The film Too Big to fail is a movie that focuses on the financial recession of 2008, where everybody can observe the way different influenced different people functioning within US economy (Hanson, 2011). The movie’s dramatization concentrates on the various events occurring some days before the decisions of important players in the financial sector result in the collapse of the economy.
The concept of a company being too strong to fall is one that echoes all through the movie and is definitely applicable even in reality. The movie investigates an aspect of the financial sector wherein decisions need to be made promptly and also discusses how the concerned companies observed the fall of the financial system. With the interference of the government and the ensuing bank’s conduct, the level of influence these companies hold in the economy becomes glaring. Depending on is shown to be a complicated and erratic aspect, while it remains essential to offer a basis for which the economic system is founded.
Too Big to fail is an important movie for current and future managers because it highlights the roles of various stakeholders in the economy and the helps managers to understand the dynamics and impacts of the decision making process.
All through the film, there are different observable ethical dilemmas. For example, Paulson intended to prevent the economic recession by any means notwithstanding the approach they needed to implement even if it meant for them to break the law. In Too Big to fail, Bear Stearns’ case had already occurred and the Lehman Brothers Company was the firm experiencing the heat. For the Bear Stearns’ case, Hank Paulson decides to be proactive and rescue the firm. Fuld, CEO of Lehman Brothers company presumed that the government would eventually save the firm, however this time Paulson did not want to proceed because all CEOs had to be accountable for their activities. By this, he desires for everybody to behave ethically in the growth of the economy.
One other ethical dilemma is observed during the dialogues between Korean expatriates and the Lehman’s Brothers when Fuld was reluctant to trade the shares at a lesser price without considering that this did not only affect him, but affected the market as a whole. It was necessary however for people to sacrifice something if they were about to do the right thing. Fuld failed to consider the magnitude of this problem for the rest of the economy.
One other ethical dilemma during the economic recession was the fall of Freddie Mac and Fannie Mae (Moseley, 2008). The actions of the Russians and Chinese may have resulted in the fall of the US economy if Paulson did not proceed with actions concerning Freddie Mac and Fannie Mae. For this reason, Paulson decided to rescue the firm and the government assumed control. This exposed the way Paulson acted differently from what he initially said about Lehman Brothers. Another ethical issue is Paulson’s reaction to the problems faced by AIG (Greenberg & Cunningham, 2013). In reaction to the issues the company faced, Paulson’s decision to act cost him his credibility, even though he actually intended to avert the impending economic recession.
Although trust was not constantly present, an answer for financial institutions still emerged after persistently refusing to compromise. The banks purposely watched Lehman fail and this led to the subsequent capital destabilizations from the intended message ensuring that private sector issues remained private.
While the movie tried to resolve the ethical dilemmas, it failed to highlight some possible applicable methods. It was necessary for the movie to provide a measure to prevent the future use of public funds to support private owned companies. Should a similar situation as what was depicted in the movie arise, there will still be need for the government to use public funds to support private companies. The movie does not only show how important it is for the government to support companies that are seemingly ‘too big to fail’, but also ominously explains the potential issues that may arise from these problems.
The concept of the movie “Too big to fail” is accurate whether the movie admits it or not, as the film elaborates the ethical rationale behind the government’s decision to offer a solution for companies that could be perceived as the backbone of US financial segment. While the public may have the mindset that it is not necessary to react to such an economic issue until the companies collapse, a comparable situation today would obviously necessitate actions comparable to those in the movie, and strengthen the concept of “too big to fail” in modern day. Therefore, the movie Too Big to fail presents a concise analysis of the ethical issues arising from the government’s decision to assist the companies involved, and also offers effective analysis in support of the decisions taken by the government.
References
Greenberg, M. R. & Cunningham, L. A. (2013). The AIG story. NJ: Wiley
Hanson, C., (2011). Too Big to Fail. [DVD]. USA: Home Box Office (HBO). Web.
Moseley, F. (2008). The Bailout of Fannie Mae and Freddie Mac. Web.