By Daniel Garrett
Directed by J. C Chandor
There is a great deal of power in New York’s financial district, on Wall Street: the power is that of money and ownership, of knowledge and connections, of social ideals and transgression. It is the power of individuality and the power of corporations. That great power has experienced crisis at different times, demonstrating its devastating hold on the rest of the country: and the film Margin Call presents one of those times, when the holding of large amounts of debt in corporate accounting records threatened their balance sheets and survival. Margin Call is a beautiful, dramatic, intelligent, rigorous film set in a world of high capitalism, with ambition, competition, knowledge, insecurity, and power, a world in which the layers of influence and information challenge interpretation. Directed by J. C. Chandor, it features Kevin Spacey, Paul Bettany, Jeremy Irons, Zachary Quinto, Penn Badgley, Simon Baker, Mary McDonnell, Demi Moore, and Stanley Tucci, most of them playing significant members of an important financial institution. Its story begins with the morning firing of employees at a financial investment firm, including a man in the risk assessment department who has been analyzing a recent financial occurrence that may be a significant problem. The firing is impersonal and insulting; and, the insult is the impersonality. Corporations have requirements, rules and rewards, rather than ethics, manners, and sensitivities.
The risk assessment analyst, who had begun to discover a grave problem with the firm’s formula for operations and generating profit, tries to draw attention to that work before he leaves the office, but the senior people he mentions it to coolly and politely point him to the door. He, Eric Dale (Stanley Tucci), is not allowed to complete his work, but passes that work on to a junior assistant—a brilliant but shy young man, Peter Sullivan (Zachary Quinto), who figures out the problem and realizes the company is in great trouble. The young analyst reports to his new supervisor, Will Emerson (Paul Bettany), and the news begins to travel up the chain of command, to Sam Rogers (Kevin Spacey), a great salesman somewhat distracted by the illness of his dog, and then to Jared Cohen and Sarah Robertson (Simon Baker, Demi Moore), and then to John Tuld (Jeremy Irons), and a company board meeting is called. Jared Cohen and Sarah Robertson are colleagues, but they cannot assume allegiance: they are like two people on different ends of a seesaw, with Robertson thinking they might be together and Cohen wondering how to tip her off. Demi Moore as Robertson is a figure of apprehension and dread, knowing someone will be sacrificed; and the images of her awaiting the dawn in her office suggest a brave, thoughtful, sad woman. The great mistake must have a scapegoat, though the system is at fault: a system more devoted to conceptual value and estimated value than practical value. There is more than one financial institution that is at risk of failure: with the entanglement of one corporation with another and with Wall Street invested in most significant sectors of the country, the financial system itself, and consequently the American economy, are also at risk. The film Margin Call covers the financial, professional, social, and personal conversations that take place. What can the company do to save itself? Does it sell its toxic assets to others? Will it ever be trusted again? Who will take the blame for the losing strategy that led to this moment? Who should have anticipated this? What will be the effect on other companies, and on the larger society? How will the lives of those in this particular office be changed? The film is a compelling and a surprising pleasure. It has humor, and its images are composed with elegance and thought.
What caused the financial crisis of 2008? Was it that banks and financial institutions, as organizations that saved and loaned money and made investments, maintained conflicts of interests, responsibilities to customers and themselves that were at odds? In the early part of the twentieth century, in a growing economy with the extension of equity and credit, the manipulation of stocks—artificially raising prices and selling them before the prices fell—led to a crisis in the system; and the subsequent Glass-Steagall act prevented commercial banks from acting as investment banks but that was repealed in the late 1990s. In an August 27, 2012 article called “Repeal of Glass-Steagall Caused the Financial Crisis” in the magazine U.S. News & World Report is a bit of financial history and an analysis, and the article states, “In 1933, Congress passed Glass-Steagall in response to the abuses. Banks would be allowed to take deposits and make loans. Brokers would be allowed to underwrite and sell securities. But no firm could do both due to conflicts of interest and risks to insured deposits. From 1933 to 1999, there were very few large bank failures and no financial panics comparable to the Panic of 2008. The law worked exactly as intended,” recalled writer James Rickards. That necessary regulation was repealed in 1999 by the Clinton administration with Republicans in Congress at the request of large financial institutions, with the resulting return to previous indulgences and deceptions.
What caused the financial crisis of 2008? In an April 9, 2010 report prepared for the United States Congress, Mark Jickling, a financial economics specialist with the Congressional Research Service, identified various factors: the national and international nature of financial markets, the complex mix of business transactions handled by financial institutions (banking and loans and investments and risk-sharing in the debt sale or derivatives market, especially with bad loans packaged as good investments), and weak regulation by industry and government. Very significant were lax mortgage lending rules in the housing market that encouraged and allowed banks to loan money to people who could not maintain a mortgage or repay the loan. The high price of housing and the making of bad loans did not subvert the great, indulgent faith in the wisdom and balance of the financial markets. Yet, the relation of assets to debt was a threat to the stability of banks, thanks to the low requirements for the holding of bank capital in relation to that debt, and the increasing dependence on computer models and the fact of shoddy bookkeeping, as well as the compromised perspective of personnel due to personal bonuses received for risk-taking. That state of affairs existed in a context of national deficits in the United States and the United Kingdom. The probability of human error and negligence were the fuses that lit the unexpected bomb.
Power is authority, control, energy, faith, influence, knowledge, might, reputation, resource, and threat. It is the ability to compel action and to create change. It is what most of us want, for freedom, for protection. Yet, we exist with little of it, subject to the crises that come when circumstances shift and we are not as prepared as we would like to be. J. C. Chandor’s Margin Call creates an illuminating, invigorating drama out of a crisis that would affect the country and the world. Its stars—Jeremy Irons and Simon Baker and Kevin Spacey and Demi Moore and Paul Bettany—are incarnated as people whose existence and power we have seen or suspected, people of privilege and perks and devastating power in a world that seems ordered, established in fine architecture and supported by extraordinary technology with a certain behavioral decorum despite sometimes vulgar language, but which, in fact, has the cruelty and wildness of a jungle. It is clear that the details—relationships and financial products and risks—attained a complexity that could not be managed with genuine assurance or security. Corporate leaders have become the knights of the realm, if not higher nobility, and their defenses were abundant but weak: they have power not because they have earned it by the creation of value or can maintain it by merit but because they are allowed it by government and citizenry. In the film, one after another powerful figure asks for the complexities to be explained simply. They do not know what they should know: it is an absurdity. It is also a tragedy.
Daniel Garrett, a graduate of the New School for Social Research, and the principal organizer of the Cultural Politics Discussion Group at Poets House, is a writer whose work has appeared in The African, All About Jazz, American Book Review, Art & Antiques, The Audubon Activist, Black Film Review, Changing Men, Cinetext, Contact II, Film International, The Humanist, Hyphen, Illuminations, Muse Apprentice Guild, Option, Pop Matters, Quarterly Black Review of Books, Rain Taxi, Red River Review, Review of Contemporary Fiction, Wax Poetics, and World Literature Today. Daniel Garrett has written extensively about international film for Offscreen, and comprehensive commentary on music for The Compulsive Reader.