Andrew Ross Sorkin is a financial columnist at The New York Times and the author of the bestselling book “Too Big to Fail.” Following a speaker event on Saturday, The Daily sat down with Sorkin to discuss his background, the challenges of covering Wall Street and what we can expect from the financial sector in the years to come.
The Stanford Daily (TSD): You started at The New York Times when you were 18. What drove your initial interest in journalism, and how has the nature of the work — and the appeal of it — changed over time? How has social media changed it?
Andrew Ross Sorkin (AS): When I started, I was fascinated by media — the world of media. I was actually very interested in advertising, actually. My first job was to work for Stuart Elliott, who’s the advertising columnist, and I was probably more interested in the topic of what he wrote about and the media business than I was in the reporting part. It was really only once I got in the newsroom that I fell in love with storytelling and the adventure every day of learning a new thing and meeting a new person and getting people to say things they weren’t supposed to say.
Has it evolved? I never thought I would have all the opportunities I’ve had over the past [15 years]…So much has changed. Everything has changed. When I first started, they were just implementing email. Even a couple of years ago, the coin of the realm was still to get a big scoop that was going to run on the front page of the paper the next morning so that when you went to the newsstand it was on the cover of the New York Times, but when you looked over at the Journal or the FT…they had nothing. Now, you post your scoop at 4:31 and the competitor has it at 4:34 and the other guy has it at 4:38. Context matters a lot more, analysis matters a lot more than it used to. Of course, speed — just the rapidity of it all — [matters as well.]
Also, the instant feedback [is new]. Used to be you’d go to the mailbox and get letters…you’d get letters from readers, you’d get letters from people in prison. Now I’ve even gotten emails from people in prison. That shift in terms of knowing instantaneously what the reader thinks [is distinctive].
Twitter has become my news feed. It used to be that you’d rely on Reuters or Dow Jones or Bloomberg as your news wires — now, my wire is Twitter. It’s who I’m following and not only the link they’re providing to highlight a particular news issue, but oftentimes they’re picking out that great nugget in it.
TSD: As a financial journalist, how have you found the challenge of reporting on a close-knit community like Wall Street? At this point, would you consider yourself an insider?
AS: It’s funny. By default, as a journalist, I’m clearly an outsider to this world. Over the years, I’ve covered it for a long time…but in the book, part of the challenge was trying to get inside, trying to get the reader inside the room so he could see what’s being said.
It’s much harder than it used to be. As a reporter…this has been a major shift. When I started, there wasn’t this industrial complex around protecting all these people from the press. It used to be you could call somebody up and understand what’s happening, get a little of the inside scoop or try and get some context for what’s happening…Now, there’s an army of lawyers, there’s an army of PR people, there’s a battalion of people whose entire job is to keep you as far away from the building as humanly possible. That has made, I would argue, reporting much more challenging in terms of really providing the sort of deep reporting and analysis…and it’s only gotten worse post-financial crisis. Given so many of the rules have changed, we’re all getting the information at the same time, and there’s a lot more of it. The bad news is that for the kind of deep reporting that tries to really bring you inside what’s going on, that’s harder than ever, sadly.
TSD: “Too Big to Fail” was published in 2009. Looking back on the crisis, have the additional years of hindsight changed anything?
AS: Not that much. I like to think it’s actually stood up. When you go back and look at what’s in the book, and given all of the materials that have since been published…I don’t think there was something out there that really shifted the narrative from the central reporting line of the book. Happily — one of the things you worry about is that one day something would, but I tried to approach it as honestly as I could the first time around and I think we got pretty close to what happened.
My hope still is that history and historians needed a reference point as to what happened. Following anything, it’s very easy to have your views about what should and shouldn’t have happened and what options people should and shouldn’t have taken, but I think the most important thing is appreciating what the actual options on the table are. Oftentimes — and it has clearly happened post-crisis — there’s not a rewriting of it, but everyone has a view. So I like to think that this is the baseline first draft or second draft of history, so that when historians do try and put this in perspective…It’s too early to have kind of real perspective here.
