Photo Gallery: Too Big to Fail
Interview with Andrew Ross Sorkin 'Wall Street Bankers Are Not Pure Evil'
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.
