There's a passage toward the end of The Perfect Storm where Sebastian Junger is trying to explain the desperation of a commercial fishing craft caught in an unprecendented, deadly storm. Paraphrasing here, Junger writes that one can measure the direness of one's situation by looking at how one's choices have narrowed. A week earlier, the ship's captain could have made choices that avoided the storm altogether; now, his choices are pretty much to turn the ship, which is dangerous, or not turn the ship, which is suicidal.
I was reminded of that passage last night when I watch HBO's new movie, "Too Big to Fail," which dramatizes the critical period in the fall of 2008 between Lehman Brothers foundering and the U.S. government stepping in with the Troubled Assets Relief Program (TARP), commonly known as the bank bailout.
(Soapbox: TARP/"the bailout" and what's known as "the stimulus" are two different pieces of legislation signed by two different presidents under two different sessions of Congress. Sorry, I get irritated when people use those terms interchangeably, especially when they're blaming President Obama for both of them.)
I enjoyed it. It was hard for ordinary Americans to grasp what was happening while it was happening, so it's nice to have a streamlined-for-fiction version to refer to, complete with a scene in which several Treasury administrators blatantly Captain Exposition-style explain what subprime mortgages and credit default swaps to another Treasury administrator, who presumably would be up on this (but whatev, story device). Characters are helpfully identified with supers and played by actors you've seen in everything, so you can tell who's who, even if it's just "government guy" or "Wall Street guy." (Bill Pullman! Tony Shalhoub! Evan Handler! Cynthia Nixon! Paul Giamatti! Sorry.)
I think what I enjoyed most, and what surprised me most, was seeing Pres. Bush's Treasury Secretary Henry Paulson (played by William Hurt, who, c'mon, is William Hurt) emerge as kind of the hero in this story. Yes, I know it's TV, but from everything I remember at the time or have read since, the portrayal of Paulson isn't far off. The scene where he gets on his knees to beg House Speaker Nancy Pelosi not to give up on TARP actually happened. And a scene with Paulson's reaction to Sen. John McCain suspending his presidential campaign to deal with the crisis may be fiction, but it sure was entertaining. It's trippy to see stuff I wrote about at the time play out on screen.
As the film shows him, Paulson tried mightily to find a "private sector solution" to Lehman Brothers' meltdown, only to see American and world investors turn their backs on the troubled firm. A taxpayer bailout was absolutely not his first choice. In a world where financial institutions were simultaneously reckless and cautious, carelessly interdependent and skittish, TARP was the ship captain's choice between riding a deadly wave or being smashed by it. Somewhat damned if you do, completely and possibly irreparably damned if you don't.
I also appreciated that the film's endnotes noted the immediate impact of TARP: namely, that the public gave banks billions specifically to unfreeze credit markets, and they proceeded to not loan out any of it. The government's action averted a catastrophic depression, while the banks' actions (before and after) just screwed taxpayers more. By the way, the ultimate cost to taxpayers is estimated to be $25 billion, all of which has been or is being repaid.
Anyway, good film. It should be required viewing, particularly for people who complained about every action the government took that fall - who should then be asked what they would've done differently. No one wanted TARP, and yes, the crisis was a long time coming, but Congress, President Bush and Secretary Paulson deserve credit for making the difficult, and brave, decisions when it counted.
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