Interview with Andrew Ross Sorkin: 'Wall Street Bankers Are Not Pure Evil'

US journalist Andrew Ross Sorkin speaks to SPIEGEL about his book, "Too Big to Fail," the inside story of Wall Street and the financial crisis. He talks about the lack of remorse on the part of many CEOs and addresses the question of whether he got too close to the country's top bankers.

SPIEGEL: Mr Sorkin, in your book, former US Treasury Secretary Henry Paulson is quoted as saying: "That makes me want to vomit!" And JP Morgan Chase CEO Jamie Dimon you quote with: "There are not enough lifeboats. Someone is going to die. So you might as well enjoy the champagne and caviar!" The big shots of the financial world usually don't give quotes like that. Why did they talk so openly to you?

Andrew Ross Sorkin: This is a question I have often asked myself. When I first started reporting the book, it was not easy. It was still very much an open wound for many and they did not want to come to the table at all. But once you spend a couple of months really digging on something and you've talked to dozens of people you start being able to piece a lot of the puzzle together. They realize that when everybody else is talking they should talk too, because you want to be able to tell your side of the story.

SPIEGEL: The classic game: You hint about how much you already know and thereby bait them to tell you what they know?

Sorkin: There was an executive I was trying to reach out to for months, who didn't want to talk to me. Finally I get him on the phone. I say I have a scene here: you're at Morgan Stanley CEO John Mack's house, it's July 12 or 13, you're sitting on the couch on the right-hand side, it's a green couch, you're eating a chicken wrap sandwich, your son's lacrosse game starts atha 1:30 p.m., you don't show up till 2:30 p.m. There was a long pause on the phone.

SPIEGEL: And then he said I think we should talk.

Sorkin: And then he said I think we should talk.

SPIEGEL: You interviewed more then 200 sources, among them most of the leading Wall Street bankers like Goldman Sachs CEO Lloyd Blankfein and former Lehman Brothers CEO Richard Fuld. Were those conversations with you somehow cathartic for them?

Sorkin: I have never disclosed exactly who spoke to me and who did not. But I think some of them felt that this was cathartic. There's no question that for certain people I was like the psychiatrist. There was a sense of: Let me tell the story.

SPIEGEL: Some even provided you with phone logs, notes and e-mails. Long passages of the book feel as if you were actually sitting in those meetings where the future of the financial system was being debated.

Sorkin: There's a CEO who I met with early on who actually came to the inter-view with his notes from the weekend at the Fed ...

SPIEGEL: ... the US Central Bank which played a central role in rescuing the financial system.

Sorkin: Most of these CEOs, frankly, don't take notes. These are the most amazing notes you've ever seen, he'd actually drawn out where everybody sat. And I ask him, at the end of the interview, why are you giving me this stuff. And he says: For the same reason I took the notes. I thought this was history in the making.

SPIEGEL: Did any of these bankers you talked to show remorse?

Sorkin: All of the characters in their own way have some sense of remorse. But they see this as a crisis with many fathers so they consider themselves to be almost blameless.

SPIEGEL: That seems absurd.

Sorkin: They see this as a crisis that's the result of housing policies, that's the result of low interest rates, that's the result of bad enforcement of regulation and bad regulations, of credit rating agencies. If you want to blame them in the context of everybody else, fine. If you want to blame me alone, they say, look at everybody else. Many of them feel vilified now.

SPIEGEL: But surely they must understand the public anger.

Sorkin: I think that's very hard for many people in this industry, in part because it's a business of big egos. There are a lot of people in the business who think they did a lot of the right things. They might have made a lot of money, but they give the money to charity. They went to a good school and they thought: I went up the ladder, and I did what I was supposed to do. They can't fathom that they might have made a mistake along the way.

SPIEGEL: Even in the moment of greatest crisis the bankers in your book don't seem to show fear. Lehman Brothers boss Richard Fuld seems to regard the looming collapse of his company only with frustration and anger. Did any of the financial executives ever admit that the prospect of the collapse of the global financial system scared them or made them nervous?

Sorkin: I think there were probably elements of those feelings. But there's also a feeling that they can't fail, that they won't fail.

SPIEGEL: Too big to fail.

Sorkin: We think of this phrase in the context of financial institutions which arguably are too big to fail. But I always saw it as a human drama about people who thought they were too big to fail. They come from a culture where there's always another deal, there's always another trade to be made. And so even at the point where you think they have their last card to play, they think they've got three other cards.

