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Wall Street in Widescreen: The Financial Crisis of '08 in Cinema

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In the fall of 2008, as investment banks exploded and their debris cascaded upon the middle and lower classes, many Wall Street CEOs continued receiving bonuses worth millions. The Financial Crisis of 2008 fit Hollywood’s formula for profit—power, corruption, and lies equal ticket sales—so the recent spate of crisis-related films is not surprising. It is important to analyze the most noteworthy of the new films because they will, undoubtedly, become historical references in their own right in years to come as they help to define the Financial Crisis of 2008 for millions of moviegoers.

Perhaps the most well-known film about the modern US financial sector is Oliver Stone’s Wall Street (1987). In this film, the up-and-coming, starry-eyed Bud Fox (Charlie Sheen) takes a whirlwind journey through the world of Wall Street under the tutelage of Gordon Gekko (Michael Douglas)—one of the legendary “players” Fox so desperately emulates. Unfortunately, Gekko’s teaching methods are less than admirable, or legal, and early in their relationship Fox is performing insider trading deals in the hope of impressing Gekko. Douglas’ infamous depiction of a stock market tycoon did more than just win the actor an Oscar. It also colored public perception of the kinds of people who appeared to run the nation’s economy. Gekko’s total disregard for the working class is made undeniably obvious by his final betrayal of Fox when he promises to expand the company, Bluestar Airlines (for which Fox’s father works), but instead decides to gut it for a profit. Gekko’s lack of compassion foreshadowed the climate on Wall Street in the years leading up to the Crisis of ’08.

While Gekko is in no way a heroic figure in Wall Street, it would be an oversimplification to call him evil. The real genius of Stone’s writing and Douglas’ performance is that they make Gekko a more complex character than his stock-playing competitors. Near the end of the film, Gekko directs Fox’s attention to a painting on his office wall and states, “The illusion has become real.” The painting, bought at a bargain price, is now worth 10 times as much. In other words, things attain value when they are believed to have value. Gekko understands that it is not money that generates power but faith in that money. Unlike his colleagues, Gekko sees through the economic system, exploiting the Wall Street illusion and commenting on it at the same time.

Yet Wall Street, for all its financial rhetoric and character development, is still a film and as such is confined to an extremely short span of time. As a result, the film’s conclusion suffers in its effort to tie up the loose ends. Gekko’s startlingly poignant speeches on greed and money are forgotten so that he may fill the role of the “bad guy” who is served justice in the finale. Stone, too, must have realized this shortcoming and decided that Gekko could still teach the American people a thing or two about the wonders of Wall Street.

Wall Street: Money Never Sleeps (2010), the sequel to Stone’s classic, is set in the weeks just prior to the financial meltdown of 2008. It has been seven years since Gekko was incarcerated for insider trading and securities fraud. As in the original, this film focuses mainly on the rise and fall of another Wall Street aspirant, Jacob Moore (Shia LeBouf), who happens to be engaged to Gekko’s daughter. Unlike the first Wall Street, though, Money Never Sleeps requires Gekko to share the spotlight when it comes to filling the role of the informed Wall Street player. This time around there is also Jacob’s boss, Louis Zabel (Frank Langella), and his nemesis Bretton James (Josh Brolin). In the days before the start of the meltdown, Zabel and James represent two kinds of Wall Street high-rollers—one regrets what he has done and the other hopes to benefit from the inevitable crash. However, just as Gekko was a figure of ambiguous morals, these two men are not merely “good” and “evil,” aiding Stone’s effort to show the differing views regarding the financial collapse. Another difference between the films is in Stone’s use of cinematography. Wall Street was filmed using basic techniques that allowed the audience’s focus to remain on the actors. In Money Never Sleeps there are instances where Stone splits the action into two or more screens in a visual representation of how complex and overreaching the actions and outcomes of the stock market have become. Stone incorporates computer-generated scenes exclusively in the sequel, as a means of depicting how information and “money” are traded not by hand or phone but through computers and the Internet.

