Andrew Ross Sorkin on the financial crisis

An interview with the Samuel Johnson Prize-shortlisted author.

This year's shortlist for the Samuel Johnson non-fiction book prize has been announced. Among the nominations is Too Big to Fail, an account of the collapse of Lehman Brothers by the New York Times journalist Andrew Ross Sorkin. Republished below is Jonathan Derbyshire's 2009 interview with the author -- and you can read Paul Mason's review of the book here.

Too Big to Fail is based on remarkable access to the main players in the financial crisis.

It's very important that the reader is able to see what these people thought and said to each other during this calamitous period. And I think that when you get in the room with them and you get to hear what they were thinking, there are moments where you'll wince and cringe and, in some cases, get immensely frustrated with them. There are very few heroes in this book.

Those involved seemed to sleepwalk towards catastrophe. Why was that?

It's a story of greed, at some level. And it's a story of hubris. It's about a grab for power. I actually think that, in the end, the dollar figure is not necessarily the motivating force. The money is almost a scorecard for everything else. When you see these people in their moments of panic, I'm sure they're thinking about their wallets, but they're also thinking about the power that they have. We talk about institutions that are too big to fail -- I think the story is as much about people who think they are too big to fail.

You argue that Dick Fuld, chief executive of Lehman Brothers, was driven much less by greed than some of the other main players.

Dick Fuld has been villainised, but in the context of this book, he's more of a tragic figure. Remember, Fuld had a billion dollars of stock in the company -- he had more skin in the game than anyone else in the world. And yet he rides it down to $65,000. What does that say? I don't know. And I wouldn't say I'm sympathetic with him per se, but the reason I suggest he's a tragic figure is that there's a big likelihood that we'd have villainised every other CEO had the government not saved them.

Fuld blamed the collapse of Lehman on short-selling. Was he right to do so?

It's very hard to blame the short-sellers for this debacle. There's no question that they exacerbated the problem but, in many ways, there were good reasons to short stocks and I don't think that was what put pressure on these companies. Look at the hedge-fund manager David Einhorn: he saw the writing on the wall earlier and better than most other people. It's the people who have an incentive to find the problem who usually find the problem.

You appear to credit the former treasury secretary Hank Paulson, and his successor, Timothy Geithner, with having foreseen the disaster.

You have all these people who see the train barrelling down the track. And yet they still don't completely get out of the way. You can give them credit for having spotted the train -- that's great. But do I think they mitigated the disaster? Well, that's a larger question. It's hard to argue that they didn't bring us to the brink. But you could also argue that they took us back from the brink. So, for me, it's a much more mixed record. You can't simply credit these people with having foreseen the disaster. You can give Paulson credit for talking about the need for a resolution authority, which he did in June 2008. Tim Geithner is someone else who seemed to be talking about this a lot. But as for actually doing something -- that's another matter.

What about the wider historical context to the crash of 2008?

Many of the seeds of the debacle were sown ten years ago, with some of the issues around monetary policy, sub-prime mortgages, deregulation, the lowering of capital requirements at banks -- all of those things contributed to this. So by the time my book begins, many of the problems are already baked in. What you're watching here is people at the moment of emergency. I originally thought the book would just cover September 2008. But once I started doing the reporting, I realised that the treasury was trying to orchestrate a deal for Lehman with Barclays as early as the spring. It made me rethink the scope and narrative arc of the book.

And politics matters, doesn't it? The repeal of the Glass-Steagall Act in 1999, for example, was crucial.

The repeal of Glass-Steagall allowed the casino to be attached to the bank. Expanding home ownership exacerbated the problem. As did the decision to keep interest rates low for long periods of time. So you have the regulators clearly not minding the store and Wall Street taking advantage of rules that aren't properly enforced.

Andrew Ross Sorkin, the author of "Too Big to Fail", is the chief mergers and acquisitions reporter for the New York Times

Daniel Trilling is the Editor of New Humanist magazine. He was formerly an Assistant Editor at the New Statesman.

