Joe Attard of the KCL Marxists reviewsThe Big Short, an adaptation for the cinema of Michael Lewis’ book of the same name, which depicts the winners of the 2008 financial crash. It is not a story of heroes, but one of lucky capitalists exploiting the stupidity of a system they served.
“I’m not the hero of this story,” admits Wall Street trader, Jared Vennett (played by Ryan Gosling), clutching an eight figure cheque in his tanned and manicured grasp. This bonus, ripped from the hearts of millions of working-class Americans – casualties of the meltdown of the U.S. housing market – represents a fraction of the money made by a handful of ‘insiders’ who successfully bet against their own economy. The Big Short (an adaptation for the cinema of Michael Lewis’ book of the same name) depicts these winners of the 2008 financial crash: it is not a story of heroes.
An ensemble cast does a capital job (pun intended) of painting a sordid picture of the American financial sector at the height of the housing bubble, although it does so in broad strokes – this is Hollywood, after all. Gosling’s take on Vennet (all boardroom buzzwords and yuppie machismo) finds its opposite in Christian Bale’s portrayal of Michael Burry (a ‘visionary’ hedge fund manager who was the first to spot the profiteering potential of the housing bubble) as an awkward, Rain Man-style savant. Steve Carrell plays Mark Baum (another hedge fund executive who made a killing on the crisis), an irascible misanthrope torn by his simultaneous distaste for the corruption surrounding him and a desire to profit from it. John Magaro and Finn Wittrock bring up the rear as excitable young investors Charlie Geller and Jamie Shipley, small fry who make a decent return on the 2008 crash with the guidance of retired banker Ben Rickert (Brad Pitt), who abandoned the financial world following a crisis of conscience…but can’t resist the pull of a major score. With the exception of Burry, none of these were actual people, but all had real life analogues.
The titular ‘Big Short’ refers to Burry’s strategy to profit from an impending disaster by creating and purchasing ‘credit default swaps’ with every major bank on Wall Street and ‘shorting’ (betting against) the housing market. Burry’s actions baffled most mainstream economists, since housing was considered impregnable prior to 2007, but Burry had linked increases in ‘delinquency’ (tenants skipping out on their mortgage repayments) to a grave sickness in the market. The throbbing tumour at the root of this sickness consisted of ‘collateralised debt obligations’ (CDOs), a hodgepodge of ‘sub-prime’ (rubbish) loans that were repackaged and rebranded as AAA-rated investment vehicles. Secondary CDOs (‘synthetic CDOs’ – effectively bets on an existing bet) multiplied to the point that the bedrock of the world economy was riddled with systemic weaknesses. After the bubble burst and the dust had cleared, trillions of dollars had vanished, several banks had imploded, thousands had lost their homes and Burry’s hedge fund was sitting pretty with 489% in gross profits. Those who followed suit boasted similar returns.
By now, you’re probably noticing a lot of jargon in this review. In voiceover, Vennet wryly acknowledges the bloated lingo of the financial world as a smokescreen for its crimes: “Do these terms make you feel bored? Stupid? They’re supposed to.” This knowing attitude speaks to one of the film’s greatest strengths: its capacity to educate a mass audience about a scandal most people don’t fully understand. Cutaways to a combination of financial talking heads and pop culture figures explaining financial technicalities through simple analogies (Anthony Bourdain compares CDOs to a stew made of week-old fish) are an occasionally kitschy but effective way of getting the audience up to speed with the (actually rather simple) principles behind the activities taking place on Wall Street. Politics junkies might roll their eyes through these mini economics lectures, but remember: they’re not for you; they’re for the millions of ordinary people who were shafted by a system that wants to hide behind its own mountain of bullshit.
The film also works on a materialist level, in that it isn’t a story of a handful of clever ‘actors’ pulling gold from the jaws of disaster, but one of lucky capitalists exploiting the stupidity of a system they served. Aside from Burry, nearly everyone involved stumbles upon the clues of impending ruin by chance. Baum’s investigation into the housing bubble (which reveals complicity on the part of rating agencies, the FCC and the press) triggers an ethical dilemma over his intention to make money out of the misery of millions. A key scene shows Baum castigating a rating-agency bureaucrat for setting AAA ratings on toxic bundles of sub-prime debts and refusing to downgrade them even after they begin to deteriorate. The agency manager points out that Baum’s righteous indignation is undermined by his vested interest in seeing the ratings lowered. “That doesn’t mean I’m wrong,” Baum objects. “No,” the agency manager agrees, “it just makes you a hypocrite.”
This line constitutes the film’s principal message. When it comes to making money off an economic catastrophe, there are no ‘good guys’ at the top, only winners and losers, architects and profiteers. Meanwhile decent, working people, who accepted toxic loans from people who professed to know what they were doing, are forced to pick up the pieces. Some of The Big Short’s best scenes bring the film’s cast of pirates into proximity with the ordinary folk they hung out to dry. In a particularly powerful moment Rickert (who had previously lectured his investor protégés about the dire consequences of economic collapse) is shown negotiating the sale of his swaps in a pub in Exmouth. As he haggles for a deal in the tens of millions, a working-class man at the bar calls out, “You must be a drug dealer or a banker. And if you’re a banker you can fuck off.”
The last act of the film bleakly describes the public bailout of the banking sector and lack of repercussions for the men and women behind the crash, ending with an intertitle describing the newfound popularity of “bespoke opportunity tranches”: CDOs by another name. In the end, the capitalists have learned nothing; they are making the same moves that drove the housing market to disaster in the first place, all while blaming the results of their actions on “immigrants and poor people”. It’s a bleak ending note for a film that is otherwise quite snappy, entertaining and very funny. But then, when art imitates life, it can’t help but leave a sour aftertaste in a period of capitalist tailspin.
The movie isn’t perfect; attempts to engender sympathy for cretins like Burry and Baum made me scoff and I’m a bit iffy about its attempts to pass off its characters as real figures. Still, I was impressed at how well the film bears up under scientific analysis, and as an accessible exposé of a system that wilfully wreaked havoc on the lives of millions it’s up there with the best I’ve seen. I would recommend that any socialist activist go with a less politically-minded friend to watch The Big Short, turn to them as the credits roll and say: “this is why I do what I do.”