Despite these deviations from the first Wall Street, Money Never Sleeps relies solely on the interactions of its characters to explain the financial aspect of its story. In fact, Wall Street is momentarily forgotten in scenes when Moore, Gekko and Winnie (Gekko’s estranged daughter) linger on topics steeped in sentimentality. Still, the script remains faithful to the movie’s title and money is never disregarded for long. An easily overlooked example is in Moore’s first conversation with his mother, a real estate broker who has bought her way into debt. Moore expresses disappointment because his mother’s former profession as a nurse focused on helping people rather than pursuing them for their money. Further, Moore’s mother reflects the change in American society from the time when the first Wall Street was made to today; today people rationalize behavior that was once considered “greedy” by most Americans.

Museum of American Finance

Of interest is that for much of Money Never Sleeps Douglas’ character is not in attendance physically, but his presence lurks in the shadows inside Wall Street’s boardrooms. Stone seems to have saved much of Gekko for the film’s final act where he comes roaring back to life delivering perhaps the most valuable nugget of wisdom in both movies: “It’s not about the money. It’s about the game.” As in the original Wall Street, Stone uses Gekko as the vehicle to carry the main point of his film from the screen to the audience in Money Never Sleeps. Obviously the Crisis of ’08 is more complicated than Gekko’s statement, but the magic of cinema is in its ability to simplify an idea or event into a one-liner or a single image. Neither Stone nor Gekko is so naïve to believe that the meltdown was singularly caused by men in skyscrapers who viewed the society below as their playground, but at the same time no one would want to listen, even to Gordon Gekko, if he launched into a 10-minute soliloquy on free-market capitalism when finally confronted about his motivations.

While simplification can sometimes add to a film, there are times when a director should allot more screen time to explanation. The biggest problem with Money Never Sleeps is the same as in Wall Street—its conclusion. After several instances of deception and betrayal by all three of the main characters, Stone ends his film on an uplifting note. If most viewers were not living with the long-term repercussions represented in the film, one would think that the consequences of the ’08 crisis had already been overcome.

Both Wall Street and Wall Street: Money Never Sleeps are ambitious films that grapple with issues that most Americans find more confusing than interesting. Yet for all their flaws, they present the world of speculative finance in a dramatic and well-informed manner. The triumph of Bud Fox and Jacob Moore, and their ability to escape corruption, are elements limited to the silver screen; it is the cinematic license given to Stone and all film directors who wish to tell true stories using fictional characters. The financial crisis itself is simply too large to fit into a two-hour timeframe. It must therefore be scaled down and dealt with on a personal level.

Drama is not the only genre of film. There is another type of film that specializes in simplifying and explaining actual incidents: the documentary. Perhaps the clearest difference between drama and documentary is their use of emotion to convey a message. Typically, drama has the advantage of allowing the audience to experience its characters’ lives. Documentary, on the other hand, usually has to rely on the testimony of people after the event has already happened. This difference can be a benefit for documentaries when dealing with overarching disasters like the Crisis of ’08. In 2010, journalist Edwin Lane of the BBC argued, “For American film-makers, the scars of the recession may still be too raw to touch.”

The 2009 Frontline documentary Inside the Meltdown points to the fall of the investment bank Bear Stearns in the spring of 2008 as one of the first major indicators of trouble on the financial horizon. Frontline states that, fearing the effects of systemic risk, Secretary of the Treasury Henry Paulson and Chairman of the Federal Reserve Ben Bernanke ordered an emergency loan to Bear Stearns in order to save it. The loan only delayed the inevitable; shortly after Bear Stearns was sold to JP Morgan for pocket change.

Frontline spends considerable time on the Bear Stearns crisis because of how it appears to have affected decisions made in the months to follow. Some have speculated that because Paulson and Bernanke chose to save Bear Stearns, Lehman Brothers—the next investment bank to implode— decided not to seek a buyer for its declining stock, believing that the federal government would come to its rescue. Frontline places the final decision to let Lehman fail on Paulson, with the possible motivation being a personal grudge against its CEO, Richard Fuld, Jr. Regardless, Frontline concludes that the loss of Lehman Brothers resulted in unchecked systemic risk, ultimately leading to the freezing of credit markets and an outbreak of fear and panic on Wall Street.

