Richard Thaler, a Booth School professor, and Adam Davidson (A.B. ’92) both lent their economic expertise to the recently Oscar-nominated film, The Big Short. Davidson, a journalist who covers global economics for NPR, is best known as the co-founder of Planet Money and acted as a technical advisor to the film throughout the production process. Thaler, who studies behavioral economics and the psychology of decision-making, made a cameo in the film to explain collateralized debt obligations alongside Selena Gomez. The Chicago Maroon recently caught up with Davidson over the phone and Thaler by e-mail to discuss filming, working with director Adam McKay, and explaining difficult financial concepts to the general public.
Chicago Maroon: Who approached you about being in the movie? What was your initial reaction?
Richard Thaler: I was approached by U of C grad Adam Davidson of Planet Money who was serving as technical advisor to the movie. My initial reaction was, are you sure you have the right phone number?
CM: What do you think about the movie’s overall concept of using celebrities to explain complex economic concepts? Do you think it was effective?
RT: I am not an unbiased judge but I think it worked great. Loved the other two. The Anthony Bourdain metaphor was particularly apt.
CM: What was the actual filming process like?
RT: We shot it in one day at Harrah’s casino in New Orleans, where most of the film was shot. Adam McKay is very improvisational which was good because I was lousy at learning lines. After a few takes he let me just say whatever I thought was appropriate. I don’t think any of the lines that appear in the movie were in the original script. McKay and I had dinner the night before the shoot and worked on the scene to try to get the economics right.
CM: How did Selena Gomez learn about collateralized debt obligations? What was it like to work with her?
RT: She (unlike me) was very professional. She learned her lines and was accommodating to her amateur partner. (However, she did not know anything about blackjack. I had to explain to her that 21 wins. I guess she has not been old enough to gamble for long.)
CM: Have you seen the finished movie? If so, what was it like to see yourself on the big screen?
RT: Yes, my wife and I were invited to the premiere, which was the first time I saw any of the film. Our scene comes on suddenly so I was surprised to see myself. Also, the first image you see is of me laughing at something. That was clearly shot between takes. They didn’t tell me that the cameras were always running!
CM: Do you have any plans to further your Hollywood career?
RT: As Michael Lewis, the author of The Big Short and a friend of mine, said to me at the movie premiere: “You better enjoy this. It is a once in a lifetime experience.” I think he is telling me something. I plan to stick to my day job.
Chicago Maroon: Why did you choose Richard Thaler to be in The Big Short?
Adam Davidson: I mean honestly, he ended up being the only guy that would make sense. We wanted a really top-level economist that brings that kind of gravitas and has something to say that’s relevant, but we also wanted someone who had a sense of humor and a sense of performance and would be fun to work with…I studied everybody we could think of and Dick [Thaler] was the obvious answer. He rang all the bells very clearly.
CM: A lot of the other cameos were made by celebrities. Why was it important to have a top-level economist in the film?
AD: It was Adam McKay’s idea to do it and I don’t want to speak for him, but that being said, I’ll speak for him…or my sense of what he wanted. In my mind, what I find exciting about this movie is that it’s kind of doing a few things at the same time. It’s communicating that, you know, this crisis is really important and really worth spending some time understanding, and…that the crisis can be understood. Lay people can understand it, it’s not as confusing as people say…it is worth your time to pay attention to what the brightest minds say.
Contrasting Selena Gomez…and Dick Thaler, was sort of hitting on both those buttons. This whole universe of substantive, deep thinking about our economic system really can live in the same universe where celebrity culture and pop news lives…. I feel like you get that all in one shot when you see Dick and Selena together. Selena is saying smart things and she worked at it and she was excited by this opportunity…. That being said, we did have to explain to Dick who Selena Gomez was and we did have to explain to Selena who Dick was.
CM: I know you also did “The Giant Pool of Money” (an episode of the radio program This American Life on NPR), which was also focused on explaining the financial crisis to lay audiences. How was that similar or different from the way The Big Short sought to explain the crisis?
AD: A lot of it felt really similar, which was sitting in a room with smart, creative people and thinking, what should people know? What’s interesting, what’s funny, what’s weird, what’s compelling about this crisis? Both shared a view that our job was not to dumb down, it was not to dress it up in silly games, but it was to take the actual content of the crisis and find what’s fascinating there, to respect viewers/listeners and engage them on that level.
For me, personally, audio is a narrative medium where you’re talking all the time, so learning to tell a story through visuals was a very different experience and it was very exciting for me to do that. Also, “The Giant Pool of Money” sort of had to earn its place in the world, you know, in a different way, [than] when you’re bringing in Ryan Gosling, Brad Pitt, and Selena Gomez. People pay attention in a different way.
