I had been wanting to read The Big Short since it was published. I finished it a while back and Michael Lewis’ account of the very few investors who bet against the real estate bubble and won—big—did not disappoint. As you probably know, he follows the stories of a few men, highlighting their quirks and the elements of their personalities that enabled them to take a contrarian view in the midst of a mad market, and, through those stories, tells the story of the subprime mortgage crisis.
I think Michael Lewis means it when he expresses a kind of impotent frustration at the number of readers of his first big book, Liar’s Poker, who read it not as a warning, but as a guide to getting rich. I think he’s sincere, too, when on occasion he laments that all of these contrarian investors used their insight for personal gain; none of them became advocates for regulatory reform.
However, upon reading The Big Short, I wanted nothing more than to figure out how to get rich, too. I didn’t feel moved to write to Senator Menendez to demand stronger regulations on predatory lending; I wondered if I should buy that investment book that one of the guys used to start his own fund. On the one hand, this makes sense. This is America, after all, where, as James Baldwin said, there will never be a strong worker’s movement because there are no workers, only candidates for the hand of the boss’s daughter. That is, we all see ourselves—far too easily—as potential rich people. Furthermore, I’m writing this from Jersey City where Goldman Sachs dominates my skyline and my culture: they buy the trees that beautify the park by our house and their employees use their multi-million-dollar bonuses to scoop up and renovate the brownstones on my block. I, too, would like to own a house one day, and my husband and I, more than once, have thought that, fiscally conservative and middle class as we are, we might be able to benefit somehow from some poor sucker’s inability to make their mortgage payment. Such a sad chance, in fact, might be our best hope to buy a place in this artificially inflated environment.
But what is it about The Big Short that fuels my interest in making money while increasing my sense of impotent despair about the possibility of real financial reform?
I think it’s endemic to the topic and the structure of the book. Lewis tells a story about outlaw heroes, but these men—they are all men, though a few interesting women play bit parts as whistleblowers—are all disaffected insiders. When we do hear about a victim, the story is abbreviated and stereotyped: there is a Mexican strawberry picker with an $800K mortgage, a Vegas stripper who’s flipping multiple homes, and the Jamaican night nurse of one of the bankers who owns multiple houses in Queens. The class, race, and sex-snobbery is not subtle: Lewis makes clear that he feels for these people, but that they are not fit to play with the big boys.
Can’t you just hear the condescension at the Princeton Club?
“Whitley, have you read Mike’s new book? It’s really too much! Do you know that those brokers actually wrote an $800K mortgage for a Mexican strawberry picker?”
“But Sterling, the one that was really over the top was the stripper who was flipping houses on the side!”
“The flipping stripper!”
“I liked the Chinese guy—the one who went to Babson—who thought he was making a killing--”
“Hilarious! That was a great scene—with the Brooklyn guy double-dipping his edamame. Hey, where is Babson again, anyway?”
“Isn’t it in Wellesley?”
“I dated a girl from Wellesley sophomore year. She got to be VP at AIG. Wonder what happened to her….”
A better book, I think, would tell the story at every level: showcasing the stupidity, gullibility, corruption, unmerited optimism all up and down the chain: of the immigrant, the branch officer, that officer’s manager, all the way on up to Tim Geithner and Alan Greenspan. That book might get us storming the barricades.