Inside Job

This year's Academy Award documentary feature, 'Inside Job,' is a must-see film. For a topic as broad and catastrophic as global financial meltdown, the film does an admirable job of fitting in as much detail as it can about the pervading ideology that preconditioned the crisis and who the guilty parties are.

'Inside Job,' is an accurate although necessarily incomplete description of what took place. Those in positions of great power abused their authority for reasons including - but not limited to - ideology, ignorance and greed. Unfortunately, the phrase 'inside job' contains connotations that may turn some away from the film for fear it is a conspiratorial screed or a partisan hit piece.  It is not.  It should be required viewing in every home, every classroom, and every board room.

Ferguson's film is not docu-tainment.  It is a well researched, well paced, well visualized overview of what happens when deregulation runs amok.  It aims an especially critical eye toward high risk sub-prime mortgages and CDOs, and the lenders, investment firms, rating agencies, traders and speculators who took all advantage of them to create wealth that did not in fact exist.  Ferguson posits, quite plausibly, that through a series of convoluted financial instruments designed to maximize the flow of money in response to the performance of a CDO, regardless of whether it performed or tanked, the financial industry essentially became unable to regulate itself.  This self-regulation is the cornerstone of what justifies the sort of madness unleashed on Wall Street in the 1980's and it's clearly a system results in instability and inequality on an alarming scale.

'Inside Job' also discusses the housing crisis in great detail, and the way mortage brokers were encouraged to sell as many high risk predatory loans to maximize their returns.  It has been argued that the victims were too ignorant to understand what they were signing, but it's clear many of these predatory loans were sold, packaged, framed and presented in a misleading way that at very least constituted fraud.  That they were even allowed and encouraged in the first place is at least unethical.

I particularly liked the way the filmmaker, Charles Ferguson, sets his sights on the 'academic economists.'  These guys really are the bread and butter of the insurgence of prevailing ideologies on Wall Street and in the mainstream media that have gone unnoticed for so long.  These academic economists themselves have largely gone under the radar because their ties to academia shield them from the rancor usually reserved for politicians and bankers. These academics craft and push policy. They shape world views about deregulation that become de facto wisdom trickling down through trade papers, journals, and finally, legislation. I have to admit that part of the satisfaction of watching 'Inside Job' is watching these slimy, self interested ideologues squirm in their seats.

Some critics have posited the film doesn't go into enough detail, leaving out larges areas of information about the sub-prime fiasco, and putting vital information aside about people with key roles in bringing down the house of cards.  I've heard the film does take a multitude of economic factors into account and presents a slanted or biased view of what happened.  My response to these criticisms is incredulity.  The critics are wrong.  'Inside Job' lays out as much as a film of this scope can without being burdening the weight of the narrative and becoming a labyrinthine maze of segues and sidebars.  It's the clearest picture you're going to get about what happened and why.

Of the four administrations profiled in the film, Obama's comes out with the most egg on its face.  The broad dismantling of regulations under the Clinton Administration is not remotely ignored, either.  This is not a partisan film, and its only agenda is getting to the truth of what happened and treating this issue with the appropriate gravity.  The Administration's primarily flaw emerges in stark detail: Obama's over-reliance on ideologues, academics, policy wonks and insiders from the same Washington circles to craft policy.  I think there was a fear inside Obama's circle that diversifying the Administration with real outsiders beltway might have devalued their decisions with accusations of an inexperienced Administration.  His insistence on hiring many Clinton era holdovers unfortunately compounded a problem that arguably began in earnest under Clinton in the 90's, in regards to deregulation policy and trade/globalization matters.

If anything, the economic disaster - the bankruptcies, the recession, resulting unemployment and all that followed - has been treated with kid gloves by most of the major news publications, particularly that purported bastion of beltway objectivity, NPR.  The very people kept in power by Obama's administration are the ones who not only presided over this mess, but the people who helped craft the conditions that led us there in the first place.  These Washington insiders are still in power, crafting public opinion and policy.  They infest the think tanks and consultation groups, and their influence seeps into the coverage you get on any given day.  This is why despite the vague sense of outrage and confusion about what happened, despite us being over two years into Obama's first term, the American people still feel very much in the dark about what happened and are still scratching their heads about where their money went, and why there haven't been prosecutions.

'Inside Job' addresses these issues head-on.  It addresses them in a clear, sane, rational, educated way, without resorting to name calling or snarky attacks.  It provokes outrage the right way - by introducing information from many different sources, compiling it, and then questioning people close to the problem.

As with any issue this volatile, there are always other sides to the story.  Just one example: it's true that Wells Fargo initially refused bailout money, claiming it was just fine without it, but the truth is, even the solvent banks don't exist in a vacuum (follow the link for the particulars of that meeting to understand why the Fed forced Wells Fargo's hand on that particular issue).  'Inside Job' doesn't even try to address the individual banks' responses to the bailout, but I think only minutiae obsessed wonks are going to take issue with Ferguson and his attempt to distill this issue into something cogent.  For the rest of us - everyday Americans who still feel confused and betrayed and outraged at much of this - the film is a powerfully persuasive alarm call.


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