And…when I’m writing for The New York Times or doing stuff for NPR, that is a self-selecting audience of people who, they might not understand the financial crisis, but they’re actively pursuing news and information about the world. And we know that many Americans don’t. Trying to engage people who are not active, avid consumers of complex news and information…is a different challenge. But [the two experiences] are definitely way more similar than they are different.
CM: What was the timeline of your involvement with The Big Short as a technical advisor?
AD: I was very involved as McKay began writing the script. Charles Randolph wrote the original script and McKay started working on it…about two years ago and I was very involved in that process. A lot of that was just talking through what was the cause of the financial crisis, what all these weird financial instruments mean, that was a big part of my work…. But also what was very fun was thinking through the emotion of the financial stuff—what were the characters seeing that nobody else was seeing, why was it that they were able to see it when other people couldn’t see it.
So, anyway, all of that…was pre-movie…and then on set, I was maybe on set like half the time…. Some of it was explaining to the actors, talking them through what their lines mean, talking to McKay about lines…I don’t want to overstate my role, I was one of hundreds of people involved, but that was really fun for me.
CM: Why was it so important for the movie to get the technical details correct? Why was it important for the actors to understand what they’re saying?
AD: It works on several levels. One level is just, I think, when I see the movie, there’s just a deep credibility that you feel. It just feels richly layered. And part of that was…I worked very closely with the set designers and set decorators making sure the random pieces of paper on people’s desks were the accurate kind of pieces of paper that those people would actually have. I worked a lot on the computer screens so the computer screens were really showing the kind of stuff that would be on that person’s desk. And you could easily have random computer stuff and random pieces of paper, and I’m [not] sure any of the viewers even noticed, but…it gave the crew and the cast and Adam McKay a feeling like we are not pretending, this is the office of these people, and just made it a little easier to enter that world. I think that does come across.
And for the actors themselves…it’s like if you were playing a part in Russian or something. There’s these lines that don’t actually make sense in the English language and understanding what those lines are and what they mean can be helpful. It adds a richness to the overall experience for them.
CM: Your bio at NPR says you studied the history of religion at UChicago. So how did you get from there to financial journalism? Is there something about these topics that particularly drew you in?
AD: Since this is for the University of Chicago, the specific program was Religion and the Humanities. I just say history of religion because no one knows what Religion and the Humanities is…Jonathan Z. Smith who was my main professor in the department…had a huge impact on how I see the world.
I’m actually finding in my mid-40s I’m having a second wave of realizing how important him in particular and Chicago in general were in shaping how I think and how I understand the world and how I do my work and I would say the impact is really profound and I feel it more now than ever.
I think there were a bunch of things I got from that program that were unbelievably helpful. One thing is just the general University of Chicago thing of approaching arguments with a skeptical…how do I put it…you don’t just accept authority for arguments, you don’t just assume that the argument is right because other people believe it. You hear an argument and you instantly go to work kind of dissecting it and trying to figure out, does this argument make sense? Do I agree with it? What is it based on? And I think that is really, really helpful.
A lot of economics and finances exists as an implicit appeal to authority and ignorance. There is somebody who is communicating either explicitly or implicitly, “Hey, you don’t understand this stuff, but we know all this stuff.” And I think that’s a very non-U of C thing. U of C really teaches you to bring a critical eye to any argument and be skeptical and to not have respect just because someone is the president of a bank or has a Ph.D. in economics. And that’s just a general thing, whatever you major in at the University of Chicago.
A specific thing I got from the program…. It was called Religion and the Humanities, but I would call it more like Worldview Studies. It was a course on how people construct their view of the world… and with a very U of C understanding that our view of the world is contingent on our particular culture, on our particular experiences, it’s an active process of constructing understanding.
Economics can be presented as fact and it was really helpful to think that is not accurate. Economics is… a worldview that was constructed by a group of people both consciously and subconsciously over a long time and has all sorts of assumptions that aren’t necessarily “accurate.”
It’s a belief system…. It can be a good belief system. I don’t mean to say it’s just arbitrary and ridiculous. Science is a belief system. But to sort of see the construction of an entire worldview rather than assume there are people who know the “truth” and people who don’t know the “truth”…that is my long-winded explanation of how Jonathan Smith made me a better financial reporter without ever discussing finance.
I mean I have all the usual complaints. I didn’t have a lot of fun in college, I have all the standard U of C complaints, but I definitely say, more than ever in my life, I am very aware of how helpful my U of C education was. It very much made me the person I am today…. In 20 years you’ll realize it was worthwhile.