Joe Nocera, a New York Times business writer, complained recently that Oliver Stone’s new movie, Wall Street: Money Never Sleeps, fails to instruct audiences about the villainous greed that produced a crash. Stone should have given audiences better insight into causes of the financial disaster, argues Nocera. That instruction was workable, Nocera asserts, because events that took place on Wall Street in 2007 and 2008 “were inherently dramatic.”
Evidently Nocera never tried to make a feature film for mass audiences. Imagine crafting a Hollywood production that aims both to entertain mass audiences around the world and deliver poignant judgments about economic developments in 2007 and 2008. Most filmmakers wouldn’t even try.
It is not surprising that Oliver Stone made the effort. More than any other current Hollywood director, he has dramatized American political, social, and economic history of the past fifty years. Stone is also a likely choice for portraying the meltdown because he directed the original Wall Street (1987). That movie featured Michael Douglas as a slick and corrupt financier who claimed greed is “good.”
Stone’s earlier film hinted that most operators on the Street were okay; the trouble seemed to be concentrated in the hands of a few corporate raiders like Michael Douglas’ character, Gordon Gekko. Stone found inspiration for Gekko in business headlines of the eighties about figures such as Carl Icahn, the buyout king, and two traders who came under charges for securities violations, Ivan Boesky and Michael Milken.
Oliver Stone dedicated the 1987 film to his father, who had been a broker in New York. Lou Mannheim (Hal Holbrook), an office manager in the film, is a stand-in for Stone’s father. Mannheim is a decent businessman of the old school. He cautions an aspiring young trader (Charlie Sheen) against shady deals. Invest in solid companies, Mannheim recommends. Avoid reckless speculation and stay within boundaries of the law.
When Stone released Wall Street in December 1987, Americans were not as frustrated about economic troubles as they are today. Even though Wall Street suddenly dropped in October of that year, markets had already recovered substantially by the time Stone’s movie reached the theaters. Americans were not broadly critical of the Street at the time. In fact, lots of Americans were enthusiastically investing in stocks.
Today, we’re angrier. We do not associate Wall Street’s problems with just a few villainous Gordon Gekkos. The entire system appears corrupted by nefarious practices. Stone endorses this broader vision. Wall Street: Money Never Sleeps shows Gekko returning to New York City before the crash to warn that dominoes will soon fall. The problems, Gekko warns, are “systemic.” Wall Street’s managers are gambling with other people’s money. Their reckless investments have created a speculative bubble that eventually will burst.
Delivering this message in a Hollywood movie is a daunting task. How can a feature film inform audiences about collateralized debt obligations?
The director’s strategy for engaging audiences involves packaging a lot of economic details inside an intriguing tale about love, betrayal, ambition, and conflict. Michael Douglas’ return in the Gekko role assists that effort admirably, as does Shia’s appearance as a young and idealistic trader on the Street. Beautiful cinematography of the Big Apple and colorfully integrated graphics help to retain interest, too.
Even though Stone tosses in lots of details about credit default swaps, “moral hazard,” and other esoteric subjects, audiences are likely to understand his central message. Reckless speculation involved everyone from the little investors who gambled excessively to the big Wall Street bankers that leveraged their capital dangerously in pursuit of huge profits.
A few scenes featuring Susan Sarandon as LaBeouf’s mother demonstrate how enthusiasm for speculation reached Main Street as well as Wall Street. Sarandon’s character gets caught up in the real estate bubble. Her debts multiply as she seeks to buy and flip houses. When housing prices drop precipitously, she is left dangerously exposed. Her experiences serve to remind viewers that mistakes were not confined to Wall Street. All over the country, Americans sought quick wealth by joining the investment frenzy.
Many of the situations portrayed in the movie relate to actual events. Characters in the story talk about little-understood investments by a corporate unit in London that left a large company vulnerable to collapse (a small London operation of AIG’s insurance business nearly destroyed the huge global corporation). Movie characters mention the example of a large Wall Street bank that promotes the sale of collateralized mortgage securities while also quietly betting that those securities will fail (Goldman Sachs settled with the S.E.C. for $550 million in connection with allegations about a fund manager who operated that way). In the film a major Wall Street investment bank collapses and the boss at a competitor institution succeeds in grabbing assets for just pennies on the dollar (similarly, with government assistance, JPMorgan Chase’s CEO Jamie Dimon took control of Bear Stearns at fire sale prices).
Stone’s portrayal of events turns simplistic towards the end, when he attributes the country’s financial woes to a sort of conspiracy (Stone often dramatizes villainy with hints of conspiratorial actions by people in high places, most notably in JFK). It is true, as Stone shows, that some operators on Wall Street recognized a crash was coming. They bet “short” on securities and profited enormously. It is also true, as the movie hints, that wealthy financiers held prominent positions in the national government (for instance, Henry Paulson, Jr., who ran the Treasury Department during the crisis and arranged for the bailout of large banks, had been CEO at a powerful Wall Street firm, Goldman Sachs).
It is ridiculous, though, to attribute the Great Recession to the actions of a few morality-challenged executives on the Street or to their allies in government. Fortunately, Stone provides viewers with plenty of other evidence about the crash that does not fit neatly into a crime story about scheming power brokers. His movie demonstrates that hubris – an arrogant and unrealistic feeling of economic brilliance – led many Americans to forget that booms often turn to bust.
I asked several patrons in the lobby after the movie why they came to see it. One elderly gentleman put it succinctly: “To find out what happened to my money.”
Joe Nocera is correct when he argues that Wall Street: Money Never Sleeps does not deliver a cogent history lesson about causes of the crash. No Hollywood movie can do that. But, at least, Oliver Stone helps audiences to think about why they lost their money.
Robert Brent Toplin, a professor of history at the University of North Carolina, Wilmington, has published a dozen books and is a writer for the History News Service.
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