Too Big to Fail - Book Review

Reviewed by Nahidur Rahman

Too Big to Fail - Inside the battle to save Wall Street, by Andrew Ross Sorkin, a New York Times chief mergers and acquisitions journalist, is a fascinating story about the collapse of the American and then the global financial markets in 2008. It is a reminder of just how close the worlds banking system came to a total meltdown, when Lehman Brothers crumbled and AIG crashed. The narrative is based on interviews the author conducted during and immediately after the financial crisis. These interviews took near enough 500 hours to conduct amongst 200 major players from the financial world. Along with the interviews, Sorkin managed to obtain documented tapes, notes, presentations, calendars, call logs, and more. The level of detail is nothing short of amazing with a moment-by-moment account of the calamity, which made the story prolonged; yet the author managed to keep things interesting.

Sorkin builds the story of how the financial collapse actually started. He initiates although most people are aware of the meltdown starting in and around September 2008; it actually started much earlier - in the March 2008 when the U.S. government helped Morgan Stanley with the acquisition of Bear Stearns. He manages to discuss the events leading from that time to the eventual collapse. Sorkin describes how Wall Street and Washington were intricately tied together in the collapse and details the level and depth of these ties. Before the story pans out, he enlists his cast of characters which include the likes from the management of Bank of America, Goldman Sachs, Morgan Stanley, Fannie Mae and Freddie Mac, as well as overseas organisations from countries like Korea and China. The characters also include a whole array of U.S. attorneys, financial and political figures from the U.K., as well as the American Congress, the Federal Reserve, the Department of the Treasury, and the White House to name a few.

A character that pops up quite a few times throughout the read is energetic Hank Paulson, Secretary of the Treasury, who ultimately becomes exhausted as he leaps from crisis to crisis, first trying to influence Dick Fuld to sell the doomed firm - Lehman, then plotting himself into a war with the mortgage giants Fannie Mae and Freddie Mac, and finally, reeling from plan-to-plan to hold everything together but eventually underestimating the whole situation and letting Lehman relinquish itself from the face of the earth. Such is the detailed outlining of Hank Paulson; Sorkin manages to go into pretty much every detail of the key characters in the book. Interestingly, Sorkin even manages to reveal what the people at the top of the international financial institutions think of each other. Hank Paulson describes John Varley, CEO of Barclays, ‘a waffler’ and ‘a weak man’.

The book depicts the greed, the hunger for power, the money, and the lack of financial regulation that led to the financial collapse. Too big to fail clearly manages to convey the egos and decision-making styles of the key figures during the period of the meltdown. Such is an example of the way one of the top bankers use to lead his lifestyle, “Lehmann CEO Dick Fuld's long-time No. 2, Joe Gregory, would helicopter to work each day”.

Sorkins’ writing style is of a novel, which makes the whole financial catastrophe a thriller with page-turning cliff hangers. As a result, readers feel as though they are in the midst of the action. Sorkin recreates intimate conversations and high-level discussions. He manages to get into so much detail and describe pretty much everything in most scenes, much like a Hollywood movie - From what coffee individuals were drinking due a particular meeting to describing a character with the attributes of a ‘Sex and the City’ character.

From a communications perspective, Sorkin does not manage to outlay what PR people did during the whole meltdown. It would have been interesting to know what role communication agencies played during the biggest crisis of the 21st century. On the other hand, as city PR sits in the shadows of what businesses do, it is plausible to think Sorkin did this deliberately.

Despite its’ 600 pages, Too Big To Fail moves along at such a fast pace that even as the reader you feel hard-pressed to stop and think what if this happened or what if that did not happen. While no one can be happy with the way the financial markets tumbled with taxpayers paying hundreds of billions to prop up failed banks and bonus-driven bankers, the narrative at times makes one feel sorry for some the bankers involved and/or those that lost jobs due to the crisis.

Moreover, as a reader with a fair understanding of the financial industry, I do feel that the editing rushed and poorly done, as what was written in 600 pages could have been written in half as much. Another editorial issue with book was the way it was written, a person with no financial knowledge could not understand the story without referring to a financial jargon-buster. I also feel that Sorkin writes with a liberal bias as there were no villains, but a few heroes; even though the story illustrates how interconnected the financial institutions, governments and top banking officials are, despite being rivals. Nonetheless the book is a truly remarkable non-fictional achievement, concerned as it is with politics and international finance. At the end, the reader will be left feeling astonished, amazed and fairly well informed.