The Deal Economy 2013

Home | Event | Blog | Awards

Share | Discuss | Reprint

Sorkin's "Too Big to Fail"

by Robert Teitelman | Published August 5, 2010 at 4:44 PM

Too Big to Fail
by Andrew Ross Sorkin

Andrew Ross Sorkin's "Too Big to Fail" is a big, ambitious book that tries to establish by sheer accumulation of detail and anecdote primacy to explain what exactly happened during the crisis-wracked months of 2008. Sorkin offers critics lots of material to quibble over: Despite his elaborate apparatus, it's difficult to tell how accurate this long narrative of anecdote and dialogue really is, particularly when he indulges in the compressed, charged language of an it-was-a-dark-and-stormy-night thriller: There was a collective gasp on the phone. Collective? Was there a consensus on that?

Sorkin constructs a deceptively smooth surface over more complicated depths. On one hand, he invites readers into a straightforward narrative: Trust me, he seems to say as his story begins, this is what happened. But the technique, which has been employed by everyone from Bob Woodward to James Stewart, also leads readers (particularly those who were in the room or on the calls, that is, those who talked to him and those who refused) to wonder at nearly every turn: So who blabbed? Who told Sorkin that? Was it corroborated? When Dick Fuld thought, Yep, this was going to be a real shit-storm, did he actually remember thinking those exact italicized words and told Sorkin? Do we trust Fuld to recall the exact vulgarity? Does Fuld think in vulgarities?

Sorkin has thus produced a book not unlike the iconic "Barbarians at the Gate" (a similarity Sorkin's publishers seem to encourage, with a red-and-black cover like the earlier book) that will be the beginning, not the end, of speculation about how to interpret these events. There is a big difference, however. "Barbarians" was really the only book written about the RJR Nabisco leveraged buyout, while "Too Big to Fail" is coming out in the midst of a flock of books, newspaper and magazine stories that purport to tell what occurred in those crisis months. Various "counterstories" to "Barbarians" grew and deepened over the years among small, private circles that had been closely involved with the RJR deal, based on theories about who talked and why; counterstories to Sorkin and others will be as much a matter of historical record as private speculation. This already mounting literature clearly shapes Sorkin's narrative, as "Too Big to Fail" will inevitably affect others. In some cases, the same meetings, the same events, are described. And so there's another layer of complexity here: not only trying to figure out which sources impressed their views on the book, but whether Sorkin's version holds up against reporting outside his book.

All this is not to say Sorkin hasn't produced a fascinating narrative, particularly given the rapidity in which he reported and wrote it. There are occasional mistakes and typos; but generally, the action sweeps along, and it has an air of credibility. The events were dramatic and tightly coupled; for the "characters" in the book, there seems to be no escape, as one crisis, like American International Group Inc. (NYSE:AIG), begins before an earlier crisis, the fall of Lehman Brothers Holdings Inc., is resolved. The unceasing tension is a little exhausting, lightened only by the knowledge that we know how it came out. For those interested in the big machers of Wall Street and Washington, Sorkin provides masses of anecdotal detail. There's the New York Federal Reserve's dingy little bedroom Tim Geithner uses. There's the fact that Bob Steel of Wachovia (formerly of Goldman, Sachs & Co. [NYSE:GS]) never got along with Goldman CEO Lloyd Blankfein. There's the enmity between former Goldman banker J.C. Flowers and Treasury Secretary (and former Goldmanite) Henry Paulson. There are details about Jamie Dimon's ouster from Citigroup Inc. (NYSE:C) involving a confrontation with Deryck Maughn that I don't recall ever seeing. There's the disarray of AIG executives and the contempt of its J.P. Morgan Chase & Co. (NYSE:JPM)_ advisers. There's John Mack's affection for Dick Fuld. There's Mack's wife buying wraps for a secret (and ultimately absurd) meeting at Mack's home between Lehman and Morgan Stanley (NYSE:MS) executives to discuss a deal. Wraps!

Sorkin offers little overt interpretation. He creates characters by accumulating details. Sometimes, he establishes character in a single line: Steel's notion that Paulson would work harder than any man alive but had little emotional quotient will stay with the former Treasury secretary for a long time. Personalities, like events, are nailed down by a process of triangulation, as characters weigh in on one another. That said no character in the book has much in the way of depth. In "Too Big to Fail," like a commercial thriller, character is action. You are what you do, say, dress, act. Rationales and justifications are quick and convenient; rarely does an introspective thought impede the flow of the story. Mack feels bad about Fuld. Paulson hates Congress. Everyone is tired, jetlagged, stressed. How to get some sleep is a big subject. Food is another. Wraps!

