This story originally appeared at Truthdig. Robert Scheer is the author of The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street (Nation Books).
It is not true, as a Wall Street Journal reviewer claimed, that the HBO movie version of Andrew Sorkin’s book Too Big to Fail was “Too Boring to Watch.” On the contrary, the problem with the film, featuring excellent acting and taut direction, as with the richly anecdotal book, is that it is all too effectively misleading.
Fortunately, if viewers have already watched “Inside Job,” the spot-on Academy Award winner, they will not be led too far astray by this film’s adulation of the likes of Henry Paulson and Timothy Geithner. Paulson is portrayed as an eminently decent man, troubled by the imperfections of the TARP bailout, and when he throws up off camera in one scene it is not at all suggested that perhaps he could be disgusted that the misery he brought to the world had left him a billionaire.
When he resigned his position as head of Goldman Sachs to become treasury secretary, he cashed in $485 million in Goldman stock and was saved from a $100 million tax liability because he was entering government “service.” The film barely mentioned that Paulson was the head of Goldman Sachs when his company deceptively packaged and sold the collateralized debt obligations (CDOs) based on the subprime and Alt A mortgages that proved so toxic.
As Paulson concedes in his memoir, after George W. Bush appointed him treasury secretary, the president asked plaintively as the economy was crumbling: “How did this happen?” In Sorkin’s book, it is stated that the treasurer “disregarded the question, knowing that the answer would be way too long.” But in his memoir, Paulson provides a clearer insight: “It was a humbling question for someone from the financial sector to be asked—after all, we were the ones responsible.”
No such honesty has yet emerged from Geithner, who was an undersecretary of the treasury during the Clinton years, when he worked closely with his bosses, first Robert Rubin and then Lawrence Summers, to pass the radical deregulation hinted at but never fully explained in either the Sorkin book or the film. There is scant reference to the obliteration of the Glass-Steagall Act, a repeal that permitted the too-big-to-fail merger of companies such as Travelers and Citicorp, which became Citigroup—a company that had to be bailed out with $50 billion in taxpayer money.
Nor is there any reference in the film to the fact that Rubin, mentor to both Summers and Geithner, went on to help run that new megabank at a salary of $15 million a year. Geithner, who later became head of the New York Fed, a job obtained with the effusive recommendations of both Rubin and Summers, worked to salvage Citigroup from the mess its packaging of toxic mortgages had created.
Geithner is lionized in both Sorkin’s book and the film version. As Nancy deWolf Smith put it in the Wall Street Journal: “Some viewers who remember the book may be galled again by the portrayal of certain characters. For instance, Timothy Geithner (Billy Crudup), then president of the Federal Reserve Bank of New York, still comes across as a blameless saint and Wunderkind with a compassionate finger on the pulse of the victimized ordinary man.” The fawning in the book is embarrassing, as in the description of Summers and his treasury assistant in the Clinton years going off to tennis camp, with Sorkin noting, “Geithner, with his six-pack abs, had a game that matched his policy-making prowess.” Not to be overlooked is “his usual firm, athletic handshake.”