While Inside the Meltdown may not have the emotional depth of Oliver Stone’s Money Never Sleeps, it tells its story with gravitas through the lens of personal narrative, in this case Henry Paulson. Another way for a documentary to make up for its lack of voyeuristic emotion is in the images it displays while voices talk off-screen. Inside the Meltdown portrays Paulson in stark black-and-white stills. This technique allows the audience to participate in a kind of character study of Paulson. He is never directly blamed for the financial meltdown, but the documentary depicts him as having played a key role in the disaster. Just as in Stone’s dramas, Frontline chooses to explain the collapse not by using only numbers or financial jargon, but by highlighting the human decisions that led to the crisis.

Another documentary, Inside Job (2010), directed by Charles Ferguson, describes how the US financial sector ran itself, and the entire economy, into the ground. Inside Job, in contrast to Inside the Meltdown, blames deregulation, especially of the derivatives market, for the crisis because derivatives were the means by which investment banks took risks large enough to destabilize the entire international financial system. Ferguson also devotes parts of his film to areas affected by Wall Street that are not as well known. For example, Inside Job holds interviews with top economists who have connections to investment banks’ boards or research departments, revealing that even scholars were co-opted by Wall Street.

Ferguson’s Inside Job is engaging not only for its informative depiction and explanation of the meltdown, but also for its masterful use of documentary as a film style. Throughout the film, the audience is repeatedly informed that various people refused to be interviewed. Essentially, Ferguson allows the absentees to damn themselves by not making themselves available to defend their position after the film has called them out on their mistakes. Whether law or counsel mandated their silence, “declining to comment” gives the appearance of guilt. But granting Ferguson an interview clearly did not mean that one’s innocence would be assured. Ferguson’s off-screen reactions to those on-screen give the audience the impression they are feigning ignorance, giving their confused responses a sinister undertone. However, the outrage behind Inside Job is not spelled out until the audience is directly addressed in the last few minutes. Ferguson’s film ends with a plea to the average American: because the government refuses to act, it is up to the people to improve the flawed financial system.

While cinema may not be the first thing associated with American finance or Wall Street, it carries with it a trait that, according to The Deal’s Editor-in-Chief Robert Teitelman, is uncannily similar. Films are “made to make money, which is something they share with Wall Street.” Stone and Ferguson likely benefitted from making their films when they did, not only because the films’ material was still a topic of interest among the public, but also because they offered viewers the rare chance to examine the films’ accuracy since the story they dealt with was still being played out.

In fact, two films about the ’08 crisis were released at this year’s Sundance Film Festival: Margin Call (2011), a drama starring Kevin Spacey, and The Flaw (2011), a documentary featuring Nobel Prize-winner Joseph Stiglitz. Clearly, Hollywood has only begun to scratch the surface of the story of the financial collapse. And while Margin Call and The Flaw have yet to be released, HBO is currently featuring a 90-minute film adaptation of the nearly 600-page bestseller, Too Big to Fail, by Andrew Ross Sorkin. The film has already sparked numerous wide-ranging reactions on HBO’s website, from those who discount the portrayal of blame to many more recommending the film to friends and colleagues. Too Big to Fail falls between drama and documentary, relying on frequent news clips and sound bites from CNBC to remind the viewer of the reality of the events being portrayed on screen.

Film is an important medium through which the public learns about past and current financial events, and there is no indication that this trend will stop, especially with the Financial Crisis of ’08 still looming large. The appeal of cinema has always been in its ability to transfer information to the masses. And while movies may not always be the most accurate in their portrayal of events, moviegoers do not attend films like Money Never Sleeps for their attention to detail but for their general, big picture messages. Films made now about the Crisis of ’08 and its repercussions will shape the public’s understanding of what went wrong and will be invaluable in trying to prevent the same mistakes from happening again.

–Hal Thompson

This article originally appeared in the Fall 2011 issue of Financial History a publication of the Museum of American Finance.

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