News & Analysis
HBO, Daily Beast, Sorkin and the Financial Crisis: Too Big to Explain
Too Big Too Fail ... At a New York screening of the new HBO adaptation of Andrew Ross Sorkin's Too Big to Fail, Treasury Secretary Timothy Geithner said that not only is our financial system not too large to go bust—but we're headed for another crisis. The Wall Street meltdown of late 2008 was, in real life, a harrowing event, triggering a terrible recession from which we're still recovering. In the HBO movie Too Big to Fail, it's also a surprisingly gripping melodrama – a clash of greedheads and egomaniacs desperate to escape the consequences of their own bad behavior. – Daily Beast
Dominant Social Theme: This is a great book! It brings you inside the financial crisis and makes it come alive! You really get to feel the crisis! You are there! You can see it happening! And after reading this book you will not have a clue as to why it occurred! So watch the movie! You still won't know! But you will feel like you were there! You will feel like an insider! You will still be ignorant as hell! But you will feel connected! Wow!
Free-Market Analysis: HBO has adapted Andrew Ross Sorkin's book, Too Big to Fail and Timothy Geithner appeared at the initial screening and predicted the system will fall apart yet again. (Big news! The current system sucks!) This seems to come as a surprise to the Daily Beast, which profiled the event (see excerpt above). We were struck by this perfect storm of media activity. Surely, we decided, given the tremendous agglomeration of resources and reporting, the mainstream media must have finally "gotten it right."
In fact, what strikes us most clearly about the Daily Beast article is the portrayal of a kind of elite dominant social theme: There simply is no way to understand financial catastrophes; they are as inexplicable as they are ruinous; as mysterious as they are vast. Thus the mainstream media is better off trying to catalogue the results rather than explaining the underlying difficulties.
The Daily Beast article reports on a media nexus worth billions: HBO, the New York Times, the US Government Treasury Secretary Timothy Geithner all attended the HBO screening. And yet ... what has occurred as a result of all this intellectual firepower? Nada. Nothing. Read the book, watch the movie, listen to the speech and read the article and we guarantee you this: You still will know not one wit more about the root cause of the current financial crisis than you do now.
It's funny. And sad. Neither the book, nor the Daily Beast, nor Timmy Geithner, nor apparently the HBO movie, can shed any light on the "crisis" no matter how hard they try. Geithner tempts us but apparently does not deliver – though his remarks certainly sound scary enough. Perhaps, the article or the book are to blame? Click over to Amazon.com and the reviews of Too Big to Fail are irritated about the same thing. Five hundred pages and no answers. Woops.
Unfortunately, we expect no more. Sorkin, a New York Times writer, is a practitioner of the "too-close-to-explain" school of journalism. That is, in 500-plus pages, he apparently gets inside of every head of every major player in Washington DC and Wall Street without ever providing the "why."
Gonzo journalism can be likened to eating cellophane. It is crunchy and full of crinkly sparkles, but in the end it proves innutritious. With so much brainpower concentrated on a single issue, you surely should walk away enlightened about how the world's current financial system came within a few hours of a global meltdown. Nope.
"Media genius" Tina Brown who has made a habit of failing upward everywhere she goes, has produced yet another article of exquisite vapidity. Like the book itself, we learn the details without ever comprehending the issues. It takes enormous talent in our view to concentrate so many resources on an issue of such singular import without revealing even a single drip of significant information.
But why are we surprised? (And we are, perennially.) This is actually what Tina Brown, Sorkin, et al. are paid to do. They are professional obfuscators. Their worth is calculated by how much they can conceal, and how well. Here's some more from the article:
At various moments of high tension, Treasury Secretary Hank Paulson (played by a bedraggled, unshaven William Hurt) flees an important meeting to stress-vomit in his private bathroom, and New York Federal Reserve President Timothy Geithner (a perfectly turned-out Billy Crudup) continually curses into his cell phone.
It's an alarming entertainment (premiering May 23 at 9 p.m.), and an even more disturbing memory. So having the real Geithner predict the coming of another big crisis was the last thing the well-heeled screening crowd at the Time Warner Center wanted to hear Tuesday night. "It will come again. There will be another storm," warned Geithner, who in early 2009 succeeded Paulson as treasury secretary. "But it's not going to come for a while."
Under mostly gentle questioning from Pulitzer Prize-winning financial writer Liaquat Ahamed and New York Times business columnist Andrew Ross Sorkin, author of the book on which the film is based, Geithner said "I'm certain we will" experience another catastrophe – he just couldn't say when or what kind. "You will not know," he answered when Sorkin tried to pin him down. "It's not going to be possible for people to capture risk with perfect foresight and knowledge."