We won’t know whether all of these decisions that were made were right or wrong probably for 10, 20, 30 years. We have to see what happens to the banks, we have to see what happens to the economy…we saved GM, but if GM has a problem five or 10 years from now you’d say it was a mistake to save it the first time.
TSD: Have bankers and regulators internalized the lessons of the 2008 crisis?
AS: I have a very mixed answer. There are certain individuals who appreciate what took place during the crisis and have internalized it. Some of those that did internalize it are no longer there any more, so that worries me. I’m anxious that there’s a new generation of people that are stepping onto Wall Street that don’t have the perspective and context [as] to what took place. Some of those people might be very good — they have perspective on this as an outsider and they’re coming in to make it better — but I’m also worried about anyone coming in that adds risk to the system.
The system can’t be riskless either…We all want to eradicate “too big to fail” and eradicate the idea that there could ever be a boom and a bust. Invariably, life is such, for better or worse, that our goals should be to mitigate the booms and busts. But the idea that the Holy Grail is ensuring that this never happens may be sort of a myth. I hope it isn’t, but I’m anxious it would be.
TSD: Some recently published books, like Kevin Roose’s “Young Money,” allude to something of a cultural issue on Wall Street. Is that a valid point?
AS: I continue to believe there’s a cultural problem or challenge on Wall Street…There remains a cultural question mark around the ethos of greed.
TSD: What did you make of the HBO production of “Too Big to Fail?”
AS: I was a co-producer, actually, so I endorse it…It’s very interesting to see…you write a 600-page book and you have to find a way to dramatize it in two hours. I give Curtis Hanson, who directed the film, and Peter Gould, who wrote it, an enormous amount of credit. As a writer, one of the things you’re worried about is that they’re going to distort it or add a girlfriend and a sex scene or something that is just so [gratuitous]. I think they did a tremendous job of keeping the story suspenseful — and you knew the ending — without tarting it up. I think it was as true to the book as I think anyone could ask.
TSD: Wall Street has historically been a major draw for graduates of universities like Stanford. Is it still the place for the best and the brightest?
AS: The question is whether the best and the brightest go there now. You could argue that the best and the brightest right now are trying to find their way here, to Silicon Valley. I wouldn’t dissuade someone from going to work on Wall Street. The question is what is their motivation for going to work on Wall Street? My hope is that the people who go to work in Silicon Valley go because they love engineering and they love to create greater consumer experiences and all that, and I would hope that the people who are going to Wall Street are doing it because they have a passion for finance and because they want to find ways to power the economy.
The financial incentives that come with both going to the Valley and going to Wall Street, I would hope would be secondary. If you have a true passion for it, that’s a great thing. Obviously the money is a draw for everybody, so it’s sort of a matter of why you’re going.
TSD: Much of the political dialogue in recent years — from Occupy Wall Street to the Tea Party — seems to be based on a flawed understanding of how the financial system actually works. Do we collectively need greater awareness?
AS: The good news is that there’s probably greater financial literacy today than there ever was, partially as a result of the crisis — I guess you could call that a backwards silver lining. But there’s so much more work to be done. I don’t think that most people understand how it works, why it works, what all these decisions actually mean. One of my great worries is that the crisis has divided the country more than ever. Tim Geithner was just quoted — he had a great line — saying, “we saved the economy, but we lost the country.” To some degree, he’s probably right. The economy didn’t collapse completely, but in the process we created a real schism about us as Americans and equality and inequality and how we should be dealing with it.
TSD: Let’s turn to the next crisis. What form is it going to take, and when might it happen?
AS: If I knew, I wouldn’t be a journalist…There’s a big question mark about the commodities market. There are a number of big, private companies and we have no idea what’s going on. The great challenge of calling the next crisis is that you can say there’ll be a crisis but you’ll never know [exactly] what it’ll actually be.
I worry that we as a country and other countries — especially countries in some parts of Europe — could really be overleveraged. The thing I think we all really learned [in 2008] is that crisis doesn’t happen in years and months. It happens in hours and minutes and seconds. All that has to happen is that we’re no longer good for the money and everything changes.
This interview has been condensed and edited.
Please find coverage of Andrew Ross Sorkin’s speaker event here.
Please contact Marshall Watkins at mtwatkins “at” stanford “dot” edu.