SPIEGEL: Those CEOs who made it through the crisis seem to see themselves as survivors.

Sorkin: Some of them use the phrase survivor as if they were cancer survivors: Yet they helped create the cancer themselves and then needed tax money to be rescued.

SPIEGEL: Your own methods have been criticized, too.

Sorkin: When you write a successful book, there are always critics.

SPIEGEL: You won't be too surprised to hear that in a long piece in New York Magazine some of your colleagues from the venerable New York Times were quoted talking about your work, and some of them did not seem happy about your success. One criticism was that you might be treating the financial world's bad guys too nicely.

Sorkin: No, I don't. And I thought that article was just a lot of gossip. Being open-minded and trying to understand something is very different from being nice. Just because it seems fashionable to treat all Wall Street bankers as pure evil and criminal does not mean that they all are. Reality is not black, nor white, it is gray.

SPIEGEL: So you don't exchange favors like: "Talk to me, and I'll make you look good?"

Sorkin: No, I do not. I try to be fair -- that's my only goal. This is good traditional beat reporting. I am still young, but I started working at the Times as an intern when I was 18 years old, standing at the copy-machine. A little later I was a correspondent in London, and those were the most beautiful, the freest years. For 10 years now I have been covering Wall Street which requires hard work, 30 or 40 phone calls a day, constant e-mail-exchanges, meetings. It's a lot of standard hard work.

SPIEGEL: Is it possible that some colleagues underestimate the effort that it takes?

Sorkin: I have no idea. I think that there are people in our business, the reporting business, who like a good conspiracy. And by the way, I like a good conspiracy, too. But it has to be true. The book has been very well reviewed by other journalists, who said the book was fair and tough on the characters. So I don't think there's much debate about it.

SPIEGEL: People say you may be setting a new standard for the New York Times.

Sorkin: I have heard that argument before, but it points at something else: In 2001 I started the online-platform DealBook for the Times

SPIEGEL: … which covers mergers, takeovers, business news of any kind …

Sorkin: I now do a radio thing as well, and I go on TV. My view is that the future for all of us, I really believe this, is going to be a multi-platform-, multidimensional journalism.

SPIEGEL: Your colleague Thomas Friedman, who is 60 years old, told us that he was not sure anymore if he would retire at the Times. Is your paper dying?

Sorkin: Oh no, there are very few really extraordinary important journalistic institutions in this country, institutions which are backing our society, and the New York Times certainly is one of them. This is one institution that actually has a much brighter future than people give us credit for because our readers want us to live.

SPIEGEL: Will they also be willing to pay for information?

Sorkin: That's the better question. Obviously I hope so. I imagine it will be challenging but of course we have to find the ways. That is why I try to work as an entrepreneur with the Times' mandate.

SPIEGEL: What is the brand now -- the Times or you?

Sorkin: It's a two-way street, I would say. I have been a remarkable beneficiary of the New York Times, so I would never take anything away from the value of working at an institution like this, picking up the phone and calling someone and saying: Hi, it's Andrew Sorkin from the New York Times. That is a very valuable calling card, and I never forget that.

SPIEGEL: There are many passages in your book like this one: Treasury Secretary Tim Geithner goes for a run, the sun rises over the Brooklyn Bridge, and Geithner thinks of all the poor American workers. I sounds like you are inside Geithner's head. It reads like a novel.

Sorkin: This criticism I understand. Bob Woodward, Michael Lewis and Bryan Burrough have all been writing in this construct; and if I am being put in their league I have a hard time complaining.

SPIEGEL: It's not that simple.

Sorkin: I agree, it is delicate. But every time you add "he remembered, he thought, he told me, he said," it builds a wall between you and the reader, and that is why I left these constructions out. Yes, it is a fine line, a boundary, and for this book I have pushed it forward a bit because the whole point of the project was to lead my readers into the rooms where the decisions were being made, and into the heads of those making the decisions.

SPIEGEL: You also describe a surprising level of intimacy among the top bankers. That seems to verify all those conspiracy theories about a small group of players who really thought they ruled the world together.

Sorkin: What I wanted to show is that all of these firms were not only interconnected in the context of money flow, but really were interconnected because it's the same people who are behind all of them. And that there are 30, 40, 50 people who are really at the center of all of the decision-making. And you realize that these little, petty jealousies, or issues that just happen in relationships, like those that happen in our daily lives, were happening in this environment, but in this case were impacting, in some cases, billion dollar decisions.