The 49-year-old Geithner – looking sharp and fresh in his precisely creased suit, starched white shirt, and brilliantly shined Oxfords – favored his audience with a grim history of the near-collapse of Bear Stearns and AIG, and the downfall of Lehman Brothers, events that pushed the markets into a panicked death spiral. "Things were falling apart," Geithner told an audience that included Time Warner CEO Jeffrey Bewkes and former Lehman Brothers chief executive Pete Peterson.
"We had no playbook and no tools... Life's about choices. We had no good choices... We allowed this huge financial system to emerge without any meaningful constraints... The size of the shock was larger than what precipitated the Great Depression ...
So there you have it, folks. Paulson vomits; Ahamed questions and Geithner predicts (another calamity). So much drama, so little insight. This is perfect US mainstream reporting. Ignorance perfected as an art form, though just to be fair we should mention Sorkin does come to a couple of conclusions at the end of his heavyweight tome. The main one apparently is he thinks there should be more regulation!
Gee, how's that for originality and where does it end? The 20th century was virtually a factory of regulation in the West and finished with a financial crash that is rivaling the Great Depression. After 500 pages, Sorkin can only muster the insight that more of the same will provide a better outcome. Yes, it's true ... Professional communicators and Western bureaucracies in aggregate are clinically insane.
Tina Brown has been known to lament the impact of the Internet and electronic reporting on 20th century media. From her point of view, the menu of information choices are simply too vast and people cannot be bothered to focus on any one media property. Too bad. In fact, this article, this gathering, these people, all provide us with sterling reasons why Ms. Brown feels the way she does, and why she is, in fact, wrong. It is not the wide range of resources currently available that makes the difference; it is the paucity of information she is willing to provide.
We have now come to the end of our article. But before we go, we are going to perform a chemistry experiment. We shall mix together inexpensive electrons and serve them up on your computer screen to provide a brief, shining moment of clarity. We will do so just to show how inexpensively and quickly it can be done. Even if you disagree, at least we will have provided you with genuine information that you can react to ...
The world's financial crisis was the result of the West's central banking economy, which has been sponsored and expanded by a group of elite banking families mostly centered in the City of London, a private enclave for the impossibly wealthy. Central banks, perhaps owned and operated by these families (and one in particular), fix the price of money via interest rates and money-volume, and price-fixing inevitably creates economic distortions.
Economies, as a result, inflate wildly and then crash. Once this happens a few times over decades, the economies in question are so distorted that a final crash is inevitable. This is what happened in 2007-2008. The West's financial structure, swamped by trillions of dollars printed from nothing, became so distorted that no one could tell a real investment or profit-making company from a phony one. The world's economy as a result froze up. The dollar reserve system crashed and likely shall not recover.
Hopefully, the world will eventually return to some sort of commodity standard. If the fascists do not triumph, the end-result of the current pain shall be money competition. Let all kinds of money compete and the best shall emerge as the most useful currency. And what about Geithner? The Treasury Secretary, without explaining what actually happened, is indicating that the current system of money-price fixing is still in effect and sooner or later will cause another crash. The powers-that-be, rather than repairing the current system by allowing the free-market to operate are desperately puffing it up with yet more money-from-nothing. How predictable. How sad.
See how easy that is? We didn't need 500 pages or two years and a million-dollar advance. We didn't need an HBO movie or even an adulatory article from the Daily Beast. We didn't need the admittedly impressive presence of Timothy Geithner, the attendance of the Wall Street crowd or other members of the mainstream press. We just needed a few electrons and readers who prefer English to gibberish.
Here are some more points to which the Daily Beast article does not allude: The current system is a farce and fraud; it cannot provide jobs; cannot provide careers; cannot provide much of anything except paper profits for bankers. This is the system that Hank Paulson bailed out (no wonder he vomited); this is the system that Timmy Geithner is dedicated to upholding. This is why the pain and terror of the past few years are bound to be repeated.
Conclusion: The people that brought you the current dysfunctional economic system are still in charge. You can see them in operation later in May on HBO. You can read the book, too. You will be amazed! Stimulated! Entertained! But you won't know anymore afterward than before. Geithner, Paulson, Ms. Brown and the banking families to whom they report, wouldn't have it any other way.
Editor's Note: Here is a link to a video that was made several years ago by the Mises Institute that should be playing on HBO instead of the dribble discussed above: Money, Banking and the Federal Reserve.
