Too Big to Fail
By Andrew Ross Sorkin
Viking, 624 pp., $32.95
As the recent election proved, Americans are still angry about the taxpayer bailout of Wall Street. Much of that anger is probably misplaced: Economists generally agree that George W. Bush's rescue efforts averted a full-blown depression. Besides, the bailout will cost only a fraction of its initial $787 billion price tag.
But Tea Partiers still have plenty to be angry at in Too Big To Fail, Andrew Ross Sorkin's minute-by-minute account of the efforts to avert financial collapse. Sorkin, a New York Times business columnist who visits Pittsburgh on Nov. 15, gives an inside look at the government's interventions in the marketplace. The hated Troubled Asset Recovery Program (TARP) may have been the least of them. Government officials sought to compel firms to help competitors, forced mergers that were more like shotgun marriages -- and even demanded firms file for bankruptcy.
In Sorkin's telling, Wall Street execs occasionally express dismay at such tactics: "This is practically socialism!" one frets. But their devotion to free-market principles doesn't prevent them from seeking taxpayer dollars themselves, or cashing in on the misery. ("He doesn't want to save this country!" laments former Treasury Secretary Henry Paulson, upon learning a Wall Street dealmaker might be acting out of greed.)
But there are surprisingly few assholes in Too Big To Fail: Incompetence is much more common. (Dick Fuld, the head of now-defunct Lehman Brothers, cuts a King Lear figure -- bemoaning his fate as all around him scheme to divvy up his kingdom.) Is that because the book focuses on efforts to save the financial system, rather than on the sins which jeopardized it to begin with? Or is it because, as a 2009 New York magazine piece suggested, Sorkin might be too well connected with Wall Street's titans?
For good and ill, Fail positions Sorkin as the Bob Woodward of business reporting, featuring scenes that recreate every raised eyebrow, every one of Paulson's dry heaves. But as with Woodward's inside accounts of Washington, Sorkin wasn't at many of those scenes, and few of his interviewees would go on the record. (Many are, after all, facing lawsuits.)
But such chumminess may be inevitable in a story about one of the world's most exclusive clubs, where millionaires chafe at years-old snubs of their wives. And as Sorkin suggests, "As sophisticated as the world's markets have become, the glue that holds the entire arrangement together remains old-fashioned trust."
As to how much trust the rest of us should have, Too Big to Fail mostly hedges. Sorkin contends that Paulson and Co. did the best they could, making deals because it was too late to make regulations. He adds, though, that while politicians have "a rare opportunity to examine and introduce reforms" to the financial system, "there is a danger that this once-in-a-generation opportunity will be squandered." That seems more likely now: Voter anger at the bailout, ironically, has empowered politicians who don't see the point of heading off another collapse.
Andrew Ross Sorkin at the Drue Heinz Lecture Series. 7:30 p.m. Mon., Nov. 15. Carnegie Music Hall, 4400 Forbes Ave., Oakland. $10-25. 412-622-8866 or www.pittsburghlectures.org
- Andrew Ross Sorkin