‘Too Big To Fail’ Movie Review: Hank Paulson’s Legacy

I finally saw HBO’s Too Big To Fail, a movie based on Andrew Ross Sorkin’s book of the same name. It was about Treasury Secretary Hank Paulson’s enactment of TARP during the darkest days of the financial crisis, and begins with Treasury taking over Fannie and Freddie on Sunday, September 7, 2008.

That day, my wife and I checked into the hospital to deliver our first baby. Watching the movie brought it all back for me: a retail mortgage banker sitting on my cot in that hospital room, waiting for our baby induction process to run its course, trying to write clearly about how the U.S. mortgage market backstops had just failed. Today, I offer a few thoughts on the real life events versus the movie.

I just re-read lots of my daily posts from those months. I’m not surprised a few posts are off-the-mark given the market chaos of the day. But I stand by my Paulson writings, and I think HBO properly conveyed his execution of an impossibly complex role.

Of all my Paulson/TARP posts, this one from January 19, 2009—the last day of Paulson’s tenure—sums up TARP and Paulson’s role the most clearly. It’s also the most interesting to compare to HBO’s take on Paulson. Here’s an excerpt:

As we said at the time: “just like an emergency room team changes constantly to adapt to the needs of sick or dying patients, these Treasury strategy changes are standard in any crisis.” That’s when Paulson defended this triage approach:

“I will never apologize for changing a strategy or an approach if the facts change.

…First and foremost, because the system remains fragile, we must continue to stand ready to prevent systemic failures. That is the basis for Monday’s action to purchase preferred shares in AIG.”

So to us, that’s his lasting legacy, for better or worse. But legacies are only as good as the stories that are told, and the stories are only as good as the actual facts. When Paulson is judged in the future, most of the facts will be lost to chatter and partisan positioning.

Remarkably ‘Too Big To Fail’ director Curtis Hanson (8 Mile, LA Confidential) didn’t lose the facts after all this time. He captured fact that Paulson saved the economy from collapsing, and conveyed supporting facts without making Paulson out to be some hero.

This is exactly what I was trying to do at the time … because Paulson is no hero for the regular guy. He was presiding over Goldman Sachs during the deregulatory era. But he’s perhaps the only guy powerful and credible enough to get heavyweight bank CEOs to do what was needed during that precarious time.

People will always deride Paulson and the Wall Street establishment—and deride me and others who think Paulson did the right thing—but that’s precisely why it’s so interesting that the “liberal Hollywood establishment” took a documentary approach that preserves Paulson’s legacy. And I say Bravo to Curtis Hanson.