The Césars happened last night, the Oscars are tomorrow. This is one of the eight films nominated for Best Picture, which I saw last month (I would imagine that anyone with an interest in seeing it has by now). I thought it was entertaining, well-acted—though Christian Bale’s Michael Burry character got on my nerves—and had a good, multifaceted message to convey about the roots of the 2008 financial crisis, one of the facets being that it wasn’t obvious who precisely was responsible for the near collapse of the world economy: the greedy traders who made a killing during the housing bubble did not create that situation—they merely took advantage of opportunities that presented themselves—but, also, that not every last person in the world of finance was a scurrilous, amoral scumbag. A few did have a conscience. I won’t say that I understood all of the film’s finance mumbo-jumbo, and with the pedagogical exercise by Salena Gomez and Dr. Richard Thaler at the blackjack table not helping much (or, rather, I thought I got its explanation, until I got lost again). On this, I don’t imagine I was alone; even the family member with whom I saw the pic, who has an MBA and does a lot of online trading—he’s riveted to the CNBC ticker a few hours a day—said a lot of the insider fast talk about collateralized debt obligations, derivative mortgage securities, and credit default swaps was over his head. To try to make sense of all this, Michael Lewis’s articles and books on the general subject are a better bet than the movie (he’s a great writer and a pleasure to read).
The big question about the film, naturally, is how accurate its portrayal of its subject is. On this, one turns not to film critics but to economists and economic journalists. The short answer: yes, the film does basically get it right (though there are naturally differing views on this). Here are some of the analyses I came across:
Paul Krugman, “‘The Big Short,’ Housing Bubbles and Retold Lies.”
Neil Irwin (NY Times senior economics correspondent), “What ‘The Big Short’ Gets Right, and Wrong, About the Housing Bubble”
Dean Baker, “‘The Big Short’: A Tale of Stupidity, Greed, and Corruption.” Also this by Baker: “The Big Short, the Housing Bubble and the Financial Crisis.”
Matthew Yglesias, “The Big Short tells a complicated story, but the Great Recession is very simple.”
Todd VanDerWerff (Vox culture editor), “The Big Short turns the financial collapse into an angry, funny, sad underdog story: It’s not perfect, but it’s still essential viewing.” See also this by VanDerWerff: “Big Short director Adam McKay talks about finding the humor in the financial collapse.” The lede: “[These guys] were doing their job. They foolishly believed that the market was fair.”
A libertarian view: Tyler Cowen (George Mason U. econ prof) reviews ‘The Big Short’.
A French Keynesian view: Christian Chavagneux (editorialist at Alternatives Économiques), “‘The Big Short’ ou comment gagner des milliards en pariant contre la finance.”
A critical view: Michael Grunwald (Politico Magazine staff writer), “What ‘The Big Short’ Gets Wrong: How a heroic effort to explain finance whiffs on the big message of the crisis.”
An alternative view: David Beckworth (adjunct scholar at the Cato Institute) and Ramesh Ponnuru (visiting fellow at the American Enterprise Institute), “Subprime Reasoning on Housing.”