The Big Short & the cost of living Crisis.

Part 1

What did you think of Don’t Look Up? I thought Don’t Look Up was weird and rushed. It jumps quite randomly from scene to scene, characters act in a peculiar fashion (past the way they are meant to) and visually it looks like a YouTube advert you haven’t put onto full screen yet. This is done intentionally, but it felt intentionally not good, which doesn’t seem right.

Being head on is where I think Adam McKay excels though.  I think the Big Short is really good, but more of an essay than a film. I agree with Peter Bradshaw in that it is not as critical as it should be or possibly sets out to be, there is no real moral or personal stakes – apart from hairy brad pit and pin striped Gosling monologues towards the end of the film. I do think it serves a good explanation of the dangers of a free market and the failure of this free market.

As inflation rates in fuel, food, energy and rent rates hurtle skywards with a what feels like a personal issue with my bank account, the lack of government regulation, subsidies and general help feels (to a non economist) concerning. 9.4% inflation this month, with it expected to go higher in Autumn. My rent has gone up by £250 per month since I moved in – that isn’t reflected by inflation. In what is not a sure fire way to counter inflation, the bank of England will raise interest rates, making it harder to get a mortgages and only really affecting first time buyers. Energy bills will rise by £1600 per year since the start of 2021. The government says that increasing wages will only make inflation worse (regular pay has actually fallen by 2.8% from 12 months ago). So what is being done to help us?

What the BBC and the government will tell you is that this is due to the war in Ukraine, this is due to people spending after covid, all while people are stuck in rented apartments spending 25% more on milk than they did last year, and they can’t go on holiday now. Ultimately, it is the governments job to regulate the free market to protect people from this (and a £650 one off cost of living payment will barely cover half the amount energy has risen.) If you can’t do everyone, at least protect me from rising prices. This and the fact we are back in recession is what made me think about the Big Short again – the largest film that (even if tamely) criticised a free market rife with greed and corruption.

Adam McKay’s world in The Big Short is one of contradictions. Jared Vennett represents the very worst of the crash. Those in the banks that caught wind of the gravity of the situation and would continue selling mortgage packages (CDOs) to investors, while simultaneously taking out an insurance policy against the mortgage packages they just sold. JP Morgan made billions by betting against these mortgage packages (CDOs) they sold with the full knowledge that they would default, the insurance company they took these policies out with, AIG, collapsed completely ( meaning investments and pensions etc dispeared). Jared Vennett here represents the evil behind the crash. Yet, while this character shouldn’t be likable, he stands there backed by the reputation of the endlessly charming and handsome Ryan Gosling (I’m a fan), the coolest guy alive right now. Why? Use Ryan elsewhere.

This is just one instance of seeming mis-identity, or contradiction. The film is filled with montage, 4th wall breaks and flashbacks, but scattered around are quite peculiar moments of sombreness that just don’t feel right. This is because they have nothing really to do with the characters that McKay wants us to identify with – they (and we) are much too enthralled in their David and Goliath battles against the banks, too busy getting nice and rich. We are stopped, for example, as two of our characters celebrate a small victory, by a hairy Brad Pitt, who reminds us that, if their ‘bets against the American economy’ are right ‘people lose homes, people lose jobs, people loose retirement savings… every 1% unemployment goes up, 40,000 people die.’ But we barely see any of these people! Aside from, of course, the sexy stripper that told Steve Carrell she has four houses - and we certainly aren’t encouraged to identify with her, as we are the main characters. You can see how the political intentions of the film lose their way.

Reflecting, this film was not set out to be a criticism of the people that caused the crash, nor a true, accurate explanation of the crash (I will come on to this) but was made with entertainment value as a priority.

This isn’t a ground-breaking revelation – ‘what? The guy who made Anchorman released a film with Ryan Gosling, Batman and Brad Pitt to be entertaining?’ But then I thought, why include such detailed explanations of CDOs and Credit Default Swaps, rather than glaze over the details of confusing parts, as Leo does in The Wolf of Wall Street (‘The point is, is any of this legal? Absolutely fuckin’ not’ nice 1)? You could of course counter that by asking why have these explanations done by Margot Robbie in a bath. My 16-year-old self was certainly putting that in the ‘pros’ column of the ‘should I watch this film about the financial crisis’ list.

The point is that there does genuinely seem to be an effort for an accurate portrayal of the events. Yet there is no mentioned of the party that is perhaps MOST guilty for the events – The US government.

I started this essay by saying I was worried about the lack of regulation (or ‘protection’ for a better word) to help with the current living crisis. At the time of the crash, and immediately after and also now, the government was Wall St’s (or ‘The City’s) biggest fan. They were Siamese twins. The government was filled to the brim with financial agents and parasites to the point where the former CEO of Citibank was the Chair of the Treasury at the time of the crash. They didn’t just refuse to regulate the industry all in their power to actively encourage irresponsibility of he banks with no consequences, helping them gain massive reward for their actions. This was demonstrated with wide scale bail outs of the banks and not AIG, who was forced to pay billions to JP Morgan (for those insurance policies I had mentioned earlier).

Imagine if you had a child and it was acting up and being annoying. A normal parent would calm it down, pick it up maybe shut it in their room, whatever. If the US government of 2002- 2008 found itself in such a scenario, it would encourage said child ,wind it up more and tell it to use the steak knife on the counter to stab the dinner guests. The child would of course be rewarded for this with ice cream.

So why is the irresponsibility of the US government not included in this film?

I am so interested in this again because the mistakes of the 2008 crash are a timeless issue, not one of 12 years ago. As companies grow larger and more powerful than governments, regulation (protection) against pure free reign is key in preventing an already ridiculous gap between rich and poor. I’m usually reluctant to recommend documentaries because, while they cause a highly emotional response while watching the film, I always find their point fades from my focus quickly post watch. However Craig Ferguson’s film Inside Job is a deliberate and well backed criticism of government failure, alongside corporate greed. And it is one that has stuck with me. As BP announced this week 7.5 billion in profit in a time where people are choosing between eating and heating, the need for protection against predatory industry feels larger than ever.