Last week I finally got a chance to finish Too Big To Fail, Andrew Ross Sorkin’s tome on the collapse of Lehman Brothers, the TARP bailout, and other events in the second half of 2008. Sorkin, the editor of the New York Times’ Dealbook column, pieced together his narrative through hundreds of hours of interviews as well as a complete canvassing of existing primary and secondary sources, and the book is all the richer for the effort. Despite its relative recency, there has been no shortage of books on the financial crisis, but Too Big To Fail, with its comprehensive first hand accounts and meticulous attention to detail, is could very well become the definitive source for the events of late 2008 and early 2009.
Sorkin is a reporter by trade – this is his first full-length publication – and his background is reflected in the style. He tells his story with a degree of journalistic detachment, reporting the events and dialogue as a third-party observer. The narrative cascades fluidly between Manhattan, Greenwich, and Washington in lean, 1-2 page scenes dense with dialogue and with Sorkin’s editorial viewpoints kept to a minimum. This is to Sorkin’s credit: because of the quality and comprehensiveness of his research, the characters are painted by their own attributes, actions, and dialogue, and the reader comes away contentedly feeling that he has been left free to judge the characters and events for himself.
The omniscience of Sorkin’s narrator makes for gripping story-telling. He acknowledges that his dialogue may not all be verbatim, given the imperfections of memory, but he has a keen eye for moving scenes forward while also keeping the reader in suspense. Meanwhile, the story is laced with innumerable details that make the scenes almost palpable: the Lehman executives nervously eating steaks from the Palm in their offices on a Sunday afternoon; the $180 bottle of French wine cracked open by one of Morgan Stanley’s co-presidents to lighten the tension in his apartment preceding a secret meeting with Lehman; the appetizers ordered by John Mack and his team from San Pietro, his favorite Italian restaurant.
Moreover, the nature of the storytelling – frenetic, fast-paced, and spontaneous – does justice to the underlying nature of the events Sorkin seeks to relate. Indeed, the depiction of precisely how quickly things happened in the weeks surrounding Lehman’s collapse, and how frantically regulators and financiers improvised solutions, is one of the triumphs of this book. Events truly were transpiring by the minute: the entire merger agreement between Bank of America and Merrill Lynch was orchestrated from start to finish in under 48 hours; the original TARP legislation – a 3-page document that many legislators mistook for the talking points rather than the actual proposed bill – was cobbled together by Paulson’s team in a matter of hours; AIG was hemorrhaging billions of dollars of capital by the hour. Teams from the Fed and Treasury worked non-stop, sleeping a couple hours a night on couches wherever they could find them. For readers used to the distilled, oversimplified, post-hoc version of events relayed on network news, Sorkin’s narrative provides a refreshing glimpse into the fundamental disorganization of events as they happened in real-time.
And yet, for all the detachment of Sorkin’s storytelling, one cannot help but come away from the book with overwhelming biases towards certain key people. Dick Fuld is painted as a tragically short-sighted, naive CEO blinded by his own (albeit genuine) desires to save the firm he loved, who wastes his last efforts grasping for hail-mary salvation attempts rather than rationally addressing the fundamental problems at the company’s core. AIG’s management team, and its former CEO Bob Willumstad in particular, are hopelessly – almost criminally – inept, unable to grasp even the basic mathematical realities of the company and lacking any sense of urgency in the face of impending catastrophe. Ken Lewis of Bank of America is the consummate deal-maker, calculated and meticulous in his negotiations, while John Mack of Morgan Stanley acts with a constrasting degree of impetuousness. The British government, in their last-second kiboshing of a deal between Lehman and Barclays that would have saved the doomed bank and precluded much of the ensuing panic, show a staggering obliviousness to the realities of the financial system. And above all, Hank Paulson shows himself to be a determined regulator with a ferocious work ethic who, for all his shortcomings in communication skills, wanted nothing more than simply to keep the economy afloat and was willing to push himself to the extremes of physical exhaustion and political feasibility to achieve that goal.
Ultimately, that is the message the reader takes away from Sorkin’s book: the world truly was on the brink of calamity, and it was the efforts of the regulators – Paulson at Treasury, Geithner and Bernanke of the Fed, Sheila Bair of the FDIC, and their staffs – who fought through the mayhem, herded the necessary cats, and kept things from becoming any worse than they did. It has been pointed out by several observers what a thankless job it is to be a regulator, since no one can ever receive credit for a crisis averted; after all, we cannot possibly know the precise location or height of the cliff if we do not, in fact, drive off of it. But Too Big To Fail leaves the reader with the feeling that we truly did stand teetering on the edge of the abyss, to be held up only by the efforts of those behind the rescue.
