Review: Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System - and Themselves (Andrew Ross Sorkin)

This might be a first: a review that is both late (the book was published by Viking in 2009) and early (a HBO movie based on the book will be released in May).  But I finished the book several weeks ago and I offer this review while it remains relatively fresh in mind. I picked up my copy of Andrew Ross Sorkin’s Too Big To Fail (TBTF) at an airport bookstore after failing to bring enough reading material for my entire trip.  I was looking for Michael Lewis’ The Big Short  as part of an ongoing effort to wrap my head around the world of Wall Street finance. Not that understanding the basics of CDOs, credit default swaps, naked option writing, and assorted other obtuse financial instruments will help me save the world, but at least I’ll be able to follow along the next time it crashes.  Anyway, Lewis’ book was only available in hardcover and in these financial times, I passed on paying hardcover prices.  Sitting on the shelf next to The Big Short, however, was the paperback edition of TBTF.  I’m still looking forward to reading The Big Short (hint: someone has a birthday coming up), but TBTF did not disappoint.

Sorkin is a New York Times columnist and reporter who looks like he’s still in high school (he claims he’s 34).  The book, despite its bulk (the paperback version has 640 pages) was short on technical details about financial instruments and how they work, which was my primary motivation for picking it up.  Rather, TBTF is all about behind-the-scenes drama of the October 2008 implosion of Wall Street and how the Fed, Treasury, and a host of Wall Street characters struck (or in the case of some, failed to strike) deals that avoided complete failure of the Wall Street banking system.  Sorkin’s sources reveal an amazing story.  Greed, hubris, and incompetence are all on display.  Ben Bernanke, Henry Paulson, Timothy Geithner, Richard Fuld, Jamie Dimon, and Warren Buffet are among the primary characters.  (Bonus fact: in the HBO film, Paul Giamatti will play Bernanke and Ed Asner will be Warren Buffet).

While I wish Sorkin had provided more technical background to help wannabe financial nerds like me understand how Wall Street got itself into the mess it did, he more than adequately introduces us to the folks who screwed this up and those who stopped the collapse from becoming more widespread.  In the end, I was left wishing TBTF would have made the case for why all of this even mattered.  Sorkin seems to accept as an article of faith that saving Wall Street was necessary.  Yes, markets would have been disrupted and credit would dry up, at least temporarily.  But why would we not assume that some new system would emerge in its place?  I would have appreciated someone with Sorkin’s insight persuading me that bailing out the billionaires who screwed up the system was worth it. The bottom line, though, is that TBTF is a compelling drama and tells an important story that helps inform the broader picture of the present economic times.

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