Cultural Caviar

The Bubble, Hollywood-Style

December 16, 2015

Multiple Pages
The Bubble, Hollywood-Style

The Big Short, a comedy starring Christian Bale, Steve Carell, Ryan Gosling, and Brad Pitt as finance-industry renegades betting against the Housing Bubble in 2005–08, is another in the rather improbable new genre of nonfiction feature films that display the business world with more complexity than Hollywood dared before this decade. Based on the 2010 best-seller by Michael Lewis, the king of Frequent Flyer books (e.g., Moneyball and The Blind Side), The Big Short pushes the envelope of just how many acronyms for abstract financial instruments (such as MBS and CDO) a popcorn-eating audience can digest.

In the past, movies about corporations (for instance, George Clooney’s 2007 Michael Clayton) typically had to shove in a murder or two to keep the audience focused, even though corporate yuppies don’t actually kill people very often. 

I root for the continued evolution of better middlebrow movies that teach you about specialized fields. (Keep in mind that the term “middlebrow” means, in essence, entertainment that is primarily informative rather than aesthetic, such as the novels of James Michener and Tom Clancy. The intended audience for middlebrow culture is well above average in IQ.)

For example, sports movies are a lot more intelligent today than when I was a child in the 1960s. Back then, Hollywood seemed to assume that the mass audience couldn’t be expected to comprehend much about the game itself. Even 1976’s Rocky, for example, while a brilliant satire on the business of boxing, featured a match in which getting slammed relentlessly in the face for 15 rounds by the heavyweight champion of the world was portrayed not as something to, ideally, avoid (by, say, blocking the punches with your gloves or, you know, ducking), but as a test of one’s moral character.

The Big Short doesn’t wholly overcome the problems inherent in a film largely about high-IQ men talking about collateralized debt obligations in conference rooms.”

It was not until perhaps Ron Shelton’s 1988 baseball movie Bull Durham that screenwriters of sports films were permitted to show off that they understood far more about the sport than the average moviegoer.

The middlebrow business-film genre was jolted to life in 2010 with the Mark Zuckerberg biopic The Social Network, written by Aaron Sorkin working from depositions to avoid lawsuits. Sorkin then topped himself with Lewis’ baseball-statistics tale Moneyball for Brad Pitt. But this fall Sorkin’s latest, the fine Steve Jobs, tanked at the box office, suggesting that supply may outrun demand.

Business movies face an even bigger challenge than sports movies in that the most common way to make a fortune is to become expert at a field where there’s more demand than supply: a career that’s complex, esoteric, and less broadly interesting than common movie jobs such as cowboy, detective, gangster, or superhero.

For instance, being a Wall Street financier pays so well in part because it demands two different mental modes that seldom coincide: a talent for abstract thinking and an aggressively masculine urge to crush the competition. There are plenty of guys selling cars who have the right personalities for Wall Street, and a few guys doing rocket science who can think creatively about abstractions of abstractions, but the supply of individuals at the intersection is so limited that they can command absurd bonuses.

Ryan Gosling, for example, plays The Big Short’s semifictional narrator, a smug sales bro who stumbles upon a brilliant idea invented by the eccentric Dr. Michael Burry (a twitchy and affecting Christian Bale). Gosling teams up with Steve Carell’s “angriest hedge fund manager in New York” to short (bet against) mortgage-backed securities. Eventually, Sand State mortgages precipitate the world economic collapse of 2008 and Gosling collects a bonus check for $47 million for having the testosterone level to bet against the American Dream and the IQ to keep straight in his head what a credit default swap is.

Writer-director Adam McKay, Will Ferrell’s collaborator on Anchorman, utilizes various fourth-wall-breaking shticks to explain the jargon, such as random celebrities popping up to lecture the audience directly. Unfortunately, this seems condescending. In contrast, Sorkin’s go-to technique is redundancy with variation: keep explaining what, say, the OPS statistic means over and over in emotionally charged conversations among movie stars until the audience figures it out. Sorkin’s best Frequent Flyer screenplays leave you feeling smarter, while The Big Short left me with the sinking feeling that I no longer understand concepts that I once imagined I grasped.

Another problem is that McKay sticks too closely to Lewis’ book. Thus two of the stars, Bale and Pitt, never meet up with any other stars because that’s the way it happened in real life. The movie needs an Assemble the Samurai sequence like in Ocean’s Eleven. It’s as if in Heat De Niro and Pacino never do finally get in the same scene.

This is not to say that The Big Short is a bad movie, just that it doesn’t wholly overcome the problems inherent in a film largely about high-IQ men talking about collateralized debt obligations in conference rooms.

One problem with The Big Short is that the Housing Bubble didn’t actually take place where the movie is set: in New York and Silicon Valley, two locales where home prices are higher today than in 2006. Instead, it mostly transpired in lower-middle-class exurbs. As Lewis wrote, “The CDO was, in effect, a credit laundering service for the residents of Lower Middle Class America…. How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans.”

The Bubble especially happened in areas with huge influxes from south of the border.

Thus, the best interludes are when the smart guys take two road trips to the Sand States to meet us dumb Americans. In one, several stars go to a convention in Las Vegas to learn if the mortgage industry is stocked by geniuses who have figured out some new kind of math. In case you are wondering: It’s not. (The Big Short could have used more scenes of overconfident sales dudes. Indeed, the film would be better if there were a big role perfect for that living embodiment of Bush-era cluelessness, Will Ferrell.)

And, in a sequence reminiscent of my 2008 short story “Unreal Estate,” Carell’s boys visit an exurban housing development outside Miami to see if the Housing Bubble is as dubious in plasterboard as it seems on paper. A brand-new McMansion turns out to be home to a tattooed mixed-race renter. The implication is presumably that no greater fool will come along to pay $600,000 to live next to a tow-truck driver, but McKay, an irate but timid Bernie Sanders fan, wimps out at making this clear. (Lewis, a protégé of Tom Wolfe, appears to be a closeted conservative, but I doubt if McKay has noticed.)

In reality, the essential cause of the Housing Bubble in what Lewis dubbed the Sand States—Florida, California, Arizona, and Nevada—was that the quantity of population was climbing fast enough due to Third World immigration to seemingly rationalize the higher prices, but the quality of the increasingly diverse population was declining. But under the rules of political correctness, nobody was allowed to articulate this in public. Instead, George W. Bush lectured his federal regulators that the real problems with the mortgage market were instead that racist rules about down payments and income documentation were redlining minorities out of their American Dreams.

Lewis’ 2008 article “The End,” the basis for his 2010 book, explains:

In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000…. Eisman [Carell] knew some of these people. One day, his housekeeper, a South American woman, told him that she was planning to buy a townhouse in Queens. “The price was absurd, and they were giving her a low-down-payment option-ARM,” says Eisman, who talked her into taking out a conventional fixed-rate mortgage. Next, the baby nurse he’d hired back in 1997 to take care of his newborn twin daughters phoned him. “She was this lovely woman from Jamaica,” he says. “One day she calls me and says she and her sister own five townhouses in Queens.”

But you won’t see any of that in McKay’s movie version.

Therefore, after all these years, McKay remains unsure whether the mortgage meltdown was due to fraud or stupidity. But Occam’s razor suggests that long-term ignorance and deceit is caused by taboo: Our most sacred value today is diversity, so that was the one cause we weren’t allowed to question.

And we still aren’t.

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