Managerial economics-Ethics assignment - Movie Review Example

The movie Too Big to Fail follows the 2008 Wall Street crash and focuses on the events and actions of Treasury Secretary Henry Paulson played by William Hurt. It started with the bankruptcy of Bear Stearns, a smaller financial firm which was bailed out by the United States Congress. Then things take its ugly turn as Lehman Brothers’ shares, the fourth largest investment bank, is plummeting fast. The Treasury Department has to act in figuring out how to deal with the situation as all the companies are too interconnected where the failure of one will necessarily bring about the collapse of the others.

Advertising another bailout package to the people and Congress proves to be a long stretch as suspicion and unwillingness is reasonably a hard sell when it involves companies that eaned billions. While Paulson figures out how to fix the problem, trying hard as he can to resolve it within the private sector, corporations are out for their own interests leading to the inevitable fall of Lehman Brothers. Eventually, the corporation files for bankruptcy and the bigger problems are just starting for big names that include AIG.

This movie is ideal in understanding how the financial system in America works, not only that, it emphasizes on the interconnectivity of companies and even of governments that it is essential to appreciate that there must be mutual support instead of everyone only thinking for themselves. The role of managers can be seen to be the bridge that determines whether the company applies social responsibility or not. The relationship of businesses is important in building rapport and goodwill. In my own line of business importing and exporting goods, I find it true that the banks play a major role in the sustainability of trade.

I do business internationally where I have to deal with people of different nationalities including the laws that apply to each transaction. The ethical conduct of business is just as important as the business itself. There are a number of ethical dilemmas in the film. Paulson, as a former banker who made his millions in Goldman Sachs, knows how they think and how they will react. At times he had been suspected of advocating for his own interests though the same is not true. He sat down the CEOs to push them to buy and support Lehman Brothers, but Merrill Lynch’s John Thain secretly called to push for the purchase of shares in his own company instead of Lehman Brothers.

On the last part of the movie, Paulson managed to convince large banks to accept a nationalization policy where capital injection from the government will be given to them to be loaned in order to unfreeze credit. This was all done without any regulation and they trusted the banks to give people credit. As Michele Davis puts it, “They almost bring down the US economy as we know but we can’t put restrictions on how they spend the $125 billion we’re giving them because. they might not take it!

” (Fenelon, Levine, Weinstein & Hanson, 2011). In the movie, Paulson knew what Thain did but did not blame him for it. The banks gave out fewer loans and the market continued to struggle. After some time, a number of the banks paid back the TARP money to the government. Ultimately, the deregulation of the entire banking system brought about the rampant corruption within the industry where bankers are more concern of their staggering fees than the financial bubble they create. This remained unresolved and the government seemed more terrified of the consequences of even suggesting them because of how it may be perceived.

If I were in that position I will require close monitoring. The $700 billion bailout actually pushed through and the economy is still just recovering from the recession as the real estate market is just starting to improve. Given the position to do so, I initiate regulation and start with even just a few steps in order to supervise the Wall Street system. As a corporate officer, there must be recognition of social responsibility to do what is right especially when it involves the economy of an entire country.

When the Treasury Secretary asks reasonably for something that is within me and my company’s power to do, I will comply on the count of patriotic duty. BibliographyFenelon, C., Levine J., & Weinstein, P. (Producers), Hanson, C. (Director). (2011). Too Big to Fail [DVD]. United States: HBO Films.