The film version of The Big Short, however, takes Lewis’s almost-comic telling of the financial crisis and reformulates it as tragedy, paying far more attention to “ordinary Americans” and the wider culture in which finance is embedded. The film splices in montages of Wall Street activity with stills of Ali G, Britney Spears and South Park’s Eric Cartman. We see the Spice Girls and the Facebook “like” icon; we see for sale signs outside houses and signs in supermarkets announcing that they accept food stamps.
In one of the film’s most painful scenes, two members of Eisman’s team, Danny and Porter, go to Florida to survey mortgage owners who are over ninety days delinquent. They find a complex of large houses with swimming pools and backyards, almost all of them empty. When they do eventually find someone living in one of the houses, it’s a burly, sleepy man with a young child clinging to his legs. He’s been paying his rent, he says; he doesn’t know that his landlord hasn’t been paying the mortgage, or that he filled out the mortgage application in the name of his dog. “Seriously man, am I going to have to leave?” he asks. “’Cause my kid just got settled in school.” Danny scratches his neck, frowning, uncomfortable. “You should talk to your landlord about that,” he says, backing away. The consequences of him being right become real, to him and to us.
Reflecting his sensitivity to public mood and interests, Lewis has taken a different approach to finance in his two most recent books from the one he took in The Big Short. In September 2011, the same month that Occupy Wall Street began, he published Boomerang, a collection of articles he originally wrote for Vanity Fair about the financial crisis in a handful of European countries: Iceland, Greece, Ireland, Germany. There are no banker-heroes in these articles, but his role as bemused American means that Lewis treats each country’s predicament with good-humored incredulity: Can you believe the mess these foreigners have got themselves into? As usual Lewis mainly talks to bankers, heads of state and economics professors, but to add local color he throws in a few encounters with ordinary people. In Iceland, for example, he listens to a couple having sex in the hotel bedroom next to him, baffled to hear them making noises he finds “totally incomprehensible.” (They’re speaking Icelandic.)
Boomerang is tremendous fun to read. Yet it makes the social consequences of the financial crisis far more visible than they had been in The Big Short. And in the final chapter, when Lewis goes to California and investigates the financial and legislative difficulties that Arnold Schwarzenegger faced in his time as state governor, he drops his amazed tourist routine. Talking to a long-time resident of Vallejo, a city on the brink of bankruptcy, he realizes he’s hearing a story he’s heard before:
It’s not just a coincidence that the debts of cities and states spun out of control at the same time as the debts of individual Americans. … [Americans had] been conditioned to grab as much as they could, without thinking about the long-term consequences. Afterward, the people on Wall Street would privately bemoan the low morals of the American people who walked away from their subprime loans, and the American people would express outrage at the Wall Street people who paid themselves a fortune to design the bad loans.
In these few lines, Lewis says what it was still possible to keep below the surface when he wrote The Big Short.
Lewis abandoned this kind of social commentary almost immediately. In his most recent book, Flash Boys (2014), he returned to Wall Street, and to the detective plot structure of The Big Short. The book is an expose of high-frequency trading (HFT) and the existence of “dark pools” in which trades take place away from public exchanges, unbeknownst to investors. Its detective-hero is Brad Katsuyama, “golden child” of the Royal Bank of Canada, whose colleagues assume he will one day run the bank, and who embarks upon an investigation into why the market is no longer functioning as it used to.
Ordinary Americans suffer from HFT, since among the investors whose trades are front-run by high-frequency traders are mutual funds, pension funds and university endowments. Lewis has spoken in interviews of his anger at this, but it isn’t a point he stresses in the book itself. Nevertheless, the tone of Flash Boys is often angry. So many of Lewis’s books are motivated by a belief in meritocracy: the best businessman will find a way to succeed spectacularly. But HFT rigs the system, transforming the market from a supposedly level playing field to a place where only those with enough money to access superior technology can win. Flash Boys is Lewis’s confrontation with the possibility that his faith in the meritocracy of business has been misguided. The despondency that this confrontation provokes in him alternates with his excitement as Katsuyama and his team uncover the existence of HFT, realize its unfairness and set out to fix it.
To fix it: this is the crucial distinction between Katsuyama and the protagonists of The Big Short, at least in Lewis’s version of events. Where Eisman, Burry, Ledley and Mai determined to make as much money as they could from their discovery, Katsuyama and his team want to make the system fairer, even if this means they make less money than if they had kept quiet and played along.
As the public’s sense of what a banker-hero might look like has changed, so has Lewis’s choice of hero: as brilliant as Eisman and co. but focused on justice rather than greed, Katsuyama is the kind of banker we can get behind in the mid-2010s. Having found a mystery in the weeds of Wall Street algorithms, Lewis can continue writing about finance in the way he always has: as a closed world full of adventure and scandal, and free from messy social consequences. But if Lewis struggled in The Big Short to reconcile the events of his story with his instinct for comedy, in Flash Boys his trusted model of making the complexities of finance simple and entertaining while avoiding its effects on the wider world—the world of his readers—is pushed almost to breaking point. Once more, Lewis asks us to identify with his brilliant protagonists, without questioning what it means to focus so narrowly on brilliance and success.
In June 2016, Lewis announced he had finished a new book, due out at the end of this year. Titled The Undoing Project, the book is about the research of two psychologists, Daniel Kahneman and Amos Tversky. Kahneman and Tversky’s work focuses on judgment and intuition; Kahneman, whom Lewis profiled in Vanity Fair in 2011, has won a Nobel Prize in economics, but for behavioral rather than classical economics. Perhaps Lewis’s move away from high finance suggests that he thinks his readers’ interest in the subject is exhausted, or perhaps it augurs the culmination of a development increasingly apparent in his last three books: the topic no longer lends itself to the kind of story he wants to tell. Lewis’s career has charted a shift in the general reading public’s perception of high finance; what once was an acceptable subject for comedy now requires a far darker narrative. Perhaps we’re ready for new stories about the financial crisis, stories that don’t take their inspiration from a genre that teaches us nothing and culminates with the restoration of the status quo. These new stories might not be very funny at all.
Art credit: Lawrence Mesich
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This essay appears in issue 12 of The Point.
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