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.

I read a fascinating article by Jarrod Shanahan at The New Inquiry about why those in our society have a strong tendency to believe in conspiracy theories.  The heart of the argument is this:

“The appeal of conspiracy theories is simple. Whether its Lizard People, Ancient Aliens, Freemasons, Occupy’s “1%,” or the poor maligned Rothschilds, the conspiratorial mind clings to the comforting notion of a world controlled by a rational agent capable of exerting its will to guide human events. Somebody is driving this thing … anybody. To the conspiratorial mind we are not alone with ourselves, left to our own devices, which can be the most terrifying prospect of all. The conspiracy fills the seeming vacuum at the center of society, the paralyzing abyss beneath our flimsy facades of order, with a reassuring rational kernel. Beneath the purported chaos of a modern world seemingly driven inexorably toward its own destruction, a secret logic hums away, unseen, yet steering with the circumspection of a protective father. In this way the conspiracy theory is a secularized monotheism which replaces our dearly departed God with an equally shadowy intelligence serving the same omniscient function. Sometimes it even lives in outer space and knows what we’re thinking.”



In other words, it’s hard to live in a world that has banished the idea of divine agency.  As Voltaire put it, “If God did not exist, it would be necessary to invent him.”  Conspiracies are the form such invention takes.  I’m reminded of a colleague who attributed paranoid delusions to the need to have somebody’s attention, even if that imagined somebody is malevolent.

Moderns have a much harder time living without God than God has living without the devotion of moderns.

“Ignorance is bliss,” or so said the eighteenth century English poet Thomas Gray.  In previous blog postings, I’ve mentioned Chad Feldheimer, the clueless gym employee in “Burn After Reading,” who was simple-minded enough to remain happy while everyone around him was miserable.  I also alluded to the famous scene in “Annie Hall” in which Woody Allen asks a couple on the street their secret of happiness.  They answer  that they are shallow and empty-headed, so nothing bothers them.  In the movies, anyway, ignorance has its proponents.

I recently ran across a reference to a story by Voltaire (“The Story of a Good Brahmin”) that makes the complementary point that searching for knowledge leads to misery.  Nonetheless, Voltaire doesn’t seem ready to abandon the search for knowledge in order to embrace the happiness of ignorance.  I found the story online here.



The Brahmin of the story is “a very wise man, full of wit and very learned.”  All his wisdom, however, only made him miserable: “I have been studying for forty years, which is forty years wasted; I teach others, and I know nothing; this situation brings into my soul so much humiliation and disgust that life is unbearable to me.”  The narrator contrasts the despair of the Brahmin to the happiness of an ignorant old woman:

“That same day I saw the old woman who lived in his vicinity: I asked her whether she had ever been distressed not to know how her soul was made. She did not even understand my question: she had never reflected a single moment of her life over a single one of the points that tormented the Brahmin; she believed with all her heart in the metamorphoses of Vishnu, and, provided she could sometimes have some water from the Ganges to wash in, she thought herself the happiest of women.”

The narrator points out to the Brahmin the contrast between him and the woman.  The Brahmin replies, “I have told myself a hundred times that I would be happy if I was as stupid as my neighbors and yet I would want no part of such a happiness.”  Upon reflection, the narrator decides that he, too, “would not want to be happy on the condition of being imbecilic.”  This seems to him contradictory.  Isn’t it more logical to choose happiness over the struggles of reason?  Still, the other philosophers he asks make the same choice.  The story ends with the matter left unresolved:

“But, upon reflection, it appears that to prefer reason to felicity is to be very mad. Then how can this contradiction be explained? Like all the others. There is much to be said about it.”

Voltaire’s question is particularly pertinent for those who maintain that all humans seek happiness as their primary goal in life.  How could that be the case if even a substantial minority would prefer being informed but saddened to being ignorant and blissful?