The Big Short depicts entrepreneurs as evil, shown throughout the banking sector. It is an important book explaining the fundamental causes of the Great Recession in style so readable that virtually anyone could wrap their head around it. Michael Lewis explains what he believes to be the underlying cause of the financial recession in the book’s final pages. He describes that the problem is caused not by greed alone but by the “framework of subsidies that funneled the selfishness.”
Lewis (2015) explains that the problem caused is more complex and subtle reasoning appealed to an individual, making it possible to presume that because avarice is an inherent human sentimentality, individuals should strive to handle it instead of negating it from the societal structure. The most productive way to accomplish this is to ensure that all stakeholders’ interests are aligned. Nevertheless, this is one notion that Wall Street has continually failed to comprehend over the decades; this resulted in a repeat of the “heads I win, tails you lose” scenario in the run-up to the recession.
Financial companies were allowed to leverage up and take on risks with the explicit understanding. This was done with the realization that the US legislature would be bailed out to avoid more such disasters if things went badly. “If you want to understand how individuals behave, look at their incentive schemes,” Charlie Munga once said (Lewis 2015). The book reinforced individuals’ belief in the power of incentive schemes, but it also made most readers realize how important enhanced economic legislation is in handling such incentive schemes. When one of Eisman’s top traders, Danny Moses, was approached with a relatively close trade.” Danny comprehended Wall Street’s “dog eats dog” culture better than most (Lewis 2015).
His preliminary disillusionment of others worked to his benefit, allowing him to focus on a person’s true motives and recognize the genuine chance of creating the trade. Even though his communication style may be startling or unfamiliar at first, it is beneficial in the long run. By ‘laying it all on the table,’ both parties gain trust since they feel secure. When Eisman was “intrigued about a particular topic, his inquisitiveness becomes much more essential than being argumentative,” according to Vinny; he was in “learning mode.” Eisman’s straightforward approach leaves no open the possibility that “what you see is what you will get, period.” At the same time, some viewers may have construed Eisman’s evil demeanor as a sign of pomposity. His loss of social skills and rational thinking allowed him to perceive things objectively, which many other energy Wall Street titans seriously lacked.
Lastly, Steve Eisman may have perturbed a few wings in his pursuit of the truth, but he is always willing to be completely mistaken. He is seen to be entirely driven by the desire to pursue fact at all cost. The same trait can be found in Charlie Ledley and Jamie Mai of Cornwall Capital, whom both stated, “We kept trying to find people who could clarify to us why we were totally incorrect.” Even though there may have been other important motives for the couple to affirm their exchange idea, they showed kindness and deliberately sought out viewpoints on why they were mistaken. This showcase of humbleness is extremely rare in today’s modern world of competition, in which everyone is anxious for positive encouragement.
Reference
Lewis, M. (2015). The big short: Inside the doomsday machine. Web.