Selling the Recession: Hollywood and the Financial Crisis
Hollywood has always provided an escape for people in hard times. But in recent years, an unlikely theme has emerged: a demand for films and television about the 2008 financial crisis. Last year’s comedy The Big Short earned $132.3 million at the box office and won Best Adapted Screenplay at this year’s Academy Awards. The thriller Money Monster, directed by Jodie Foster and starring George Clooney and Julia Roberts, premieres next month. In it, Clooney plays a finance TV show host who is held at gunpoint by a disgruntled investor. Showtime’s new hit show Billions, HBO’s Madoff, and Martin Scorsese’s The Wolf of Wall Street have also been part of the Wall Street trend in Hollywood.
The interest of American audiences in Wall Street comes eight years after the 2008 financial crisis. Although the crisis was analyzed at the time and made its way to the big screen in the 2010 documentary Inside Job and the 2011 movie Margin Call, movies about Wall Street have only recently become widely popular.
This lag between harmful events and the American public’s desire to see them portrayed in films is not a new phenomenon. Steven J. Ross, Professor of History at the University of Southern California,drew parallels between the period in Hollywood after the financial crisis to the years following the Vietnam War. During the Vietnam War, which was widely unpopular among the American public, only one film about the war was released at the time—The Green Beret. It was not until several years after the war ended that movies like The Deer Hunter and Apocalypse Now—films critical of the war—were released. By contrast, Ross explained, the release of the Rambo films during the Reagan era captured the mindset that “if we had only been really macho and as tough as Rambo, we could have won the war.”
Alternatively, Ross noted, Hollywood produced many pro-war movies during WWI and WWII. The difference was that those wars had strong national support, and the films were patriotic. “When you have events that harm millions of people, that are difficult to deal with and that create a great deal of controversy, Hollywood is often more reluctant to venture into that terrain,” said Ross. Now, the distance from the financial crisis makes people more receptive to seeing these movies.
Andrew Metrick, Deputy Dean and Michael H. Jordan Professor of Finance and Management at the Yale School of Management, teaches 13 hours’ worth of content in his class on the 2008 financial crisis. “So two hours seems a little short for understanding the financial crisis,” he said. Metrick warns, “movies like this can do a lot of good, but they can also leave people with an oversimplified version that is a dangerous oversimplification.”
Metrick likened claiming there was one cause of the 2008 financial crisis to claiming there was one cause to a world war. “So to say for example that World War I was caused by the assassination of Archduke Ferdinand would be an oversimplification that might lead you to think that all we have to do is prevent Archdukes from being assassinated and we’ll prevent world wars,” he said.
Films that pinpoint one reason for the collapse are deceptive. Metrick criticized the 2010 documentary Inside Job for blaming the financial crisis exclusively on greedy bankers. According to Metrick, that is neither correct nor helpful for shaping policy. “There’s not really any kind of way to fix that with policy,” he continued, “Make people go to church, make people be honest or something, would be the answer.” Metrick praised The Big Short for its clear explanations of economic issues, but said that it, too, failed to provide a complete picture of the crisis. The Big Short seemed to suggest that “crappy securitizations in real estate is what caused it and only a few great geniuses were able to observe that, whereas again the conclusion one would draw from that is just don’t do stupid things like that,” said Metrick.
But the financial crisis was clearly much more complicated than that. Metrick noted that most commentaries from Hollywood ignore the “macro environment” that accompanied the collapse. As Metrick noted, the macro environment for ten years before the financial crisis was one of “enormous global imbalances and changes around the world.” These imbalances fueled demand “for the kinds of safe assets that are provided by US government bonds by mortgage backed securities. That enormous demand was missed [in the lead-up to the 2008 financial crisis]—that was the great mistake,” said Metrick.
Ultimately, while the global economy is impacted from both the demand side and the supply side, Metrick explained that most films focus on the supply side. This involves “crazy investment bankers, the people who think that real estate is going up forever and thus they can package these things as triple A, and the desire of bankers and other people to earn fees and be greedy on those things.”
