Too Much to Handle

The idea of a firm being “too big to fail” is one that resonates clearly throughout the film and certainly applies to the present as well.  The film delves into a perspective of the financial world where decisions had to be made in a timely matter, and as the institutions involved watched the financial system come apart at the hinges, there was a distinct compounding effect as a resolution was reached.  With the government intervention and following behavior from the banks, it is evident how much influence these institutions hold in our economy.  Relying on trust was shown to be a tricky and unpredictable aspect, while still necessary to provide a foundation for which the financial system is based.

While trust was not always present, a solution for the banks still came after stubborn refusals to cooperate.  Knowingly watching Lehman fail as they did, with no lasting repercussion, followed by the capital infusions undermined the intended message of keeping private sector problems private.  When government intervention is necessary on such a scale to stop a downward spiral, its hard not to justify the notion of “Too big to fail.”

The situation today hasn’t changed considerably, and the power held by such a small group of banks represents a plethora of factors involving most members of society.  The last thing we want to experience is a market condition like the one in the film again, and the need to support private firms with public money may be an unavoidable reality of the world today, and the film ominously describes the impending problems that would result otherwise.  The notion of “Too big to fail” is true whether or not we like it, as the film showed, since other solutions couldn’t provide resolution.  We may have simply stuck with a mindset of “if it’s not broken, don’t try to fix it” but a similar situation today would certainly require measures similar to the film, and reinforce the notion of “too big to fail” in the present day.


2 comments on “Too Much to Handle

  1. Do you think though that the mindset of “if it’s not broken, don’t try to fix it” is what actually caused the fall of Lehman Brothers? As we saw in the film, Hank admitted to not having paid attention to Lehman Brothers because they were making money, so should we have had a program or rules to handle this situation? Would the situation have panned out differently if our government already had a plan in place?

  2. Ah! I hope not. We may have missed the political window of opportunity to fix the structural conditions that allowed this to happen.

    But I, for one, do not want to be resigned to that.

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