Is the ‘The Big Short’ an accurate description of the financial crisis?

Film wins Best Adapted Screenplay

The results for the 2016 Oscars are in, and The Big Short won Best Adapted Screenplay. But despite the new Hollywood proof that the film is impressive, it doesn’t mean that the movie is the most accurate source for how the financial crisis unfolded.

The comedy motion picture flashes back to the 2008 timeframe where the subprime debacle was just taking hold.

The cast of characters bet against the big banks, and potentially, the American economy to get rich while the Empire crumbled.

Add in a couple of Hollywood A-listers and you get The Big Short movie, based on the book by Michael Lewis.

During a recent Brookings Institution event, the movie’s director Adam McKay recently joined a couple of economics experts, a journalist who worked on the movie, and one of the people behind a real-life short portrayed in the film to face these issues head on, The Brooking Institution said in an article covering the discussion.

Read the full article for all the key points, along with a full video of the event. Here’s a sneak preview of one.

“Our government is still completely captured by the banks”

The film’s ending, which David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at Brookings, said “leads the viewer to believe that we didn’t do anything,” sparked a particularly interesting debate. When pressed on why he didn’t refer to any of the new policies and protections implemented in the wake of the crisis, including the Dodd-Frank Act and the creation of the Consumer Financial Protection Bureau, director Adam McKay asserted his opinion that the key failures are that the big banks remain big and that fraud went largely unpunished.

“I’ve had no second thoughts [about the ending],”said McKay, “and I think at this point there’s no question that the banks continue to grow." The big elephant in the room, he later added, “is that our government is still completely captured by the banks.”

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