The judgments of "Too Big to Fail" involve performance. Not surprisingly, there are no huge shocks here, since we know who survived and who crashed, who succeeded and who failed. The revelations again come in the details, like Paulson's impromptu evening get-together with the Goldman board in Moscow, Warren Buffett's mortar rounds of good sense or Mack's anger at Geithner, who comes off as a callow, robotic pain-in-the-ass who snaps out orders, no matter how silly, on the phone, then hangs up before the other end can reply. (Geithner's relationship with Bernanke also remains a mystery: Was he taking orders or acting on his own volition?) Fuld failed, despite his hapless, if tortured, efforts and can barely be redeemed, although Sorkin offers sympathy in the end. Mack saves Morgan Stanley and gains stature as a standup guy.

Paulson, who's really a central character here, is more complex: patriotic, panicked, bullying, clueless, inexorable, a smart, driven guy put into a complex role he was not particularly suited for -- though he saves the world in the end, albeit just after he almost destroys it. Despite the Moscow meeting, there is no sense that Paulson consciously schemes for Goldman's benefit; the situation is simply too chaotic to get a decent conspiracy going. In fact, nobody seems capable of getting even simple schemes to gel. But for all his ubiquity, we also get little sense of how Paulson regards his boss, the distant George W. Bush and the White House, or even, past a few comments, the elements of his political beliefs (yeah, he likes birds). For his part, Ben Bernanke is almost invisible (he obviously spent time talking to David Wessel for "In Fed We Trust," in which he got to be a star) and Geithner, always around, is opaque. Generally, the major regulators - Bernanke, Geithner, Paulson, Christopher Cox and Sheila Bair -- did not seem to have offered the same access as some of the Wall Street players, like Dimon, Fuld, Mack, Blankfein or AIG's Robert Willumstad. Or if they did, they were much more circumspect.

The emphasis on these characters as men of action implicitly makes this a very Wall Street book. Because the portraiture is compiled by a closed circle of participants, Sorkin produces a Wall Street measurement of worth. Sorkin tells of how these men -- and they are nearly all men, with the exception of a few assistants, secretaries and wives -- are trying to save one firm after another. He never really dwells on how they got to that point and to their own complicity in the disaster. Even Fuld rolls along as if he were the victim of some improbable meteor. As for the regulators, there's not much here to suggest they should have seen what was happening and acted sooner. The standard is always effectiveness: The single most derided character (which is saying a lot since there's ample dislike and contempt flying about) is the Securities and Exchange Commission's Cox who is regularly characterized as hapless, panicked and -- this is the far greater sin -- ineffectual. There is a claustrophobia to this book, not only in that we spend vast amounts of time locked into meetings, but that the action occurs within a bubble that only occasionally makes contact with an abstract world beyond where wives wait at home for fallen warriors (that would be Fuld) or answer phones (for Ken Lewis) or, nonmachers worry about unemployment and dislocation. In that sense, "Too Big to Fail" presents these events in the way its cast of characters might have wanted -- as the ultimate men-at-work story.

When you finish "Too Big to Fail" you end up with a far more complete sense of how these events unfolded than when you began, but not necessarily with a deeper understanding of the complex origins of this crisis and of where to go from here. It's true, that's not the book Sorkin set out to write. But it makes "Too Big to Fail" emblematic of this moment, with a recovery sputtering to life and Wall Street struggling to reconstruct the world that existed before subprime became a household word. Sorkin has successfully written an exciting narrative, impressively reported; but despite its historical relevance, it floats in time, neither tied deeply to the past or to the future. It's a drama of Wall Street, with a cast of giants. The fact that many of them might be anachronisms is another story altogether.

Share:

blog comments powered by Disqus

Free preview

This is only a preview of The Deal's sophisticated coverage. Explore the real-time intelligence as researched and reported on by our team of financial journalists with a license to The Deal Pipeline. Click here for more information.

Meet the journalists

Robert Teitelman

Editor in chief

Bob Teitelman, editor in chief and a member of the company’s executive committee, is responsible for editorial operations of print and electronic products. Contact

Movers & Shakers

Goldman, Sachs & Co. veteran Tracy Caliendo will join Bank of America Merrill Lynch in September as a managing director and head of Americas equity hedge fund services. For other updates launch today's Movers & shakers slideshow.

Video

Fewer deals despite discount debt

When will companies stop refinancing and jump back into M&A? More video

Free preview

Editor in chief

Movers & Shakers

Sectors