Posted by dotti on 05/19/11 01:12 PM
I don't know whether or not you are an American. If you are, then what are you doing? Blowing up buildings?
If you are not, you are still a citizen of the world. What are you doing? Blowing up buildings?
Maybe you can give percentages on the self-righteous.
Posted by bionic mosquito on 05/19/11 01:04 PM
I didn't bother, because the bigotry of the original post was overwhelming. Placing people in groups and condemning them as one is the first step toward justifying genocide (perhaps a hint at the lament of "failure" of 75 years ago?).
I think rossbcan has the percentages right, at least directionally. The vast majority everywhere go along to get along, many not even aware of the crimes they support either actively or passively.
Posted by rossbcan on 05/19/11 01:02 PM
"all Americans are psychopaths and narcissists?"
They (land of the free, home of the brave) have not stopped their government which exhibits these traits, making them complicit, just as the Germans who "went along, to get along" with the Nazis, a moral omission and legal obligation (fight criminals or, be complicit) they came to regret.
Posted by rossbcan on 05/19/11 12:54 PM
"I cannot determine the percentage of psychopaths, narcissists"
IMHO, it is 5%, magnified by 90% cowardly followers (go along, to get along), who gang up on the rational leaders (5%) who could easily end this mess, an alternative to near certain "blood in the streets".
Posted by dotti on 05/19/11 12:45 PM
First I want to make it clear that I fully support your right to post here [as long as DB posts it] and to post anything that you choose. I do, however, resent the attitude expressed in your post. To refer to Americans as all of one 'ilk', and who are all psychopaths and narcissists is-at the very least unfair and at the worst, bigotry. And it would be unfair if you said it of any nationality. Additionally, much of your post makes no sense at all. I have not covered your entire post, but have chosen select examples for reply.
'Generally, the American people are either psychopaths or narcissists. They provide the constituency for the "Power Elite" like fans of sports teams. The Power Elite acts as their agents for large-scale projects. The psychopaths, being efficient predators, act as instruments of the Elite and its clients. One disturbing aspect is that they easily gather together into packs to hunt down, trap and feed off of human beings.'
This paragraph makes no sense at all.
My reply regarding the first sentence: There are Americans who are psychopaths and there are Americans who are narcissists. However to say that 'generally' the American people fall into one group or the other is beyond nonsense-it is bigotry.
Continuing the paragraph, I paraphrase to try to clarify: The American people are the constituency for the Power Elite like fans of sports teams. So the American people are the fans; in the next sentence Power Elite are the agents. I thought the Power Elite were the sports team-now in the next sentence they are the agents? Next, the psychopaths (still at 4% of the population?) are instruments of the Power Elite. At this point are the Power Elite the sports team or the agents-if the psychopaths are the 'instruments'?
And in the last sentence of the paragraph to say that 'one disturbing aspect is that they easily gather together into packs to hunt down, trap and feed off of human beings': 'one disturbing aspect'-that's a bit of an understatement if you consider the rest of the sentence to be true. It is not particularly clear, but you are apparently describing the psychopaths here and you go on in the next paragraph to say that narcissists are more dangerous.
'I am coming to the conclusion that the narcissists are more dangerous. A psychopath is not likely to feel shame whereas a narcissist does. However, a narcissist has not developed the self-awareness required to understand and correct his behavior and the mindfulness necessary to do right thereafter.'
Then you explain why you think narcissists are more dangerous: 'The narcissist is thus more dangerous because of the feedback loop they follow. They carry virulently contagious mental illnesses. The legend of the vampire transforming their victims into vampires with a bite applies here. Formerly healthy people become dysfunctional. I have witnessed this process for over a half-century, from families to civilizations.'
Frankly, you sound very hostile to me. But, of course, bigotry will do that to one, won't it?
Another quote: 'We have all developed these dysfunctions to some degree by interacting with these monsters. We must clean ourselves while cleaning up our environment. We blew a great opportunity about 75 years ago and the job is now much more difficult.'
What great opportunity did we blow about 75 years ago? I dare you to tell honestly what you are referring to. Is this another aspect of your bigotry?
Skipping down to your last paragraph:
'Such withdrawal and forming our support networks, will ensure our survival. We know better but Americans and their ilk do not and they presently have no incentive to change. They will, however, act as their own agents of change, as the monsters they have become embark on a temper tantrum otherwise known as an epic civil war. All of our talking, educating and reasoning is like lecturing a cat and will not prevent this outcome. The losses Americans will sustain will be nothing more than self-eclipsing as the losses they have inflicted domestically and internationally will return. They will learn after experiencing a sufficient amount of pain. '
Am I the only one reading here who resents your assessment that all Americans are psychopaths and narcissists?
