In retrospect, after having spent two seasons with it, I realize I simply didn't understand the show back then, and this installment has improved a lot with repeated viewing.
Like most of Gotham's early episodes, despite essentially going by the police procedural format this episode is very fractured making it rather confusing to a stray viewer, which may in part explain why it rapidly lost so much of its initial viewer base.
The titular plot has Gordon and Bullock track a vigilante nicknamed "Balloonman", who targets corrupt Gotham citizens.
In the first side plot, Montoya and Allen look into Cobblepot's disappearance. When confronting Fish Mooney about it, she immediately snitches on Jim, since she thinks he's the one who pulled the trigger and she wants to hurt Falcone, and also implicates Carmine himself as the one giving the order.
Hearing this, Montoya confronts Barbara - evidently a former lover - with the information in a move as boneheaded as unprofessional, apparently hoping to drive a wedge between her and Jim.
Oswald himself returns to Gotham. He gets a job at Don Sal Maroni's restaurant - in a hilarious scene, killing one of the workers outside just to get proper shoes - and is befriended by Maroni himself, the arch rival of Carmine Falcone. Mooney orders her thugs to beat up and disfigure Falcone's lover Natalia in retaliation for Falcone's men brutally assaulting her former lover Lazlo. In passing conversations, both Carmine, Fish and Maroni make references to the "Arkham project", which is apparently under contention between the players. In the final moments of the episode, Oswald shows up at Jim's door.
In a third minor side plot, Selina Kyle takes Jim to the scene of the Wayne murders and proves to him that she was present at the time of the murder by showing him where the killer dropped the Waynes' wallet. After this, she manages to escape from his custody.
At the end Gordon realizes that the Balloonman is a social worker, Davis Lamond, who went crazy because of corrupt officials refusing to aid children on the streets. After apprehending him, Davis warns Gordon that "there will be more like me."
The first time I watched this episode two years ago, its symbolism was completely lost on me. The people the Balloonman goes after are people who believe themselves to be above the law and untouchable by the system - or perhaps rather beneficiaries of a system which only exists to serve them and rob the common people of everything - their jobs, their life savings, their housing, their sexual innocence, their pensions.
So, the Balloonman takes this metaphor literally, by physically strapping them to a weather balloon to have them elevated above all others as an object of ridicule, only to eventually fall to their death. What I thought of as "silly" was actually something elegant.
The other cool factor about the episode is that after all, the Balloonman is nobody special. He's just an angry, disillusioned middle-aged social worker. He's got no "superpowers" and he's not even particularly fit or healthy, almost failing to take out the police officer Bill Cranston despite the element of surprise. What the episode shows us is how, exactly as in real life, if society manages to push someone completely off the rails, any person can get dangerous.
Third and finally the most chilling part of the episode is at the end, when Gordon relates to Barbara what Davis had told him when he asked who was the target of the fifth balloon. "It doesn't matter. They're all guilty." This above all, along with the public taking to Balloonman like a hero, is what sells the episode by showing us what the people of Gotham really think about the "elite." It's a cesspool, like an infested Petri dish for predatory capitalism and organized crime.
It really paints a bleak future for the city. Show runner Bruno Heller has constantly referred to the city itself as "the real lead character of the show", and this episode gives it some much needed character development.
Notable character interactions:
Jim Gordon versus Harvey Bullock: It's the standard "good cop versus bad cop" or perhaps rather "crook versus straight guy" routine. Perfectly in character, Bullock has no problem with the Balloonman's extralegal activities as long as he only targets "criminals", but as soon as he goes after an equally corrupt police officer, he becomes a "job hazard." Mr Logue plays his role well and outshines his partner, the lead Ben McKeznie in every scene, though to be fair Ben doesn't have the most exciting of material to work with.
Bruce Wayne versus Alfred Pennyworth: In what will come to be their theme of much of the first season, Bruce and Alfred are holed up at the manor commenting on outside events. We have a significant discussion where on one hand, Bruce seems to express some sort of admiration for Davis's work, but on the other, "he killed people. That made him a criminal too." Yes, it's rather heavy-handed. It's supposed to be heavy-handed.
Fish Mooney versus Lazlo and herself: It's more of the same, really. If Fish could grow a mustache, she'd twirl it. After Fish realizes Lazlo has turned a bit jittery after his physical ordeal, she orders one of her goons to "get rid" of him - "not everyone's built for a beating like that." She's rapidly turning into a quite unlikable character. However, it's hard not to draw the parallel to Fish's treatment of Oswald, who clearly was "built for a beating like that," and in a way, that's a nice touch of writing.
Oswald Cobblepot versus Salvatore Maroni and others: The Penguin continues to be stellar . While he is every bit the cartoon villain Fish Mooney is, incredibly vicious and not even thinking twice about murdering people for any minor convenience, Robin sells his role with a tongue-in-cheek and nuanced humor and bravado completely absent from Jada Pinkett Smith's work.
He's lighting up every scene he's in, so much so that it's impossible to list them all. His wry smile when he steps off the bus in Gotham in the first moments of the installment, witnessing two street robberies, one police officer taking bribes from an elderly Asian storekeeper and some hookers selling sex to a man in a car all in ten seconds, uttering only one word, "home," practically makes the episode all by itself.
He's not stuck up, he's got no "honor" - he'll lie, cheat, kill, scheme and debase himself to any level in service of his goals. Of course, the extent of those goals are yet to be revealed.
Also, a special honorable mention to David Zayas, who seems tailor-made for the role of the brazen, bombastic Italian mobster boss Maroni.
While not a stellar episode by any means, this is an episode which lays a lot of groundwork for the show - the mentality of Gotham's citizens, the impotence of the legal system in the face of predators, and much more. In a childish way it also takes the very first step to set up Bruce Wayne's way to becoming Batman, but "in a childish way" is not meant as criticism - the Bruce Wayne of early season one is a child, even if he's a very smart one.
"You don't see what's coming, I do! Gotham needs me, I'm its future!"
"If you're its future, then Gotham is in big trouble."
"Yes. Yes, it is."