Margin Call Review

A few days ago, my wife and I watched Margin Call. It's a movie I had oddly never heard of until last week -- oddly, because it got very strong reviews and had a pretty glittering cast including Kevin Spacey, Jeremy Irons, Demi Moore, Stanley Tucci, and Zachary Quinto.

Margin Call is set over roughly 24 hours at a nameless Wall Street firm that understands the economy is slowing down and is in the middle of massive layoffs. After the head-chopping is complete, a young analyst (Quinto) realizes that his now-former boss (he was among those laid off) was on the cusp of discovering a massive flaw in the firm's risk exposure model. Basically, one bad day (and plenty of bad days appear to be coming) and the firm could go entirely bankrupt. The rest of the movie takes place over roughly the next 24 hours, as the powers-that-be in the firm race to figure out how to liquidate their toxic position before the music stops and save the company.

Notice I didn't add "without crashing the economy." The economy is going to crash -- that's a given. The only question is who will tip the first domino, and the logic is that if the firm is the one to set off the panic, it will incur the least in the way of losses. There isn't much in the way of remonstrating that the firm, insofar as it is significantly responsible for the coming economic crisis, should be the one to face the consequences.

I've been reading over the past few days about the problem of "bad coherence" -- where a system hangs together and makes internal sense, and all the players' decisions are justifiable and sensible within the broader architecture of the surrounding structure, but because the structure itself is toxic justifiable, sensible, and reasonable decisions are morally terrible. Margin Call does a wonderful job illustrating that problem. One reviewer said, and I agree, that the film is significantly stronger because of how it doesn't moralize -- there are little in the way of "greed is good!" speeches or mustache-twirling about how they're the kings of Wall Street and the peasants can get wrecked.

To the contrary, the firm's internal functioning is in some ways admirable if one forgets what it's in service of. The relatively junior analyst who discovers the problem isn't met with a lot of chest-thumping about how he's just a kid and who-does-he-think-he-is -- his bosses (all the way up to the CEO) take him seriously and pretty rapidly react to the problem as a problem. There's no shooting of messengers. The firm certainly views all of its cogs as expendable, but it can get away with it because if the cogs agree to be expended they know they'll be handsomely rewarded and if they try to maintain their dignity in any way they'll be crushed. The closest thing the film has to a comedic through-line is the company's desperate attempts to find Quinto's old boss, who they just laid off (and whose phone they unceremoniously shut off) -- not to apologize, but so that they can pay him an obscene sum of money to sit quietly in a room for the next day and not spill the beans about the "problem" and thus ruin the firm's liquidation strategy. He initially doesn't want to cooperate -- not because he actively wants to screw the firm, but he certainly isn't in the mood to do them any favors either. But eventually he yields, because the choice is between getting a ton of money for doing nothing (when he's just lost his job) or having the firm blow up his entire severance and healthcare package. Some choice.

Hell, even when it came to how they handled the layoffs, my wife basically whistled and called it "textbook".

But the result, again, is mostly "rich people stay rich and avoid consequences". Plenty of people at the firm will lose their jobs, but they're mostly lower-level grunts who -- again -- are receiving giant cash payouts if they agree to pay ball. The surrounding economy is going to enter a crisis, but that's accepted as part of business -- economies sometimes crash, the feeling goes, and there's no profit in going down with the ship. The film relentlessly constructs a vise where any opportunity for anyone to display a little personal dignity, or pro-social tendency, is shown to be ultimately futile and counterproductive -- and it does it without marking any of the characters as sociopaths. An impressive feat indeed.

Anyway, I highly recommend this movie. It's a tight, quiet thriller that deserved more attention than it got (or maybe it got plenty of attention and I'm just oblivious. Either way).