Why 'Big Short' Director and Democratic Donor Adam McKay Is Disappointed in Obama
"You're putting the economy in jeopardy by not putting these bankers in jail because it means they're going to do more of it."
The Big Short director Adam McKay, one of Hollywood's most reliable Democrat donors who has given millions to candidates and causes, is disappointed in president Barack Obama.
Before helming the star-studded financial drama about the credit and housing fallout of the mid-2000s, McKay stumped for Obama in 2008, helping the candidate ride outrage over the financial collapse and government bailout into the White House, only to see the Obama administration refuse to prosecute the architects of the implosion.
"Oh, heck yeah," McKay said of his disappointment in Obama during The Hollywood Reporter's roundtable interview, also with Steve Carell, Christian Bale, Ryan Gosling and author Michael Lewis. "They whiffed on that. They really made a bad call. There's this talk in D.C. that if you put these bankers in jail, you're putting the economy in jeopardy. No, you're putting the economy in jeopardy by not putting these bankers in jail because it means they're going to do more of it."
He continued, "There is no question they had to do the bailout, but it's just the conditions of the bailout and the fact that we even got there. Obama came in, and he didn't prosecute anyone. His Department of Justice guy [former Attorney General Eric Holder] worked for a law firm [Covington & Burling] that represented a bunch of the big banks. And now he's back working for that [firm]! So I thought that was a travesty."
So who should have been prosecuted? "For sure the shell CDO [collateralized debt obligation] companies that those banks set up, I thought that was flagrant fraud. They would create these fake companies over in Jersey and just feed 'em all the tranches [groups of bad loans] that they couldn't sell. That's just flagrantly illegal. I also think the ratings agencies [did not do] any due diligence, just taking those fees. Because, you know, they all went public. They have to keep their stock up. Those were really flagrant."
McKay noted that retribution won't come from any current GOP candidate, though. "It's really about Congress, not so much the president. You could fix this in a week. It's not hard, like have a clearinghouse for derivatives; you can see what's being traded, where the risk is going. Bring back a new version of Glass-Steagall [the law that separated investment and commercial banks, repealed in the 1990s], have a transaction tax and then four other things Michael could say, too."
Read the full Big Short interview here, and watch more roundtables on Close Up With The Hollywood Reporter this season on Sundance TV, beginning Sunday, Dec. 13, at 11 a.m. ET.
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