Tuesday, December 29, 2015

The Big Short

Adam McKay's The Big Short is based on Michael Lewis' book about the 2007 financial crisis. It’s what's usually termed a docudrama (a category that also applies to Spotlight, the recently released film about pedophilia and the Catholic Church). However the film's hybrid nature results not only from the use of actors (Brad Pitt, Steve Carell, Christian Bale, Marisa Tomei) to tell a real story, but from the complexity of its tale. It bears the burden of trying to explain how a pair of esoteric financial instruments few people understood, credit default swaps and collateralized debt obligations, could have created such a havoc in the lives of average people all over the world. During the course of the movie the economy of Iceland will tank and that of Spain will begin to titter. Many viewers of the film may still be perplexed about what exactly happened in financial markets and why for instance Lehman Brothers and Bear Stearns were allowed to fail while other financial institutions like A.I.G were bailed out with the help of the government. Here are a few choice quotes: “Tell me the difference between stupid and illegal and I’ll have my brother-in-law arrested…truth is like poetry and most people hate poetry….I’m standing in front of a burning building and offering to sell you insurance on it.” The following from Huraki Murakami also appears on the screen: “Everyone, deep in their hearts, is waiting for the end of the world.” The language is plainly an attempt to bridge the gap between economics and emotion, but it also leaves many loose ends, the greatest of which lies in how the SEC and agencies like Moody’s, that rate financial instruments, could have fallen asleep on the job. It’s logical on one level and yet on another makes absolutely no sense. In his early writings Marx talked alienation caused by the division of labor. If nothing else The Big Short takes this to its logical conclusion in dramatizing an unregulated financial system that has little if nothing to do with the lives of those who actually have to work for a living.

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