If there is one thing that historians, politicians, economists and other cultural commentators can agree on, it is that everybody loves a milestone. Five years after the financial quasi-apocalypse that reverberated around the world, documentary filmmaker Joe Berlinger (director of the epic Paradise Lost documentary trilogy) sits down with the man at the epicentre of the crisis to look back and explore what happened and why.
Hank Paulson was the Treasury Secretary at the time and was part of the most exciting/terrifying moment in modern globalisation. The only problem is: can he explain the mind-bogglingly complicated financial products in a way that audiences can understand? (Especially as the investment bankers themselves weren’t sure about them.)
The film has been created with two long interviews with Hank and his wife Wendy, surrounded with news media footage of the crisis as it unfolded. Having made a lot of notes during this film, allow me to attempt to explain the narrative of the before remarking on the construction of the film:
In the summer of 2006, Hank was nominated to be the Secretary of the Treasury under George W. Bush and was therefore responsible for residing over the largest financial meltdown in history. From the 1950s onwards, governments (and television) were slowly convincing Americans that owning a home was the most important signifier of success, so when people wanted to own their home they would get a loan from a bank, who would then sell that loan on to Fannie May & Freddie Mac – two enormous Government Sponsored Entities (GSEs) – who repackaged the debt and sold it on to investment banks. As house prices began to sharply drop in early 2008, the investment banks began to announce shortfalls in their projected profits leading to a three week period in August / September 2008 where the whole financial system looked like it was going to collapse.
Firstly the investment bank Bear Sterns was in trouble, yet after a plea to the Treasury for assistance was denied, the company was bought by JP Morgan for $2 a share (after trading at $170 the year before). This was seen as the proper response from Hank as it was the private sector resolving it’s own crisis. Yet it was the resultant implosion of Lehman Brothers, Fannie May & Freddie Mac and insurance giant AIG that led to enormous government intervention leading to the now infamous TARP (Troubled Asset Relief Program) bailout of $700Billion.
This is obviously a ludicrously reduced version of the story and although I felt like I was understanding how all the pieces fit together during the film, now it feels far more complicated than I can even imagine. This film perfectly deserves the phrase Information Overload (coined by the philosopher Alvin Toffler), which “occurs when the amount of input to a system exceeds its processing capacity”. Yet if the financial crisis was caused by the influx of insanely complicated products being devised in the financial marketplace, then a film like this can only possibly explain the events through the eyes of a human observer and what it felt like to be present during the meltdown. For this, the film is brilliant.
Berlinger has given Hank enough screen time to explain the intimate details of meetings held by CEOs and governments, yet juxtaposed his testimony with plenty of news footage that explains the wider picture of the function of investment banks and financial products. The film is also scored with a brilliant electronic/post-rock soundtrack by Ian Honeyman (that I hope becomes available as a download so that I can occasionally recreate the tension of a financial meltdown as I drive to work).
Anyone who has a Netflix account and enjoys documentaries will have noticed the huge number of economic documentaries available, yet Hank: 5 Years From The Brink (which has been exclusively release on the website) manages to get a sense of legitimacy by focusing on the star player at the centre of the chaos.
For a superb book about the crash then read Too Big To Fail by Andrew Sorkin which has also been made into a gripping HBO TV movie