Must-see panel discussion on The Big Short movie about the 2008 financial crash with Oscar nominated Director Adam McKay: With David Wessel (author of best seller “In Fed We Trust”) moderating, the Brookings Institution hosted a lively and informative discussion about The Big Short. The “Best Picture” Oscar nominated movie is a compelling story about how four outsiders figured out that a massive financial bubble was about to burst, bet on it and made billions of dollars. You can read our take on “Why the Big Short Matters” here, but you should also watch this discussion because it provides excellent context and a window into the thinking behind the movie.
The Brookings event featured Oscar nominee Adam McKay, the film’s director; Adam Davidson, co-founder and contributor of NPR’s Planet Money and a consultant on the film; Danny Moses, former head trader for Steven Eisman who was portrayed in the movie by actor Steve Carell; former Vice Chairman of the Fed Don Kohn; and Wall Street Journal reporter Greg Ip. Mr. McKay talked about how author Michael Lewis’ book by the same name captivated him and led him to adapt it for the big screen: “I picked it up one night…and I could not put it down…I was hooked at that moment. I was just like, ‘This has to be a movie’.” He also said that his goal was to make finance and the 2008 crash understandable and for the movie to not only make people angry, but to also start a conversation about what happened, why and if enough has been done to prevent it from happening again.
The movie does indeed strip away the complexity and tells the story about how Wall Street crashed the global economy in an understandable and entertaining way. It cuts through the Wall Street fog machine and highlights how the crash has impacted every American in lost jobs, homes, savings and so much more.
One quibble with the discussion: there was a little too much defense by the media when criticized for failing to fulfill their critical role of reporting on and informing the public of what was happening in the lead up to the financial crash in 2008. To understand how bad that failure was, everyone should read Dean Starkman’s book The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism, which you can buy here. You can watch the Brookings event online here. You can watch the movie trailer here, follow the film on twitter at @thebigshort, and follow the director Adam McKay at @GhostPanther. You can also read the Op Ed from Better Markets President and CEO Dennis Kelleher, titled Why The Big Short Matters, here.
Despite the omnibus spending bill victory, attacks against the DOL rule to protect retirement savers continue: The American people won an important victory late last year when the omnibus spending bill passed Congress without the harmful special interest riders that some on Wall Street fought long and hard for, including language that would have prevented the Department of Labor’s (DOL) best interest fiduciary rule from moving forward. Although this marked an important milestone in the fight to implement this important new safeguard to protect retirement savers, it was just the latest victory in a larger and ongoing fight.
That’s because Wall Street’s biggest banks, their trade groups, and many others in the finance industry are relentlessly attacking the DOL’s proposed rule that would merely require them to put the best interests of their clients saving for retirement first. Their allies in Congress continue to propose legislation that would derail this rule from ever seeing the light of day. The latest example is legislation introduced by Representatives Phil Roe, Peter Roskam, Richard Neal, and John Larson (H.R. 4293 and H.R. 4294), which are described as an “alternative” to the DOL rule. In reality, they are a big step backward and actually hand opponents of a fiduciary standard a new weapon to kill this rule.
The first test for any proposal put forward as a so-called “alternative” to the DOL rule is whether it solves the problem the DOL has identified and seeks to solve. That is, does it close the loopholes in the current outdated regulatory definition of investment advice that have enabled some financial professionals to put their own financial interests ahead of their customers’ interests when providing retirement investment advice? The answer here is an emphatic “No!” Rather than closing the harmful loopholes, these bills would codify them and continue the problem the DOL rulemaking is intended to solve. Far from being a pro-retirement security alternative to DOL’s rule, their proposal is actually weaker than the current standards that fail to protect retirement savers.
As Better Markets has made clear throughout this rulemaking process, not everyone who gives retirement investment advice is taking advantage of their clients, since many advisers do act in their client’s best interest. But, because the law does not require them to do so, far too many do not. That’s why this rule is so important. It closes a 40 year-old legal loophole and finally requires all brokers and advisers to act in their clients’ best interests. The DOL’s rule would ensure more than $43 billion stays in Americans’ retirement accounts every year instead of ending up in Wall Street’s pockets.
Better Markets will continue standing up for America’s savers, supporting the DOL’s common sense rule, and responding aggressively to attempts to derail it. It’s important that all Americans concerned about retirement security join in this fight. Stay informed: go to SaveOurRetirement.org to learn more about this issue. And stay engaged: follow us on Twitter and Facebook for the latest news.
Don’t miss the opportunity to see CFTC Commissioner Sharon Bowen at an upcoming event at George Washington Law School on “The Role of the CFTC in the Market”: If you’re in Washington, DC next Thursday, February 4th, GW Law’s Center for Law, Economics and Finance (C-LEAF) is putting on what looks to be a terrific event featuring CFTC Commissioner Sharon Bowen. Click here to learn more and RSVP to attend. You can learn more about Commissioner Bowen on her website here, and read what she’s had to say about important current topics like this recent rulemaking.
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