the big short

This isn’t a review, but a reflection. The movies that intrigue me do so because they explore questions like how we should live our lives, what makes for good (and bad) relationships, and how we come to be made whole or broken, saved or lost. I write about those movies to engage these and similar issues.

The Big Short, the movie about the housing bubble and subsequent financial crisis, is styled as a comedy, with flippant pop-cultural explanations of finance and humorous repartee between the characters. More than anything, though, it is an angry movie. Writer-director Adam McKay is clearly outraged at the deceit, the manipulation of markets, the collusion, and the fraud that occurred, not in just a few cases, but throughout the system. He’s angry, too, that ordinary workers and homeowners suffered the most, while the bankers who were responsible not only evaded prison but also received government bailouts to keep them from ruin.

The movie focuses not on the financial establishment but on the few investors who saw in advance that the mortgage securities market and derivative financial products were unsustainable–who knew that the system would crash. if you knew all that and could short–bet against–that market, you could make a lot of money. The movie tells the saga of these investors (the movie uses different names for most of the principals, but they are based on real-life counterparts) and how they won their bets.

On second thought, it doesn’t seem as if anyone really won. Of the main characters, only Jared Vennett (played by Ryan Gosling) seems to be unperturbed by the financial crisis and his role in it. Three characters in particular end up saddened or shaken by what happened. Their reactions are reminders that dealing in large sums of money isn’t a morally neutral activity. Someone is bound to become greedy, fearful, or envious; relationships will be destroyed; life will cease to be about human well-being and instead be about accumulating wealth.

The first character who is disturbed by what happens during the few years covered by the movie is Michael Burry (Christian Bale), a medical doctor and hedge fund manager who is socially inept. He functions in the world of numbers, apparently as compensation for his inability to function in the world of people. He is the first to bet against the mortgage market, to the tune of 1.3 billion dollars. His fund loses money as he waits for the collapse he’s sure is coming, and his investors get impatient. Their relationship progressively devolves into threats and lawsuits. Eventually, Michael confesses “Making money isn’t what I thought it would be. This business kills the part of us that is human.” He is eventually vindicated, but at tremendous emotional cost.

Another character markedly affected by the bubble and its aftermath is temperamental hedge-fund manager Mark Baum (Steve Carell), based on the real-life figure Steve Eisman. Mark has undergone a recent family tragedy, and his personal sorrows and the nation’s sorrows eventually merge for him. He is uncertain about the scale of the crisis. When finally convinced after a conversation with a banker who unconcernedly reveals that the potential risk was much larger than he could have imagined, Mark instructs an underling to short “everything that guy has touched.” He walks off abruptly; when asked where he is going, he says, “I’m going to try to find moral redemption.” He is clearly shaken by the danger to the world economy and his role in bringing the crash closer. Soon afterwards, he confesses to his wife that the work he is in “changed me into a person who couldn’t reach out to someone.” He is probably referring to the family tragedy here, but also may be thinking of the fate of millions of innocent (or in some cases, foolhardy) investors, homeowners, and workers. The ill wind for others that blew money his way also blew melancholy over what had happened.

The third troubled figure, Ben Rickert (Brad Pitt), is a legendary financial guru who is already so disillusioned that he has left the industry to hibernate in a rural retreat where he grows his own food. Two young traders (John Magaro and Finn Wittrock) who recognize the bubble but need help getting access to financial markets convince him to lend them a hand. When at one point the young traders become elated about their prospects for success, Rickert calmly lays out what success would mean. Don’t they know, he asks, that they are making a bet against the US economy? If they are right, people will be losing jobs, homes, and pensions. Many will suffer, so those who profit should have their spirits saddened, not lifted.

So, the movie invites us to reflect on our reaction when we prosper while, or even because, others suffer. The world is set up so this situation happens often: for example, slavery benefits most of us. In the end, Ben goes back to his farm. That response reminds me of Candide, who witnessed the world’s suffering, then decided to tend his garden. Not much help, but at least it limits the harm the gardener will be doing going forward. Maybe sometimes that’s the best we can do.