The behavior of Wall Street executives and Washington officials angered many Americans at the onset of the financial crisis. Andy Sorkin, New York Times columnist and author of “Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System-And Themselves,” sought to elucidate the motives and players of the cat-and-mouse game that ensued.
Sorkin addressed nearly 140 people, including 15 College of William and Mary students Thursday at the Williamsburg Inn on the causes and aftermath of the financial meltdown. Sorkin is the first of a number of authors who will be invited to Williamsburg as part of the Inaugural Authors Series, hosted by the Colonial Williamsburg Foundation, to discuss the issues surrounding their work.
“This is a conversation about the economy, how we got here, where we are going,” Sorkin said. “The important moment for our economic history, and where my story begins, is 2:30 a.m. on September 15, 2008.”
Forty-five minutes earlier that day, Lehman Brothers, a prominent global financial services firm, had declared bankruptcy; five hours before, Merrill Lynch, another large financial firm, had been sold for $44 million, and the financial system quickly braced for a storm.
“I said it was like a movie … my wife said it was like a book,” Sorkin said. “It turns out, we were both right.”
After nearly 500 interviews, clandestine memos, a firsthand look into the back rooms of power, and what Sorkin describes as a competition between Washington and Wall Street executives about who could provide the most information, Sorkin emerged unwilling to lay full blame on the top levels of Wall Street.
“I’m a reporter, I want to find the crime; I wanted to find the conspiracy,” Sorkin said. “But the more I looked … the more I found that the accountants were praising the practices, the lawyers were praising it, so executives really thought they were doing the best thing to save their company … Who is wearing the white hat and who is wearing the black hat is hard to decipher.”
While Sorkin contended that measures like the Consumer Protection Bureau and
legislation that places a financial net beneath failing companies have succeeded in “reforming the edges of Wall Street”, the major concerns lie within the structure of the system.
“When I looked on the other side of the cliff, it was so much worse than I thought,” Sorkin said. “This brings up the issue of transparency, and when you really start working, you see how interconnected we all are.”
Sorkin’s suggestions called for personal accountability from American citizens and a reduction of the size of companies.
“We will always have a financial crisis,” Sorkin said. “We are not going to eliminate that, but we can modulate the up and downs … If it was up to me, I would break up the banks. They are much too big for the small amount of executives to handle … We have to ask ourselves what we could have done, and what we can still do. If you really look at ourselves, we are not long-term thinkers, but short-term.”
Henry Albers ’12 enjoyed the discussion for its insight into Sorkin’s personal opinion.
“His book is very character-driven,” Albers said. “Sorkin believes that the problem is with the system, not the people. I really liked seeing what he himself thought about the economy.”
Sorkin is also the New York Times chief mergers and acquisitions reporter, the assistant editor of business and finance news, and the editor and creator of DealBook, a financial news site. He won the Gerald Loeb Award for Business Journalism in 2005 for breaking news and in 2010 for best business book of the year.