I watched “Inside Job” today. It’s a documentary by Charles Ferguson, narrated by Matt Damon, about the economic collapse of 2008 (and beyond) and what brought it about.
From the back of the DVD:
From filmmaker Charles Ferguson comes this sobering, Oscar-winning documentary that presents in comprehensive yet cogent detail the pervasive and deep-rooted corruption that led to the global economic meltdown of 2008. Through unflinching interviews with key financial insiders, politicos, journalists and academics, Ferguson paints a galling portrait of an unfettered financial system run amok — without accountability. Narrated by Matt Damon.
I don’t watch a lot of documentaries. Zero, really. This one caught my attention as a trailer on another DVD, so I put it in my Netflix queue and didn’t watch it for a month and a half after I got it. It’s been collecting dust for that long, at least.
I wish I’d watched it sooner.
The financial crisis is far from “too complicated for the average person to understand without a math degree,” as Greenspan put it. This film clearly and quickly lays out the necessary details without cluttering up the explanation, making it easily understandable just what happened, who was to blame, and more importantly, how the very people who brought this about ARE STILL IN POWER TODAY. Indeed, in some cases, even more powerful.
“The United States, for a 45-year period after the Great Depression, did not have a single financial crisis. The principle reason for that was the financial services industry was very tightly regulated. Those regulations were removed, progressively, beginning in the 1980’s, and beginning in the 1980’s the United States began having financial crises.”
– Charles Ferguson
See? Not hard to understand at all.
The film opens with a discussion about the rise and fall of Iceland’s economy, which, over a five-year period, functioned as a microcosm of what ended up happening to the world as a whole. The beginning of the end, as it were. The film then shifts to New York, and shows exactly who was responsible for what we experienced, where it started, what happened next, and where we are now.
It will scare you.
Did you know that most of the leading “academic” economists and professors from the top business schools in the country, including Harvard and Columbia, make as much as 80% of their annual incomes as board members or consultants for the very same companies that caused the global crisis?
And yet none of these schools require that their staff disclose in publications that they were paid by the people and companies that they are studying and subsequently give glowing reviews to. The deans and professors don’t see any conflict of interest there.
“Why should a financial engineer be paid 4 times to a hundred times more than a real engineer? A real engineer builds bridges; a financial engineer builds dreams. And when those dreams turn out to be nightmares, other people pay for it.”
– Andrew Sheng, Former Chairman of the Hong Kong Securities and Futures Commission
Before you go thinking this was a one-sided documentary targeting Republicans or Democrats or whatever, I should note that I was looking for just that kind of bias while I watched this. I didn’t find it. What I did find was a filmmaker who was determined to get at the truth, and didn’t let his interviewees off with standard meaningless answers. Democrat, Republican, Obama or Bush fan, no one was spared a close look in this film.
Perhaps that’s why so many of the people responsible for this mess declined to be interviewed for the film. The same people who are still in power.
“For decades, the American financial system was stable and safe; but then something changed. The financial industry turned its back on society, corrupted our political system and plunged the world economy into crisis. At enormous cost, we’ve avoided disaster, and are recovering.
But the men and institutions that caused the crisis are still in power, and that needs to change. They will tell us that we need them, and that what we do is too complicated for us to understand. They will tell us it won’t happen again. They’ll spend billions fighting reform. It won’t be easy.
But some things are worth fighting for.
You need to watch this movie, if for no other reason than to understand exactly what happened and who caused it. Whether you agree with what ultimately comes next is up to you, but don’t assume you know everything about what happened. Take 108 minutes out of your life and learn something.
Then you’ll be as pissed off and scared as I am.
I haven’t seen this documentary but I will.
However, I think there was quite a bit of self-delusion involved in this market crash, inside and outside Wall Street, and that’s not to excuse what happened, but it’s an important part of the whole picture.
There’s value to be learned in the details, which are complicated. Some say that the crash was made much worse by a big pig-headed decision at the Treasury, namely to let Lehman fail. No one knows what would have happened if it had been different.
But the point about banking regulation is dead right, and the regulations we once had were dismantled in a very bipartisan way. And this is the key point. We cannot undo what was done but we can — in partisan or nonpartisan way — do something to prevent it from happening again: reregulate.