Too Big to Fail: The Financial Crisis as Action Film

If newspaper reporters write the first draft of history, newspaper reporters with big, fat book contracts write the second. But history never really goes mass market until Hollywood gets hold of it. HBO Film's "Too Big to Fail," which premiers tonight, takes the financial meltdown of 2008 to the final stage of that evolution and artfully translates New York Times reporter Andrew Ross Sorkin's 600-page tome into prime time. The drama of those harrowing survives the translation nicely. How much insight survived is another question.

To squeeze the near death of capitalism into a single evening's viewing, director Curtis Hanson and screenwriter Peter Gould focused on then Treasury Secretary Henry Paulson, played stoically by William Hurt. The film begins in May of 2008 as Lehman Brothers is unravelling and Paulson's team is tying to persuade any other bank to buy Lehman before it goes under. For the next 105 minutes, actors playing leading financial and political figures pop in and out, (subtitles help you keep them straight) as Paulson and his allies and enemies race around delivering boardroom ultimatums, shouting profanities into cell phones, and improvising strategies to save the world's financial system. Think of it as a white-collar action film.

Naturally, a certain amount of financial nuance gets painted over in this kind of film, and events and characters get mushed together. Ben Bernanke, played by Paul Giamatti with a Zen-like, soft-spoken authority that the real character has rarely shown, functions mainly as an advisor to the Paulson team. In a sin of historical omission, Hanson and Gould never mention the alphabet soup of creative emergency loan programs that Bernanke's Federal Reserve created on the fly-like the Term Asset-Backed Securities Lending Facility and the Commercial Paper Funding Facility-that arguably did more than anything emerging from Treasury to stabilize the markets.

There are also sins of historical commission. In one that caught my attention, Lehman Brothers' attractive CFO Erin Callan, played by Amy Carlson, casually helps CEO Dick Fuld (James Woods) get into cuff links before a meeting. The offhand nature of the gesture implies that she has helped Fuld get dressed many times before. The suggestion of a back story between the two adds dimension to their characters and may be darn good movie making-but Sorkin's book mentions no such familiarity between the two. Sorkin does report unsubstantiated rumors that Callan was involved with another Lehman executive, not Fuld. But hey, that's show biz.

In a way, it's unfair to criticize the film for infidelity to Sorkin's book. It's not a historical re-enactment; it's a drama. And on that measure, the film does a good job. It keeps up a breakneck pace of plot development and maintains a sense of urgency that would do Law and Order proud. I had no trouble following the story (although because of my job, I may not be the best stand-in for a general viewing public).

What did get lost in the Hollywood translation is any sense of how the crisis came to be. The only real attempt at an explanation comes in a scene more than halfway through the film in which Paulson and other members of his team brief public affairs director Michele Davis (Cynthia Nixon) on the causes of the crisis. It was the first inkling a novice viewer would get that the characters trying to save their companies and capitalism as we know it were the same people responsible for nearly wrecking it.

A greater sense of how the world got to 2008 might have colored the film's depiction of its main characters. You can't fault Hanson and Gould for wanting to have heroes or for finding them in Paulson and his conscientious, underslept team, the Yoda-like Bernanke, and the smart preppy Geithner (Billy Crudup). But these characters, too, did their part to create the crisis. Paulson as CEO of Goldman Sachs helped tear down regulations that might have prevented reckless excesses in derivatives. And Bernanke, as Fed chairman, failed to enforce existing bank regulations that could have contained the mortgage crisis.

Films need villains, too, however. And in a script featuring some of the most hated contemporary figures in America, it seems odd that there are none. From Gould's script, it would appear, for example, that Dick Fuld's main error was to believe naively that real estate would bounce back eventually. Little is made of Lehman's 30 to 1 leverage or its use of shady accounting to hide the fact from regulators. The point is not that real estate won't bounce back eventually. It's that no one with 30-to-1 leverage will be around to see it. Goldman Sachs' Lloyd Blankfein (Evan Handler) similarly just seems like another CEO bent on saving his company; there's no mention of the fact that the company spent the years leading up to the crisis pushing toxic securities on unsuspecting customers. Maybe that will get covered in the prequel.

In an interview with CBS MoneyWatch's Jill Schlesinger, Sorkin said that the toughest part of writing the book was that "everyone knows how it ends." Well, in a sense. The book and the film end at the same spot, with Paulson's team persuading the big banks to take $125 billion in TARP money. It's a political success for the film's heroes, but everyone knows it wasn't actually the end of anything. It didn't stop the recession, didn't reverse unemployment, didn't convince banks to lend, didn't halt the stock market slide, and only extended the power of too-big-to-fail banks, leaving the global economy more vulnerable than ever.

More important, the film ends before President Obama signed the Dodd Frank financial reform legislation, which was supposed to eradicate the need for any real-life replay of Too Big to Fail. In fact, the law does just the opposite. Yes, Dodd-Frank would give regulators the authority to wind down a company like Lehman Brothers, rather than force it into bankruptcy, and it imposes stricter capital standards on "systemically important" institutions. But the "systemically important" designation essentially enshrines "Too Big to Fail" as regulatory policy. The eventual sequel to Too Big to Fail may draw its cast from a different Washington swat team-from Dodd Frank's new Financial Stability Oversight Council, perhaps, rather than Hank Paulson's office of the Treasury Secretary-but the drama will be the same: Too much power concentrated in too few deeply intertwined banks.

In other words, whatever may have been the toughest part of writing Too Big to Fail, the toughest part of watching it wasn't knowing how it ended. The toughest part was knowing that it hasn't.

[A version of this post first appeared on The Fiscal Times.]