I don't even know what to call this drivel-psychobabble? Philosophical psychobabble? And the distinguished readers here seem to think it's worthy of commendation?
Okay, guys. If you're going to attack my feedback, have at it.
Posted by cat writer on 05/19/11 12:41 PM
I am not a professional psychologist so my terminology may well have been inaccurate. On the other hand, I am not part of that establishment.
As a project manager in information technology, however, these issues become critical to success and the increasing number of people with personality disorders is causing an increasing rate of failure to the point of making America a Third World country in a First World disguise.
Technical matters, incuding certifications, are seldom a cause of project failure. The pursuit of ideal profiles and people has resulted in a failure rate of 68% according to studies I have read. So a project manager has to learn how to identify those rotted individuals as hazards just as pilots need to know about thunderstorms, icing and fog. This is not a part of project management education, by the way.
(I apologize to Latin Americans, Asians and Africans; most people I have met in their nations or dealt with outside do not have such disorders. The big exception is India.)
From your description of clinical narcissism, it is clear that most Americans are narcissists. I suspect that the emptiness you mention is from that incapability, so that is why these people love their entertainments, including abusing those with weaknesses who do not fight back effectively by whatever means are at their disposal. Thing is, everyone has weaknesses, and a healthy adult society has the means to deal with that situation: the free market.
On the other hand, there is a substantial number of psychopaths in that country. In other words, "you are responsible for my 'screwing' you".
I cannot determine the percentage of psychopaths, narcissists and victims in the United States today. I wonder if it is worth the effort and instead just deal with these abusers without bothering to understand why they abuse.
Is it really that important to understand the inner motivation?
I would appreciate your definition of "addiction".
And thank you very much for your response!
Posted by josejoe on 05/19/11 11:49 AM
wow, i love the db-there are a LOT of very bright people in this world-you and your feedback contributors are living proof-thanks!
Posted by rossbcan on 05/19/11 11:49 AM
"Where does your reality place Bill Gates?"
He made his fortune by providing value for which we voluntarily exchanged our value and, if not for his value, this conversation would either have been decades delayed, or not possible at all.
Verdict: NOT GREEDY. A force for freedom. The allegations of "greedy" come from the feral envious and, the defense cost a lot of coin, a loss to unproductive forces in civilization "the law". It is alleged "just not fair", an aggression against civilization to be "excellent".
On this path, the insects will inherit the earth.
Posted by ksbrunn on 05/19/11 11:42 AM
Well put. We are all vulnerable to manipulations, whether by those you label as psychopaths or narcissists. Allow some clarification in terminology. Your definition of psychopathy is spot on. Not quite so for narcissism. The behavior of both is almost identical, hence also the danger they pose. Where they differ is in their inner motivation.
The psychopath has a deficient ability to feel shame. He understands it, intellectually, but does not feel it. Therefore, he is not hindered in his self-gratifying behavior: What's yours is mine. If I can't have it myself, I will at least take sadistic pleasure in preventing you from having/benefiting from it. Your suffering is my pleasure. I am not empty inside. I feel good about who I am. I am not depressed. In fact, I am just the opposite, and you like that in me, are drawn to me, trust me. You are a fool, but that's your problem.
The truly clinical narcissist IS chronically depressed and needs his outward displays of just the opposite to compensate. Actually, I am empty inside, although I don't know why and I am envious of others around me are ok without behaving as I do. I am addicted to manipulating, deceiving, and praising myself falsely, even if I see that these momentary things are repetitively self-destructive. What drives me is shame, but not ordinary shame. My shame has no tangible reason. It just is. I never developed the brain circuitry to deal with it. So I avoid it at all costs, even my own well being. All I can do, to stay alive, is more and more and more of the same. It makes me feel good. Well, not really. What it really is is a temporary fix that prevents me from feeling bad. It doesn't work, of course, but admitting that, admitting that I have this problem, any problem, just awakens the shame monster that lives inside me. In short, my addiction to the illusion of my perfection prevents me from admitting my own addiction to it.
But, as said above, both character disorders are equally dangerous. And thanks for your insights into religion. It turns society into populations of "sheeple."
Posted by dotti on 05/19/11 11:25 AM
Re: Thus, it can be easily determined if one such as Bill Gates and Microsoft is greedy, or not, using reality as opposed to envious, greedy opinions.
