Too big to fail ... or save.

• Author: Atkins, Paul
• Position: Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System-and Themselves - Too Big to Save? How to Fix the U.S. Financial System - Book review

A review of Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--And Themselves, by Andrew Ross Sorkin, Viking, 2009, and

Too Big to Save? How to Fix the U.S. Financial System, by Robert Pozen, Wiley, 2009.

[ILLUSTRATION OMITTED]

[ILLUSTRATION OMITTED]

During the past eighteen months, dozens of authors have produced books about the 2007-09 financial crisis. Two of these books illustrate well the broad choices a reader has: You can spend your time being entertained, picking up some color about the people playing important roles and how they influenced events, or you can learn something about the underlying causes and effects in an interesting, approachable way.

In Too Big To Fail, author Andrew Ross Sorkin, a New York Times reporter, supplies a rollicking, well-woven, at times profane "insider account" of daily events before and during the financial crisis. In Too Big To Save? author Robert Pozen, senior lecturer at Harvard and chairman of an investment firm, methodically examines and evaluates the U.S. government's response to the crisis, explains concepts, and suggests reforms to prevent another one.

It is clear that Sorkin interviewed nearly every significant figure in the financial crisis and had access to calendars and correspondence. At times clearly one-sided in his characterization of the players, he describes in detail (with full, multi-party quotations) events such as the chaotic situation on a mid-September Sunday when Lehman Brothers was sinking before its management's--and the government's--eyes. He tells how Henry Paulson, then U.S. Secretary of the Treasury, vomited after one excruciating meeting. He even recounts what John Mack, chairman of Morgan Stanley, told his wife just before they went to bed one night. Meanwhile, the reader must somehow hope to discern, from among all of the beguilingly precise details and quotations, truth from embellishment in the storytelling.

In focusing on details and actions of specific people, Sorkin implicitly subscribes to the "Great Man" theory of history--studying history by examining the particular personalities involved. It is undoubtedly true that individual foibles and prejudices help determine the outcome of events, whether they be military battles or bailing out banks. Would the course and outcome of the financial crisis have been different if, for example, instead of the intervention-oriented Henry Paulson, President Bush had still...