines have Treasury Secretary Hank Paulson recognizing that he had forced the financial services companies to take the money but failed to extract any commitment from them to lend it out. "They'll use it the way we want, won't they?" he asks, and a crawl before the final credits reminds us that they did not. The only way he looks like a hero is in comparison to the other characters -- the politicians (especially George W. Bush and John McCain) and the men on Wall Street.

As Paulson goes everywhere like the Little Red Hen asking for help making his cake, he is met by Wall Street executives who are deep in denial, ego-centric, thuggish, and utterly self-centered. The movie is frank in portraying the absence of any basis for anybody's numbers, whether in valuing the cratering assets of an investment bank or deciding whether to ask Congress for something less scary than a trillion dollars.

And it is equally frank in portraying Wall Street as unwilling to take responsibility, morally or financially, for the mess. "What do I say when they ask me why [the subprime derivatives] weren't regulated?" asks one character. "No one wanted it. We were making too much money," Paulson answers. That is as close as we get to any accountability, and that is enough to make the movie worth watching.

One of the most telling elements of the movie is the near-absence of the boards of directors of the public companies at the heart of the meltdown. We get one brief glimpse of the board of Lehman, all but mute as they wait to be told what to do. The failure of the regulators to insist on replacing any board members and chief executives of the bailed-out companies is as serious as lapse as their failure to impose any restrictions on the use of the money. As in the Sherlock Holmes story "Silver Blaze," the most important clues in this story are the dogs that don't bark.

Related:

• Why "Too Big to Fail" is Too Dull To Watch
• Documentary About the Meltdown: "The Flaw"