The demand side is rarely portrayed in film, perhaps because it is less entertaining. Metrick explained that the demand side includes international factors like oil producing countries and developing countries looking for short term highly rated debt, which places pressure on the global economy. According to Metrick, the demand side is not just an important part of understanding the financial crisis but also in understanding how best to respond with policy changes in the future.
No Hollywood movie is likely to include all of these economic details. Ross made clear that the interest of Hollywood will always be, first and foremost, making money. “If they can make movies that raise consciousness while also raising money, so be it, but it’s an industry, and their main concern is the bottom line.” Ross also said that movies will only be successful if they focus on telling an entertaining story rather than pushing political messages. Joshua Dienstag, Professor of Political Science at the University of California, Los Angeles, agreed. “What distorts Hollywood films is not the ignorance of actors or directors but the commercial imperatives of the film industry.”
Jonathan Kahana, Associate Professor of Film & Digital Media at the University of California, Santa Cruz and author of Intelligence Work: The Politics of American Documentary studies how films can both shape and reflect American public opinion. Kahana said that The Big Short was popular with audiences because it was entertaining and relatable. He explained, “it takes a social and human disaster and repackages it as a sentimental commercial fiction. Which you could say has something in common with getting people to buy homes they don’t need or can’t afford, or the making-something-out-of-nothing that caused the financial crisis.”
The Big Short makes an effort to explain dry economics to average moviegoers. Inserted in the middle of financial conversations in the movie are celebrity cameos intended to lighten the material. While drinking champagne in a bathtub, actress Margot Robbie explains “shorting” and sub-prime loans. The casting of someone like Ryan Gosling in The Big Short and George Clooney in Money Monster already draws a different audience than a regular financial crisis movie would. Kahana explained that movies like The Big Short “confirmed what we already knew, and made that feel like specialized knowledge that you’d have to have incredible resources to access and make sense of.”
Ross believes that movies can be important introductions to topics for the American public. “Movies matter the most about the things we know the least,” he said. Ross also explained that people already interested in politics will research these topics, while the average moviegoer will not. Moreover, if the information is presented in an entertaining way, people are more likely to learn more about it on their own.
While audience members might be influenced by depictions of the financial crisis, most films reflect the public sentiment already established. Dienstag said, “Hollywood doesn’t generally generate public opinion, it usually follows public opinion.” Thomas Doherty, Professor of American Studies at Brandeis University cites World War II as an example in which Hollywood took action to make anti-Nazi, pro-war films during a time of isolationism. In most cases, however, films “speak to popular aspirations and popular beliefs.” If many films do not create public opinion, they at least “tease it out and nuance it,” said Doherty.
The consistent thread between these films is the anger towards Wall Street. Doherty explained that these films “tend to synopsize very complicated economic issues into a simplistic form and they give people a villain to focus their hatred on.” In the financial crisis story, it is the evil banker.
Even The Big Short, a funny and entertaining comedy, ends with anger. After making hundreds of millions of dollars, Steve Carrell’s character sits in his penthouse and muses, “I have a feeling in a few years people are going to be doing what they always do when the economy tanks. They will be blaming immigrants and poor people.” Ross noted that the anger towards Wall Street in an election cycle supports the platform of a candidate like Bernie Sanders, so it seems strange that wealthy film stars have become advocates for their audiences against big banks. Nevertheless, thanks to successful movies about the financial crisis, people have greater awareness of what happened, and Sanders’ message resonates more deeply.
The increasing presence of Wall Street in Hollywood at the very least becomes a marker of this period in history. As Dienstag said, “everything that most people know about the sinking of the Titanic [comes] from watching the movie Titanic.” Years ahead, it will be these representations of the financial crisis that will likely be remembered. They might not be entirely accurate. But if Hollywood started making movies like economics textbooks, they wouldn’t sell.