HBO, Daily Beast, Sorkin and the Financial Crisis: Too Big to Explain
By Staff News & Analysis - May 19, 2011

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 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.

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.

After Thoughts

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.

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