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The Fall

by Ross Douthat

A review of Margin Call

Prosperity has a thousand fathers; economic ruin is an orphan. Few liberals want to acknowledge that our Great Recession was made, in part, in Washington, D.C., by the well-meaning politicians and bureaucrats whose subsidies and regulations helped inflate the housing bubble. Many conservatives are loath to admit that it was Wall Street, not Washington, that turned an American bubble into a global Götterdämmerung — that capitalist greed as well as government interference brought the world economy to its knees. The Left blames Wall Street and deregulation, the Right blames Fannie Mae and the Community Reinvestment Act, and neither points a finger in its own direction.

The best moment in Margin Call, a very good movie about 24 desperate hours in the life of a Lehman Brothers–like investment house, comes when the script escapes this trap, breaking from its focus on the sins of Wall Street to offer a wider lens on our predicament. This is a claustrophobic film, most of it set within the walls of a single Manhattan tower on the autumn night when a young analyst (Zachary Quinto) realizes that his company has bet far, far too much on residential mortgage-backed securities and stands to go belly-up in short order. But late in the story, a profane mid-level banker played by Paul Bettany gives the story the context it deserves, lecturing a subordinate who questions the point of their business:

If you really want to do this with your life you have to believe you’re necessary — and you are. If people want to live like this in their cars and big [expletive] houses they can’t even pay for, then you’re necessary. The only reason that they all get to continue living like kings is because we’ve got our fingers on the scales in their favor. I take my hand off and then the whole world gets really [expletive] fair really [expletive] quickly and nobody actually wants that. They say they do, but they don’t. They want what we have to give them, but they also want to play innocent and pretend they have no idea where it came from.

This is self-serving, of course. (The speech comes from a man who earlier admitted to blowing tens of thousands of dollars on strippers.) But it’s also entirely true. And by acknowledging that the sins that it depicts were part of a larger web of greed and self-deception, in which homeowners and politicians were as complicit as any trader or analyst or CEO, Margin Call hoists itself above the usual run of Hollywood polemics, and becomes a worthy portrait of our present crisis.

The crisis has already arrived when the movie starts, in the form of market turbulence and mass layoffs that claim the job of Eric Dale (Stanley Tucci), the bank’s hangdog head of risk management. On the way out the door, he slips a Zip drive to Quinto’s analyst: It contains a breakdown of the company’s exposure to the soon-to-be-worthless securities that Wall Street firms have been trading with abandon for some time. The analyst works late, finishes his ex-boss’s simulation, and then freaks out when he realizes what it means. So does Bettany’s middle manager, when he’s summoned back to the office at midnight to reckon with the data, and the message of panic quickly climbs the corporate ladder — first to the rumpled head of trading (Kevin Spacey), then to his sleeker superiors (Simon Baker and Demi Moore), and then to the top man himself (Jeremy Irons), a human velociraptor with the Richard Fuld–like name of Tuld.

Most of the pleasures of Margin Call involve watching all of these fine actors play off one another, trading dialogue that owes more to David Mamet than to Wall Street while the clock ticks down to the next day’s trading and the bankers decide what is to be done. (Irons gets off the film’s best line, telling his subordinates to explain the complexities of their analysis to him “as you might to a small child, or a golden retriever.”) The answer seems to be to sell everything, as fast as possible (a maneuver the real Lehman never quite managed), in the hopes of being the first rat off the sinking ship. But Spacey’s head of trading, the man who will actually need to supervise the selling, resists: Selling worthless paper to the bank’s slower and more gullible trading partners offends his sense of honor, and he thinks that it will destroy the firm’s reputation even if it saves its finances.

This dilemma is the hinge on which the last act turns, but the movie leaves little doubt which way its characters will ultimately break. Margin Call is a film, ultimately, about the magnetic power of money, and the way that the extraordinary rewards of a financial bubble siphoned a generation’s worth of elite talent to Wall Street, and away from fields — engineering and science in particular — where they might have done something more lasting with their lives than tip the scales for subprime-financed McMansions. Its financial world is a particularly well-remunerated microcosm of early-2000s America as a whole: a place where everybody should have known better and done other than he did, but where the rewards of self-deception were simply too extraordinary to pass up.

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