SPIEGEL: Obviously you already knew some of the major players from before, but did any of them impress you or surprise you?

Sorkin: I was impressed a little bit more with JP Morgan Chase boss Jamie Dimon than I thought I'd be. He was one of the few CEOs who really understood his business backwards and forwards. He was one of the only people who could discuss the various tranches of a CDO (Collateralized Debt Obligation) and then explain to you why the ATM machine on 21st Street in Manhattan is broken.

SPIEGEL: What about Richard Fuld, who became the poster boy of Wall Street villains?

Sorkin: I think there were elements in which he was a tragic figure.

SPIEGEL: Really, a victim?

Sorkin: When people talk about greed and Wall Street they talk about him. But he is somebody I wouldn't argue was necessarily greedy. I think he was impressed with himself, he was impressed with the power that he had. And I think he was blinded by this sort of love affair that he had with Lehman Brothers and with his role inside that institution and couldn't really see straight. But is he a bad guy? I don't think so. Any one of these characters, any one of these CEOs, could have easily become the villain had the government not saved them.

SPIEGEL: So the culture of Wall Street seems to be at the heart of the problem.

Sorkin: The ethos of Wall Street is the sense that greed is good, it is the sense that you get kudos, you get points for scoring one on someone else, for outsmarting them, for outwitting them.

SPIEGEL: Will this ever change?

Sorkin: I don't think so but I do believe that Wall Street over the next five or 10 years, especially after all this regulation, is going to become much more of a boring business.

