Charles Ferguson is a man I'd love to sit down and have a conversation with. The former political scientist first waded into the waters of documentary film with his brilliant Iraq War doc, 2007's Oscar-nominated No End in Sight. He's a filmmaker that absorbs himself in… More
Charles Ferguson is a man I'd love to sit down and have a conversation with. The former political scientist first waded into the waters of documentary film with his brilliant Iraq War doc, 2007's Oscar-nominated No End in Sight. He's a filmmaker that absorbs himself in the comfort of clear logic and facts. Now he takes that same rigorous and analytical eye to the story of our generation, the worldwide financial meltdown from the fall of 2008. The global event eliminated trillions in money, millions in jobs, and still confounds thousands of us. If you don't leave Inside Job absolutely infuriated, then you weren't paying close enough attention.
Just like he did with No End in Sight, Ferguson lays out his case with clear-eyed precision. He doesn't rely on ad homonym attacks, a la a Michael Moore's myopic Capitalism: A Love Story; he lets the facts do the talking, and as presented they are damning. Inside Job sounds like the title of a heist movie and that's exactly what was propagated on the world stage. This is a wholesale plundering brought about by unchecked avarice, greed, and hubris. I've been waiting since the financial collapse for a filmmaker to produce an authoritative step-by-step document that could meet out deserved blame and scorn, while presenting complex mathematical calculations in layman's terms. This is that movie. Ferguson has crafted a definitive synopsis of the 2008 global meltdown that is scarier than any horror movie Hollywood could churn out.
When you learn about the forces that led this country into economic disaster, you begin to realize that it all centers on the old Gordon Gekko pronouncement that "greed is good." I've never fully understood how capitalism is somehow absolved of any sin or that free markets are the same thing as democracy. Somehow the screwy idea that business would behave if nobody were watching became an intractable ideology. The Reagan revolution of the 1980s brought with it deregulated markets and lax oversight, which has brought waves of financial scandals that have only led to bigger consequences (Savings and Loan to Enron to the 2008 collapse). With the dense derivatives market, the financial industry found new tools to manufacture money at alarming rates. Rather than betting on simple stocks, investors could now bet on anything. Derivatives helped turn the entire world into one large casino. Short-term profits became the total goal and risk became just another four-letter word. Just like the insightful 2005 doc Enron: The Smartest Guys in the Room, these events are not stories about math, they're stories about people. You don't have to know a CDO from a CFO. It's the unchecked hubris of men and women, but mostly men, and the slippery slope of business when the only protectors for the consumer is getting paid by Wall Street profits.
But all those greedy bankers and CEOs were not alone. Days before the several lending firms went bust, their ratings were stick in the AAA to AA range, the same rating as a U.S. bond, meaning non-existent risk. The ratings industry got used to big paychecks dependant upon the number of high-quality ratings they passed out. As one interview puts it, if a New York Times journalist was offered $5000 to write a positive story and zero to pen a negative one, what do you believe the outcome would be? Insurance companies, notably AIG, were gambling with all that collateralized debt, betting that it wouldn't get paid off. This allowed companies to sell loans they knew were poor and bet against them. The systems of regulation, like the Fed and the SEC, were ridiculously negligent at best and criminally complicit at worst. Rather than investigate and prosecute, regulation officers sat on their hands, relying on an ironclad belief that the industry knew best. Congress passed a law in 2000 that prohibited government from regulating the derivatives market. Then in 2004 the regulatory bodies decided to relax requirements for capital reserves. This meant that banks could take on even more borrowed assets, leveraging greater debt (ratios of capital to borrowed capital went from 3:1 to as high as 30:1). Both of these regulatory omissions allowed Wall Street to gamble even bigger. Don't forget that many of those high-ranking officials meant to operate as referees had been former employees of large financial firms. It all became an incestuous boys club that looked out for its own interests. Why haven't there been any prosecutions even concerning the drugs and hookers? It seems that the only people who get prosecuted for their vices are the ones fighting for reform, like former New York governor Eliot Spitzer (he gets his own doc this fall too). The collusion amongst the financial sector, regulators, and legislators is staggering.
To Ferguson's credit, he lays out a sober and exacting analysis of the mess. This cannot be dismissed as some sort of partisan hatchet job unlike a Michael Moore production. Like it or not, Moore has become a caricature of himself and his dubious sleight-of-hand practices hurt the merits of his message. Ferguson, on the other hand, is a reasonable fella who assembles a crack team of experts and officials, the people directly involved with the financial meltdown. Several big names like Alan Greenspan and Larry Summers declined to be interviewed, lest they have to atone for their actual culpability (Summers is getting slammed twice this fall, after his irritable appearance in The Social Network as the dean of Harvard). Ferguson serves as an intelligent inquisitor, ready and willing to challenge his subjects when they try and hide between weak rationalizations or inaccurate facts. Inside Job plays a serious subject fairly seriously. There are no easy gags or frivolous attempts at comedic relief, despite some ironic usage of pop songs. Ferguson makes use of several unsophisticated charts and graphs to help grasp the explosive rise in profits and debt. They aren't fancy graphics, in fact most are red bar graphs you'd find in a junior high report. But Fetguson's great asset is his collection of key participants. Inside Job isn't much more than a talking heads piece with a smattering of visual aids and narrative elucidation. But when your subject is no less than the financial state of the world, you'll be forgiven for keeping a professorial approach.
Ferguson is one of the first I've seen to shed due attention to the area of academia and its cozy relationship with the financial institutions. Many of the same names involved in the accumulated financial disaster are teaching economics at prestigious Ivy League universities. These men, the devoted disciples of deregulation, are teaching the next generation of capitalist sharks. Ferguson even examines the non-disclosure of who is paying all these business profs. A professor can have a lucrative side business when it comes to consulting, so the companies that benefit the most from deregulation are paying the men championing the ideology of free markets. Professor will write scholarly articles about the merits of various financial firms, failing to note that the firms paid them. It's another in an endless series of maddening conflicts of interest that go unimpeded.
Inside Job ends on a somber note of resignation. As we're informed, not one body has been brought to justice over the worldwide financial collapse or the crimes and outright fraud that got us there. In the wake of the doom and gloom, banks gobbled each other up and now Too Big to Fail has gotten even bigger. In a world where companies book potential earnings as current earnings, bet against their own stocks, and employ a phalanx of high-priced lawyers and lobbyists to resist any minute reform, whom is the American public supposed to trust? Who isn't on the payroll? Ferguson's lacerating documentary is the best starting point for novices to history, but even Inside Job is far from definitive. This is because the complete scope of the 2008 crises cannot be contained to a two-hour movie, even with the talents of Ferguson. As the movie comes to a close, and the audience is generally feeling numb to all this high-stakes larceny, it looks like things are depressingly settling back to the way they were. President Obama has appointed several people involved in the financial collapse to cabinet and regulatory positions. I'm sorry Mr. President, but that doesn't count as change by the most generous definitions. The coterie of Wall Street elites feel that they are indispensable, that what they do is just too complicated for the rest of us plebeians to fathom. I don't know about other folks, but I'm tired of the top 0.1 percent holding the rest of the nation hostage and expecting everybody else to foot the bill for their gambling losses. The narration ends with a righteous fury, declaring that some things are worth fighting no matter how hard. Inside Job is required viewing for every man, woman, child, and dog in this country. The future of the world depends upon people seeing movies like this. An informed public is the best defense against Wall Street firms and bought-and-paid-for politicians getting away with murder -- again.
Nate's Grade: A
