Bad Economics 101
Charles Ferguson’s Inside Job, filled with interviews and graphic illustrations and narrated by Matt Damon, is a documentary film that describes and analyzes the world financial crisis, its roots, its key events, and prospects for the future. Anyone who saw Ferguson’s 2007 No End in Sight, about the lack of planning behind the US 2003 invasion of Iraq, will expect a clear, incisive, devastating account, and that’s what we get. Ferguson has established himself, along with Errol Morris of The Fog of War, Alex Gibney of Taxi to the Dark Side, Adam Curtis of The Power of Nightmares, the team of Mark Achbar and Jennifer Abbott of The Corporation and a very few others, among the best of the new investigative political filmmakers who lay out a large, controversial topic for us in terms so compelling and lucid that the result becomes a definitive film statement.
Some of these films might not have gotten as widely seen, or perhaps even made, without the influence of Michael Moore since his Bowling for Columbine won the big prize at Cannes, but they have a different approach. In his Capitalism: A Love Story Moore uses his by now somewhat tired shtick of bearding participants at the gates, asking them to explain what a credit default swap is, just to suggest the ordinary guy doesn’t know what all this stuff means. Inside Job is for smart people who want to become a little smarter, so while it subtly confronts many of those complicit in the financial meltdown in interviews, it doesn’t throw up its hands about the complexity of it all but instead sets out to help us understand. The film simply explains what credit default swaps are, as well as other things like derivatives, collateralized debt obligations, predatory loan practices, subprime mortgages and other financial terms that enable us to understand historically how the financial system post-Reagan became more and more able to feed on itself, deriving greater and greater profit even from the unwisdom and illegality (in classic terms) of its transactions, turning the entire world economy essentially into one big Ponzi scheme, till the collapse of the housing bubble brought the investment banks and the world’s economies to the brink of disaster.
Ferguson, whose team assembled a wealth of material and who’s said his two editors, Chad Beck and Adam Bolt, performed a more complex than usual function to make sense of it all, begins with an account of Iceland, a whole country that went under because it chose to privatize its main banks and deregulate investment. Iceland got so quickly and thoroughly into the Ponzi scheme its deregulated banks borrowed a total worth ten times the GNP of the country, and for its size as a country Iceland’s banking collapse is the largest in history so it’s a nice (using the word in neutral terms) illustration of the situation which in the USA makes us think more of tent cities of people who lost their homes with unemployment and predatory loan practices and of CEO’s belonging to the richest tenth of a percent of a country in history who paid themselves multimillion-dollar or billion-dollar bonuses after the 2008 collapse.
Beck and Bolt and Ferguson have organized Inside Job so tightly it’s hard to summarize but we can note some points of special interest. There are several devastating interviews with economics professors (Glen Hubbard, Frederic Mishkin) whose involvement in government and consulting makes their teaching suspect (the point is the universities are part of the problem: they taught that all the dangerous practices were good). These guys fall apart on camera and these interviews are coups. Certain people we don’t know, like Lee Hsien Loong, current president of Singapore and Charles Morris, author of The Trillian Dollar Meltdown, show unusual wisdom. There are experts who warned us, like financier George Soros, economist Nouriel Roubini, and Allan Sloan of Fortune magazine. New York ex-governor Eliot Spitzer persecuted wrongdoers before his own high-roller pleasures forced him to resign. Speaking of which, there are details about Wall Street’s involvement in drugs and prostitution, and Kristin Davis, a madam whose home base was blocks away from the big financial houses, explains how her girls’ very expensive services were billed to the companies, and investigators didn’t want to know the details. A shrink who services the CEO’s attests that these sleazy pursuits are favored right up to the top.
Which brings us to the final, sad story: where we are now. Of course the financial markets were saved but average Americans paid for it, and millions lost their homes, and the 1999 Glamm-Leach-Bliley Act that repealed the Glass-Steagall Act and allowed banks to be investment banks, commercial banks, or insurance companies simultaneously, thus endangering everybody’s money — we’re still stuck with that. Why? Because the Obama presidency is “a Wall Street administration.” Obama brought back key players in the crisis to mind the store, Geitner Treasury Secretary, Summers director of the NEC, reappoints Bernanke as chairman of the Fed, and appoints many Wall Street executives to senior regulatory and economic policy positions. Guess what? With that setup nothing is essentially going to change.
Ferguson’s film has an elegant restraint. Note the title, however, which denotes crime. It is not implicit but explicit that the financial world is manned by well-dressed and enormously overpaid criminals, whose errors we are all paying for, even as they are richly reworded for committing them.
The San Francisco-born Ferguson has a BA in math from UC Berkeley and a Ph.D. in political science from MIT. He has been a consultant to government and the high tech industry, founded a software company he sold to Microsoft, spent several years as a senior fellow at the Brookings Institution and a visiting lecturer at MIT and UC Berkeley. Then he became a filmmaker. Let’s hope he remains one.
Seen and reviewed as part of the New York Film Festival at Lincoln Center with public screenings of the film Oct. 1 and 4, 2010. Sony Classics release. Limited US theatrical release begins Oct. 8 (New York) and Oct. 15 (Los Angeles). The DVD will be of particular value because some of the wealth of additional material can be made available in that format. At the Q&A Ferguson wished he could have included more of the many interviews, and the press kit includes photos with brief bios of 35 people, pages of glossary, and a six-part time-line. It’s a keeper.
DIRECTOR: CHARLES FERGUSON
WRITER: CHAD BECK, ADAM BOLT
CAST: MATT DAMON (NARRATOR)