"Too Big to Fail" is too maddening to watch

I was sick yesterday, so Anita and I cuddled up to watch “Too Big To Fail," the television movie released by HBO this past spring. Based on the book of the same name by Andrew Ross Sorkin, award-winning author and financial columnist for the New York Times, it chronicles the financial meltdown of 2008 and depicts then-Treasury Secretary Henry “Hank” Paulson – who was himself previously Chairman and CEO of Goldman Sachs, the global investment bank, and is worth an estimated $700 million – as a dedicated public servant caught up in the urgent effort to save the American economy from complete and utter collapse.

Hank Paulson

Paulson, played by William Hurt, is shown fretting and consulting extensively with then-Federal Reserve Chairman Ben Bernanke (Paul Giamatti), Timothy Geithner, then-President of the Federal Reserve Bank of New York (Billy Crudup) who succeeded Paulson as Treasury Secretary in 2009, Treasury Chief of Staff Jim Wilkinson (Topher Grace) and Assistant Treasury Secretary for Public Affairs Michele Davis (Cynthia Nixon) about the financial mess created in part by the subprime mortgage crisis.

Timothy Geithner

Bill Pullman plays Jamie Dimon, Chairman and CEO of JPMorgan Chase, the largest bank in the United States. Michael O’Keefe is bank takeover expert Chris Flowers. James Woods is Richard Fuld, Chairman and CEO of Lehman Brothers, the fourth largest investment bank in the country before filing for bankruptcy in 2008, and Edward Asner plays rich dude Warren Buffett. It’s one of those scary, riveting, distressing, memorable, well-acted movies that should be owned by every movie collector and seen by every adult who votes.

As I watched the film, I couldn’t help thinking, “This is the kind of unbridled greed and myopic misperception that has people taking to the streets across America.” (Yes, this is how I think when I watch thought-provoking movies with my sweetheart.) I also wondered how many Americans know that we really were teetering on the brink of another Great Depression in 2008.

Don’t listen to any misguided Tea Bagger who insists that “Obama’s government bailouts” are bankrupting this country. As the movie shows, the Troubled Assets Relief Program (TARP), which authorized public expenditures of $700 billion to strengthen the financial sector but didn’t allow for any oversight, was initially rejected by Congress but was modified and signed into law by Dubya on October 3, 2008 in response to the subprime mortgage crisis that occurred during the Bush administration.

And the GOP is the party that most often demonizes the government regulation that could have prevented this crisis; the movie opens with St. Ronnie of Reagan insisting that “we must come to grips with inefficient and burdensome regulations” and promising to “eliminate those that are unproductive and unnecessary.” (When Nixon’s character asks later why there was no regulation, Hurt’s character replies, “No one wanted it. They were making too much money.”)

(Yes, it was Bubba Clinton who repealed Glass-Steagall – the law separating commercial and investment banking that had been in effect since 1933 – in November of 1999, which some say contributed to the crisis. My response is that record budget deficits became record surpluses, 22 million new jobs were created, unemployment and inflation were at their lowest levels in more than 30 years, and America enjoyed the longest economic expansion in our history under Clinton.)

The movie shows Paulson and Bernanke questioning whether the bank dudes will spend the bailout money as it was intended – to make loans to consumers, thereby injecting money into the economy and restoring confidence in the market – since they were unwilling to accept the dough with any restrictions. (Nixon’s character is shown at one point asking incredulously, “They almost bring down the U.S. economy as we know it, but we can’t put restrictions on how they spend the $125 billion dollars we’re giving them because they might not take it?”)

They had good reason to worry. According to Reuters, companies that received bailout money had spent $114 million on lobbying and campaign contributions during 2008. And the Associated Press reported that banks which received bailout money “had compensated their top executives nearly $1.6 billion in 2007, including salaries, cash bonuses, stock options, and benefits including personal use of company jets and chauffeurs, home security, country club memberships, and professional money management.”

To their credit, some of the institutions receiving bailout funds – including JPMorgan Chase & Co., Morgan Stanley, American Express Co., Goldman Sachs Group Inc., U.S. Bancorp, Capital One Financial Corp., Bank of New York Mellon Corp., State Street Corp., Wells Fargo & Co. and Bank of America – repaid their TARP money. The U.S. Treasury’s “Financial Stability” website allows visitors to monitor TARP investments and track the total percentage of funds recovered.

At the end, we see this:

Following the passage of TARP, banks made fewer loans and markets continued to tumble.

Unemployment rose to over 10 percent and millions of families lost their homes to foreclosure.

In 2009, panicked markets stabilized and the slide into a global depression was averted.

The biggest banks repaid their TARP money.

In 2010, compensation on Wall Street rose to a record $135 billion.

Ten banks now hold 77 percent of all US bank assets.

They have been declared too big to fail.

Gee, I wonder how many of those people occupying Wall Street and major cities across the United States for the last seven weeks saw “Too Big to Fail.”

Bill Pullman, Paul Giamatti, Topher Grace, Cynthia Nixon, Michael O’Keefe and William Hurt