Interview conducted by Klaus Brinkbäumer and Thomas Schulz

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1. Root cause of Financial Crisis: My Opinion
lakechamplainer 08/21/2010
In my opinion, the root cause of the financial crisis was the "revolving door" between government and Wall Street. This contributed to people in government forgetting that their primary responsibility was to the population as a whole, and not their former friends and employers. People like former Treasury Secretaries Hank Paulsen, Bob Rubin, and Don Regan. These people, and the many others below them, when push came to shove as it did in 2008, tended to think first about their fellow "Super-rich" who were often their neighbors on the Hampton's. Not to sound too Marxist, but class loyalty to fellow "capitalists" often trumped loyalty to one's nation and to the worldwide financial system. The irony of course is when the crisis occurred, all the preaching about supply and demand, the need for free markets, the need for firms to fail and government to not pick winners, etc. was completely forgotten (or overlooked). I found the most telling excerpt from the interview to be that below: Sorkin: All of the characters in their own way have some sense of remorse. But they see this as a crisis with many fathers so they consider themselves to be almost blameless. SPIEGEL: That seems absurd. Sorkin: They see this as a crisis that's the result of housing policies, that's the result of low interest rates, that's the result of bad enforcement of regulation and bad regulations, of credit rating agencies. If you want to blame them in the context of everybody else, fine. If you want to blame me alone, they say, look at everybody else. Many of them feel vilified now. The housing policies, for example, were partially set up to keep Fannie Mae and similar organizations going, which kept politically connected people employed and kept political contributions coming. Bad enforcement of regulation was due in large part to putting the foxes in charge of the chicken coop, as at the SEC. The performance of the rating agencies was laughable, as they would issue warning a day or before failure. These former captains of finance have no reason to feel vilified now. If they really believe that they are, they have lost touch with reality.
2. America as Concentration Camp
esperonto 08/24/2010
I see the whole situation these days as being like a concentration camp: Northern Europeans or people with Northern European ancestry look down arrogantly on commoners, in other words normal Americans. They control big banks and government and go to Ivy League schools. The Elite believe absolutely in their superiority, and think that all developing nations are lesser humans to abuse or coerce for cheap labor. There is a strong element of racism that way in the elite. The fact that all the banks are mostly Protestant seems to go hand in hand with this theory. The way they control is because they are so certain idiotically of their own superiority that everyone else actually believes in the reality they create. If one learns to dislike Northern Europeans as a whole, then one can see how aggressive they really are in their control. After all, Deutsch Bank was in Germany, not Italy or Spain. So it must be the north of Europe that is the problem. Northern Europeans are sick of whining anti-war liberals. They want new conservatism. They want some new war. You can see how much better life is with these conservatives. Their banks started a world recession. The oligarchy dragged us into WW3, but at least they got a chance to break out of stagnant stable liberalism. They showed us that it is much better now after they made their new conservatism. Now they are free from the bonds of doing the right thing. Now they can foreclose your home and put you out on the street. Sure they world might end and the human race die out, but at least these conservative northern Europeans are free to do what they want. They want to stop the unions and make everyone get jobs, but the strangest thing of all is they outsourced all the work. All of these contradictions are at least some protection for the conservatives, who want to do whatever they want. A white man who cannot murder will never be free. Homicide is part of the race's soul. So try to empathize with whites, they have to kill to feel whole. Without war the white race is unfulfilled. Those poor Germans, all those years after WW2 they weren't able to kill! Poor souls, how did they make it so long without mass murder? I guess killing all the jews satiated their urge for a while. Then there is the USA they could live vicariously through. After all the USA is mostly Germanic. I read something crazy about Jews controlling everything. I think only really uneducated people think that. I have read numerous books about communism, and I know almost for a fact that the Protocols of the Elders of Zion were written by the Czar's special police force. Sharon apparently made some comment about Israel controlling America, but I think that was just some Jew blowing his top, after all most Palestinians think the USA is controlled by Israel, so its only natural that some leader of Israel will blow his top and actually perversely say that. Not that I side with the Jews or anything. I prefer Communism and side more with Southern and Eastern Europeans. I see everything as a Northern European or Prussian/Celtic conspiracy of world domination. Deutsch Bank funded Hitler after all. Protestants.
3. Dante' Had It Right
oberkochen1 09/04/2010
Mr. Sorkin's Wall Street charm offensive misses the obvious facts. 1) "America's best and brightest" have gravitated to Wall Street for one thing, self-aggrandizement. Those who suggest that working on Wall Street is part of a higher calling, are delirious and miss-guided. 2) The U.S. government enabled Wall Street's unmitigated greed. Without the influence that billions in lobbying and contributions, "the Great Recession" might not have occurred or at least its affects would have lessened. 3) Clearly, the U.S. government, Wall Street and the investment community learned little from the not so distant ENRON debacle. 4) All Wall Street bankers are not crooks; just the vast majority. 5) If one wants a truly un-biased assessment of the miscreants of Wall Street, please read a series of articles by Matt Taibbi from Rolling Stone. These articles are factual, unbiased and sobering. Especially, his article addressing the highly touted "Finance Reform" measure. 6) Until the U.S. government actually enacts real finance reform, the smart money will stay away from Wall Street, real reform = re-enacting Glass-Steagall and incorporating The Volcker Rule. 7) The Germans have it right, and to a lesser degree the British. Bankers are here to facilitate the real economy not create a "product less economy or house of cards". Dante' had it right. Circle 8 the place for Frauds Falsifiers, Hypocrites and those guilty of Political Corruption.
4. Biased Article
ubermensch76 03/09/2013
I read this article and then I checked Mr. Sorkin's credentials and concluded his perpspective is completely biased. He comes from one of the richest communities in the United States, Scarscale, NY, which I am sure has a high concentration of Wall Street Bankers that come from his hometown. Essentially, his credibility is compromised b/c of his inbred socioeconomic status, he never directly blasted his "own class" b/c he was likely pre-programmed not to criticize so harshly b/c he would likely be indicting himself, his friends, his parents, his colleagues, and the guys who pay his salary. In sum, the article is rather cowardly, as are most other publications on this subject in the mainstream media, again, b/c they are part of the establishment itself. Who would ever want to admit they are flawed and/or evil even when they truly are? People in the United States are terrified of the notion of class warfare mostly b/c the ruling class instills in them the notion that it doesn't exist even though it most assuredly does w/ the super-wealthy destroying everyone else almost constantly and if it is brought up, it is brought up to shame someone for "not making it" or that individuals are somehow jealous of success, which couldn't be further from the truth. People have every right to be idignant to a self-perpetuating, brutal system with disproportionate rewards to suspect behavior. In the United States, there is still this absurd view that if you work hard, are reasonably intelligent, and more or less ethical, you will succeed, if that were the case there would be a lot more "successful" people in this country. But the ruling class and their agents in the educational system and the media ensure that the population believes in such a far-flung myth. Bottom line, this article is weak and the author is a coward.
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