REally? I have heard that he was completely ruthless in developing his vast fortune; but now he is Mr. Wonderful giving away billions to "worthy causes".
Where does your reality place Bill Gates?
Posted by rossbcan on 05/19/11 11:13 AM
"I like this definition for the negative type of greed"
Positive type of "greed", if you must use this elite / educationally / media subverted term is called "productivity", builder of civilizations, for mutual self-interest. Peacefully exchanging your value for the value of another. Is "obey or be smited" a reasonable "value exchange", in mutual self-interest?
Thus, it can be easily determined if one such as Bill Gates and Microsoft is greedy, or not, using reality as opposed to envious, greedy opinions.
Elite greed is not just about money. It is also about power and competing rather than by excellence, but by sabotaging all possible competition. They are small, unfit to survive creatures and, they KNOW IT. Sort of like the US, which is why they are getting trounced, on all fronts. But, the inevitable temper tantrum is a terror to be pondered.
Posted by Don on 05/19/11 11:12 AM
A taxonomy of obfuscation is born.
"Geither acknowledged the obvious--that economic recovery has been slow in coming. 'It's like a basketball game, and we're in the second quarter.'"
Allow me to nominate obfuscation by "sports simile" distraction.
Posted by Debra B on 05/19/11 10:55 AM
One suggestion -- you changed your format for posting feedback. I assumed I had forgotten my user name, so I have not commented for a while (out of laziness regarding trying to retrieve it.) Why not put a sentence of two at the top of your homepage about the new registration? Just a thought.
Posted by bionic mosquito on 05/19/11 10:48 AM
I do not accept that the term "greed" does justice to the motives and actions of the power elite.
EVERY human being is "greedy" if defined as wanting more than one currently has. What father does not not to provide a better life tomorrow for his family as compared to today? I find nothing wrong with this type of "greed."
Many human beings (but not all) are "greedy if defined as rossbcan does, wanting to consume more than they produce (and presumably using force to get it). I like this definition for the negative type of greed, by the way.
Very few human beings set the world on a course for global war, as was done throughout the 20th century for the notion of "greed."
This is more than "greed" as the term is commonly used. Yes, more wealth is a nice byproduct. But most people don't set off to kill a couple hundred million solely to get more wealth, no matter how "greedy" they might be.
Posted by rossbcan on 05/19/11 10:34 AM
"Greed is a hunger"
Defined as "consuming more than you produce", collapser of economic viability of civilizations, enabler of political demagogues, rationalizers with guns and gavels, and their foul "professions", making crippling commissions by providing false fairness (equality of results, independent of contribution).
Posted by WorkingClass on 05/19/11 09:53 AM
As to the why. Greed is a hunger that can never be satisfied. Humans possessed by greed, energized by lust for power/wealth and born without a conscience are cannibals who make peace and prosperity impossible for the race of man. You can sit and wait, trusting evolution or learn the wisdom of being in this world but not of it.
Posted by kenn on 05/19/11 09:36 AM
So little Timmy's finally a hero...
Posted by rossbcan on 05/19/11 09:13 AM
we are in the eye of the hurricane, the calm before the storm. The havoc that has already been wreaked is real, but the hemorrhage has been optically patched by band-aids, an eating of civilization's seed corn. Now, the cupboard is bare.
Honest trade and property rights are long GONE. Trust is non-existent, so there goes further large scale frauds. This leaves force: War and tyranny preying on those who still have something left to take.
Do they dare? You bet. They are cornered, desperate psychopaths and, history is very clear.
Posted by John Danforth on 05/19/11 09:05 AM
There is much truth in what you say. But if there is ever to be an awakening, a blossoming of freedom, it will likely come from America. The things you damn America for are epidemic; other regimes around the world would do the same things and worse if they could get away with it. At least in America there are a few dozen people around who know the score and don't like being pushed around. If they are snuffed out, things will get much worse for everyone, everywhere.
Posted by rossbcan on 05/19/11 09:05 AM
"Yes, yes, yes, and sadly, likely yes."
Counting "coup" by any means possible is believed to be the "manly thing" to do, which a lot of butches (females less able to use force for physical strength reasons, therefore, statistically more inclined to fraud) are starting to buy into.
There is a reason that the powers that be spout freedom as pretexts. Natural law (reality) is on the side of freedom because we can CHOOSE to do whatever we want, if we abandon terror of consequences. The only choice of others is how they respond. This means that they cannot anticipate and, more importantly, lose in public opinion if they initiate aggression in response to peaceful acts. Ask Henry Thoreau, or his deciple Ghandi.