Rick's Reviews > Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis — and Themselves

Too Big to Fail by Andrew Ross Sorkin
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Sep 27, 2010

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Read in September, 2010

Too Big to Fail is a strong inside chronicle of the financial crisis that nearly brought about a second Great Depression in 2008 and, as the sub-title suggests, almost destroyed the international financial system. Informative, if not insightful; compelling, if not illuminating, it’s a human drama with no maverick heroes, just venal and unquestioning banking and investment bureaucrats—bureaucrats who inflate their own worth and reward their inflated value like drunken sailors paying each other for the pleasure of pleasuring themselves.

At various points they try to do good deeds that aren’t directly self-serving, efforts to save tottering companies for the good of the system and the country but even then they at the least get indirect benefits and, in some cases, direct ones such as fees and protections against the risks they’re taking on. But they also get the bigger benefit of a rescued system that still depends on these engineers of disaster, who remain the only humans (I leave hypothetical room for the magic number of monkeys with keyboards and calculators who might randomly replicate this masterpiece of failure) who know how the damn machine works. Murray Kempton made that point brilliantly in a column about the 1989 prequel to this mess when he compared MBAs to Eastern European Communist Party bureaucrats, both pampered squires of corrupt systems. Prevent the machine from collapsing and you save these men (almost always men and almost always white men) and their careers.

Secretary Paulson (one of these men, part of Government Sachs, the phrase used to describe the prevalence of Goldman Sachs alums in watchdog positions, not to mention in the executive suites of rival companies) had little choice because the mansion of privilege and greed that would collapse would have taken many, many other institutions and ordinary middle class and working families down with them. There are few signs that these gentlemen get it at all and then only when things are at their absolute bleakest for them personally. “Dimon was mulling over the day’s events, realizing how bad it was out there. ‘They want Wall Street to pay,’ he told the room of bankers relaxing after their late dinners, hoping to get them to appreciate the political pressure that Paulson was facing. ‘They think we’re overpaid assholes.” Duh! Even here a key modifier is missing. They are overpaid, incestuous assholes. At one point, when the Fed is trying to save AIG with the help of J.P. Morgan, who had actually been hired by AIG to help advise them in their perilous situation, AIG’s boss confronts one of J.P. Morgan’s bosses with a simple question, “we need to know which hat you’re wearing. Are you working for us, the Fed, or J.P. Morgan?” The answer? “I don’t think I can answer that question without talking to my lawyer.”

Sorkin did tremendous research to augment the deep knowledge that came from covering these events for The New York Times and he presents the complex narrative with its scores of institutions and cast of thousands with clarity and directness. It reads like fiction but the nightmare reality is that it’s not.
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