Davide Restivo at Wikimedia Commons
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Scientists have finally said it: alcohol causes cancer

Enough of "linked" and "attributable": a new paper concludes that alcohol directly causes seven types of cancer.

I don't blame you if you switch off completely at the words "causes cancer". If you pay attention to certain publications, everything from sunbeds, to fish, to not getting enough sun, can all cause cancer. But this time, it's worth listening.

The journal Addiction has published a paper that makes a simple, yet startling, claim: 

"Evidence can support the judgement that alcohol causes cancer of the oropharynx [part of the throat], larynx, oesophagus, liver, colon, rectum and [female] breast"

So what's especially significant about this? 

First, scientists, unlike journalists, are very wary of the word "causes". It's hard to ever prove that one action directly led to another, rather than that both happened to occur within the same scenario. And yet Jennie Connor, author of the paper and professor in the Preventive and Social Medicine department at the University of Otago, New Zealand, has taken the leap.

Second, alcohol not only causes cancer of one kind – the evidence supports the claim that it causes cancer at seven different sites in our bodies. There was weaker evidence that it may also cause skin, prostate and pancreatic cancer, while the link between mouth cancers and alcohol consumption was the strongest. 

What did we know about alcohol and cancer before?

Many, many studies have "linked" cancer to alcohol, or argued that some cases may be "attributable" to alcohol consumption. 

This paper loooks back over a decade's worth of research into alcohol and cancer, and Connor concludes that all this evidence, taken together, proves that alcohol "increases the incidence of [cancer] in the population".

However, as Connor notes in her paper, "alcohol’s causal role is perceived to be more complex than tobacco's", partly because we still don't know exactly how alcohol causes cancer at these sites. Yet she argues that the evidence alone is enough to prove the cause, even if we don't know exactly how the "biologial mechanisms" work. 

Does this mean that drinking = cancer, then?

No. A causal link doesn't mean one thing always leads to the other. Also, cancer in these seven sites was shown to have what's called a "dose-response" relationship, which means the more you drink, the more you increase your chances of cancer.

On the bright side, scientists have also found that if you stop drinking altogether, you can reduce your chances back down again.

Are moderate drinkers off the hook?

Nope. Rather devastatingly, Connor notes that moderate drinkers bear a "considerable" portion of the cancer risk, and that targeting only heavy drinkers with alcohol risk reduction campaigns would have "limited" impact. 

What does this mean for public health? 

This is the tricky bit. In the paper, Connor points out that, given what we know about lung cancer and tobacco, the general advice is simply not to smoke. Now, a strong link proven over years of research may suggest the same about drinking, an activity society views as a bit risky but generally harmless.

Yet in 2012, it's estimated that alcohol-attributable cancers killed half a million people, which made up 5.8 per cent of cancer deaths worldwide. As we better understand the links between the two, it's possible that this proportion may turn out to be a lot higher. 

As she was doing the research, Connor commented:

"We've grown up with thinking cancer is very mysterious, we don't know what causes it and it's frightening, so to think that something as ordinary as drinking is associated with cancer I think is quite difficult."

What do we do now?

Drink less. The one semi-silver lining in the study is that the quantity of alcohol you consume has a real bearing on your risk of developing these cancers. 

On a wider scale, it looks like we need to recalibrate society's perspective on drinking. Drug campaigners have long pointed out that alcohol, while legal, is one of the most toxic and harmful drugs available  an argument that this study will bolster.

In January, England's chief medical officer Sally Davies introduced some of the strictest guidelines on alcohol consumption in the world, and later shocked a parliamentary hearing by saying that drinking could cause breast cancer.

"I would like people to take their choice knowing the issues," she told the hearing, "And do as I do when I reach for my glass of wine and think... do I want to raise my risk of breast cancer?"

Now, it's beginning to look like she was ahead of the curve. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.