Never Too Big To Fail Movie Review Examples

This film dramatized the American economic collapse of 2008. The collapse, and the subsequent "government bailout", was precipitated by a number of factors. As pointed out in the actual drama of "Too Big to Fail", the combination of unregulated banking practices and lax requirements for consumer credit created an economic meltdown that had worldwide repercussions.
During the short period that led up to the so-called TARP (Troubled Asset Relief Program), colossal mortgage bankers were in the practice of underwriting mortgages for both commercial and residential properties, such as houses, condos, and retail space. Mortgage insurance companies, like the behemoth AIG, backed the loans with a type of default insurance. The mortgage debt, or notes, were insured by these "risk management" firms. When homeowners could not afford to pay their loans AND as housing values plummeted, the notes that the lenders held had little value and the insurers, who were also buying the notes, were over-invested. Both the big banks and the mortgage insurance companies failed to anticipate a so-called real estate "bust" -- a precipitous end to the upward trend in housing values.
The film chronicled the "real-life" dynamics between major players during the crash. Henry "Hank" Paulson, who served as the Secretary of the Treasury during this period, served as an integral figure as bank C.E.O.s, economic advisors, Congressmen, and the Federal Reserve worked together (but usually worked apart) tried to avert a global economic catastrophe.
The explicit goal of the failing mortgage banks was a cash infusion. Nearly all of them suffered from tumbling stock prices and "toxic assets" that could not be liquidated. This lack of cash translated to a frozen credit line, meaning that the banks could not make further loans, and perhaps more importantly, the banks could not pay their obligations and debts, mainly to their investors and depositors. Without cash and the "good faith" of those with cash holdings in the banks, "making a run" on the banks, i.e. withdrawing all cash deposits from the bank simultaneously, and rendering the banks insolvent with an ever-increasing need for cash to pay their depositors, became a real possibility. A panicked global economy as well as a meltdown seemed inevitable, not to mention painting the scene for yet another "Great Depression".
It seems peculiar that this situation arose in the first place. In the film, there was some scapegoating on the part of the Treasury advisors and the banks. They made allusions to the demand for "easy consumer credit" so that Americans could realize a guaranteed American Dream. However, the banking and securities industry seemed to deny any culpability in the fiasco, and worse, considered the woes they created in terms of risky lending practices to be merely a "moral hazard".
In fact, their risky lending practices were allowed by a Federal Government that failed to regulate the banking industry, especially the big banks. The film showed the climax of many years of unscrupulous lending practices to people with shaky means to pay back their mortgages. During that time, the film mentions that Secretary Paulson had served as the C.E.O. of Goldman Sachs. His later post as Treasury Secretary is, at the least, a conflict of interest for Paulson, who could have, using his power, set the table in the favor of his old bosses. Corruption and croneyism were the name of the game in this film. Unfortunately, it was greed that was the
undoing of the big banks as well as the consumers who obtained a cheap and easy line of credit without effort.
A system of checks and balances to the escalating need for capital was missing from the very beginning. Paulson, from what I observed, was a co-conspirator of a collapse that had been years in the making. The introduction played highlights of speeches made by President Reagan as well as President Bill Clinton, an overt suggestion that the dynamics of private sector and public sector collusion and resultant corruption had been forged at least 25 to 30 years ago.
There should have been more regulation to keep the banks at bay. Their suspicious lending practices contributed to their demise, practices that were based on one human failing, greed. While greed could not have been regulated out of the equation, it certainly seems that a more watchful government as well as a Securities and Exchange Commission that was more diligent at enforcement would have been possible corrections to a moral compass that had spun way out of control.
Ultimately, a complete meltdown was averted as the big banks reluctantly accepted the Treasury Department's deal, a Department that had been their bedfellow during the entire film. They begrudgingly accepted being partly "socialized". One banker even erupted and objected on the basis that he and other executives would receive less compensation in terms of bonuses. It was utterly shameful that the banking industry thought -- and probably thought correctly -- that they had enough clout to persuade Congress with a 3-page "bailout proposal". Again, the case seems to have been that banking executives and stakeholders, the Congress, the Treasury Department, and the bill's signer, President George W. Bush, may have made the
wrong decision based on avarice and greed. Instead, it was more expedient to make big banks bigger as well as letting them practice under a cloak of secrecy.
In the end, it was left uncertain whether the government's money, i.e. the taxpayer's money, may have been used for further lending or whether the banks hoarded the money to protect themselves against further risk. Also, after a few big banks had collapsed, the film's quote at the end said that "they were too big to fail". This begs the question: what, then, is the definition of a small bank? And, will banks that are not big enough fail again with much more disastrous consequences?
Most likely, it is a dynamic that is doomed to repeat itself. There has never been a philosophic solution or a regulation or an Act of Congress that has eliminated human failings such as greed.