In 2008, when the stock market crumbled, Andrew Ross Sorkin was there to survey the wreckage. As the chief mergers and acquisitions reporter for the New York Times, Sorkin is one the leading authorities on the complicated world of high finance in the United States. His best-selling book “Too Big to Fail,” now in its second printing as a trade paperback, is an engrossing, character-driven account of the personalities who sent our economy into a tailspin – and then saved us from a depression.
Sorkin has many thoughts on the American financial system, and he will share them with visitors to the Festival of the Arts Boca at 7 p.m. March 16 at Mizner Park Amphitheater (tickets are $35 to $50). Sorkin shared some of his insights with Boca Raton.
Your lecture in Boca Raton is titled “How to Fix the Financial System.” So … how do we fix it? And can the solution fit on a bumper sticker?
The solution fits on a couple of bumper stickers. “End Too Big To Fail.” “Jobs, Jobs, Jobs.” “Make More, Spend Less.” How we do all of that is the complicated part – and that’s what I’ll be talking about.
Wall Street deal-making is an extremely complex business, and I applaud you for diving into with such a incredible knowledge base. What made you interested in this line of reporting in the first place?
I am fascinated by colorful characters, and Wall Street is chockfull of them. It makes for interesting stories. The influence and power of Wall Street during the last decade on the world –both good and bad – has made it a remarkable world to cover.
Reading your book, I get a sense of Shakespearean tragedy – a bunch of power-mad kings unseated from their thrones, with cooked books and deflating egos. Was it important for you to think of them as characters in a fiction – and to frame the story in a way that evokes novels and plays, rather than, say, a 600-page CNBC news scroll?
I grew up admiring books like “Barbarians at the Gate” and “Den of Thieves,” which to me read like novels or movie scripts. My goal with “Too Big to Fail” was to tell a human drama about people who thought they were too big to fail. I wanted to bring the public inside the room so we could see what actually happened. We often think that the world of finance as about massive, faceless institutions, but at base, it is run by people. Understanding the psyche of those people, their motivations – and yes, their conflicts – was my goal.
Do you believe government intervention was the only way to stanch the hemorrhage caused by the banks?
Based on my reporting, yes, I am convinced that the bailouts actually worked, as politically unpopular as that may be. That’s not to say they were executed perfectly, but on the whole, the bailouts kept the economy from going off of the cliff. Things would have been much, much worse without them.
Did you come to like any of the CEOs and government officials you wrote about in “Too Big to Fail,” even if their decisions helped create a recession?
I like some of them and probably dislike some of them. But I tried to write about these individuals objectively and dispassionately without letting the reader know my personal view. I love when certain readers come away from the book loving one character and another reader comes away from the book hating the same character. Like real life, nobody is black and white. There’s always a lot of grey – and that’s the most interesting part of any story.
There has been a lot of outrage across the left and the right that none of the people who caused the recession have gone to jail. It’s something that seems to unite Occupy Wall Street and the Tea Party. Do you think they should serve time?
The economic crisis feels like a crime, no doubt. I understand that impulse. But for better or worse, I have yet to find an example of a CEO breaking the law, as hard as that may be to imagine given the collapse of the economy. Of course, I found lots of examples of ethical lapses – and I’m putting that politely. Prosecutors and my fellow journalists and have been searching for a CEO criminal for years. But we haven’t found it.
Some people think the laws should be changed. Do you believe Wall Street has genuinely cleaned up its act and changed its ways since the meltdown? Have the bankers learned their lesson?
If you has asked me this question two years ago, I would have said no. But Wall Street actually is slowly changing. Just look at the quarterly reports: The banks are making a lot less money, there is a lot less leverage in the system and the eye-popping compensation numbers you heard about have been cut in half. That’s not to say bonuses aren’t still out of whack with the rest of the world or that we’ve solved all of our problems – we haven’t – but the industry has been forced to clean itself up by many of the new regulations. Are the events you wrote about in your book still reverberating and having an impact on the 2012 presidential race? Absolutely! Just look at the rhetoric on both sides of the isles: The Republicans are pushing free-market capitalism and the Democrats are calling for “fairness,” which is right out of the Occupy Wall Street playbook.So the issues that the 2008 crisis raised haven’t gone away.
The makers of the HBO film “Too Big to Fail” had the impossible task of trimming your epic book into a comparatively bite-sized two hours. How did they do?
Was the casting accurate? I was very happy with the picture. I worked on it as a co-producer so I had an opportunity to participate in its development. I thought William Hurt played Hank Paulson spectacularly, and Paul Giamatti was almost a spitting image of Ben Bernanke.