Never has a nationwide crisis been felt by so many and understood by so few. As banks and stocks and mortgages and houses all crumbled alarmingly in 2008-9, millions of startled Americans asked themselves a simple question: “What the fuck just happened?”
Sadly, there wasn’t a simple answer. Hundreds of crisis books were published, including Too Big To Fail, Andrew Ross Sorkin’s blockbuster tick-tock of bankruptcies and bailouts, as well as the official report of the Financial Crisis Inquiry Commission. But they were invariably long and abstruse, and while a lot of books were sold, many fewer were actually read.
By the time the crisis was over, only three stories had really managed to capture the public imagination. The first, The Giant Pool of Money, was a podcast which did a great job of explaining the housing collapse, even though it came out six months before the collapse of Lehman Brothers and the height of the crisis. The second, Inside Job, was a documentary film which won the Best Documentary Oscar for its ferocious interrogation and condemnation of the men who caused the crisis. And the third was The Big Short, the fantastic Michael Lewis book which managed to find a thrilling narrative inside this otherwise disparate and inchoate crisis.
Lewis is Hollywood’s favorite nonfiction writer—his books Moneyball and The Blind Side both got made into critically-acclaimed movies—so it’s no surprise that when filmmaker Adam McKay decided he wanted to portray the financial crisis, he naturally gravitated to The Big Short.
McKay, a co-founder of Funny or Die who is mostly famous for directing Will Ferrell movies (Anchorman, Talladega Nights, Step Brothers) is not the most obvious person to helm a film that attempts to explain things like RMBS waterfalls and the construction of synthetic CDOs. But he’s not a bad choice at all: he has real anger about what happened during the crisis, he’s a fantastic storyteller, and, on the theory that a spoonful of sugar is always helpful in terms of making medicine go down, he’s very good at larding the clunkier bits of exegesis with humor and a nice fat wink at the audience.
That said, this isn’t an explainer movie. It’s a full-on Hollywood Brad Pitt movie, whose purpose is to entertain, and perhaps to enrage, much more than it is to educate millions of people about the finer points of mark-to-market margin collateralization policies. This is a crisis movie for people who love watching Ryan Gosling in expensive suits; his performance is much more important than any particular thing he says. Similarly, when The Big Short wants to present us with someone buying multiple houses they can’t afford, it makes sure that person is a gyrating topless stripper. Movies are a visual medium, and McKay never forgets that crucial fact.
What’s more, McKay is acutely aware that finance is boring. As a result, his film is more interested in the actor’s craft than it is in the nitty-gritty of the crisis. Ryan Gosling, Steve Carell, and especially Christian Bale all deliver complex performances which are put together as beautifully as any mezzanine CDO. They play their characters to perfection, and in general the quality of acting and editing in this movie is off the charts. Meanwhile, the expository interludes are handed to Margot Robbie in a bathtub and to Selena Gomez at a blackjack table – a way of telling the audience that we know this stuff is going to go right over your head, but don’t worry about it, because you can always just feast your eyes on a beautiful woman while it’s happening. (As Molly Fitzpatrick correctly guessed, it turns out that there are no substantive roles for women in this movie, which fails the Bechdel Test at the second hurdle.)
The decision to go for visuals without worrying too much about substance was probably the right one. Movies are good at telling stories about people; they’re not good at educating people about complex and abstract concepts. You can’t show people what a collateralized debt obligation is, but you can show renters being kicked out of their homes because their landlord didn’t pay the mortgage, even though they were making their rent payments in full. As a result, the elucidation of financial concepts is cleverly calibrated: it’s detailed and clear enough to make you think you understand what’s going on, at least while you’re trying to keep up with the plot. But then, if someone asks 24 hours after you saw the movie what you learned about, say, financial derivatives, you’ll come up empty-handed.
For a finance nerd like me, then, the movie of The Big Short can be a bit disappointing: it merely gives the appearance of comprehension, rather than demonstrating the real thing. Most glaringly, while the lead characters are definitely conflicted about profiting from the collapse of the American economy, the film barely touches on how they were directly culpable for that collapse. By placing big shorts, they massively increased the number of bets that banks and investors made on the American housing market. And then, when those bets came due, this small group of hedge-fund managers made billions of dollars at the expense of counterparties who could not remotely afford the losses they were facing. Without all the short bets put on by the likes of Michael Burry and Steve Eisman, the crisis would have been smaller and cheaper and more manageable.
But this isn’t a movie for finance nerds. The real people I know who have seen the movie tend to love it: it puts human faces onto a story where until now the only familiar faces were those of politicians and a handful of bankers. And, it’s funny. I never once had the thought, when we were going through the crisis, that “I’m sure we’ll laugh about this one day.” But then the Kilkenomics festival in Ireland brought together comedians with economists, and showed that it could be done after all. And now Adam McKay has managed it at feature length. Which is a significant achievement in itself.