I watched the big short twice and each time there was a different message
Random photo from google images
First watch, the mirage of smart people
The first time I watched this film I thought it was a well done movie that was insightful to the mirage of “smart people” — the idea that a collective of undeniably smart people can be woefully wrong. This is actually a recurring theme through out history. Think about truth and knowledge seekers in history that had to rebel against their era’s thought leaders. One example is Charles Darwin who introduced the theory of evolution through natural selection in opposition of prominent figures in the field, such as Rick Owen, who supported the theory of creationism.
As painfully obvious as it should be that even smart people can be wrong, as a society we often refuse to question the status quo presented to us by the ruling thought leaders.
Second watch, nothing is too big to fail
In my second watch of this film, the key theme I was compelled by was the idea that many systems in our society are held by our trust in institutions and that things that are too big too fail.
The three things that come to mind of mistaken as too big to fail are government, banking deposit system and democracy.
Government is not too big to fail
The idea of government not being too big too fail is seen throughout history. For example take the fall of the Soviet Union which had been a super power before it’s collapse. The execution of its centrally planned economy had led to economic instability and instead of changing the way it approached it’s economic policies, it remained steadfast in the same trajectory. Other examples include the fall of the Roman and British empire.
A present day example of this is the inflationary policies that have taken place in the last year. I’m not an expert on economic policy but it appears that the government has chosen to push the limits of fiscal spending without fear of the consequence of the inflation. I would argue that the government continuing to implement inflationary policies despite inflation already being alarmingly high is similar to banks continuing to trade on falsely rated bonds despite the increasing evidence that these bonds were risky in the big short, or the Soviet’s refusal to restructure it’s economic policy approach in the 20th century.
Banking is not too big to fail
The idea of banking deposit systems being not too big to fail is a cry that has been continuously made by people in crypto. There’s a comfort in putting our money in the banks. We don’t question that our money will be there tomorrow. At the end of the day it’s ours and the bank is just holding it (right?). In reality if at any moment a a big enough people decided to be skeptical of the system and raise alarms or withdraw their money, the system would be in trouble. As with most things in society, there is a non-zero chance of failure. However, for society to develop we’ve had to ignore this non-zero chance. If we didn’t comply, access to capital, ease of banking and flow of money wouldn’t have advanced the way it has over the last century. My unpopular opinion, this sort of complacency is actually fine and needed for society to function, but just alarmingly unhedged for by those who are aware of it.
It remains a fact that we have accepted and treat the deposit system as simply to big too fail and do not have enough guard rails to account for it’s mortality.
Democracy is not too big to fail
The idea that democracy is too big to fail is a very dangerous assumption. People believe they can bend democracy to comply with their views and democracy will still be intact. This bending of democracy manifests itself in ways such as suppression of opposing views or authoritarian acts to ensure society conforms to a chosen moral view. This can range from governments silencing dissenting opinions, social media platforms de-platforming what they define as radicalized views, or governments controlling the properties and agency of its citizens they deem as threats without any clear justification. I want to be clear that morally, I understand why and how the listed scenarios are different. There is a clear difference in severity between a government imprisoning someone for daring to criticize them and a social media platform removing an account that promotes hate speech.
But practically, it doesn’t change the fact that once you choose to center democracy around a specific point of view, you give permission for it to continue bending or even bend completely to the other side. However, the defining criteria remains the same. There is an action that a group of people deems unacceptable, and then there are consequences to control those actions.
Overall, people believe that democracy is strong enough to withstand us bending it once in a while for “moral reasons” or for the sake of “doing the right thing” but unfortunately democracy can and will fail when it is repeatedly not respected.
In conclusion….
I think it serves you well as an individual to be able to think critically against what smart people tell you (but it also serves you well to be able to accept when smart people know more — but this topic is suited for a different think piece.
The themes I found in my second watch of The Big Short that made it so much more eye-opening than the first watch were the ideas of things that are “too big to fail” and things that are slowly deteriorating but people have chosen to ignore.