I wrote this five years ago, right after Charles Ferguson won his Academy Award. I think I have a pretty good idea now of what Wall Street planned to package and sell next.
Inside Job (2010), Charles Ferguson's exposé of the takeover of American government by greedy financiers, is full of information. It adds important details to the history of the worldwide financial disaster that triggered the Great Recession, and, even when Ferguson is being redundant, recounting facts that are generally well-known, he's entertaining. Sunday night, Ferguson won an Academy Award.
The question is: How relevant is the history of a ponzi scheme that caused a global financial disaster back in 2008, now that the folks Inside Job calls our "Wall Street government" have moved on to undermining civil liberties, torpedoing single-payer health insurance, busting unions and generally shredding the safety net we cobbled together during the Great Depression?
Inside Job (2010) Economic Crisis Film LLC
Will Charles Ferguson's documentary film bring down the Wall Street government? Will it even break their stride?
I have no doubt, that Inside Job will do what film and art are uniquely suited to do. It will change the way we look at the world. I don't think anyone who sees Inside Job will ever look at bankers and the finance industry, academia, our government, or the history of America over the last 30 years in the same way again.
Inside Job unfolds like a criminal trial, with Ferguson carefully building a case against the most prominent financial figures in America, many of whom are now in the Obama administration. By the end of the trial, the verdict of history -- or at least of the historian, Ferguson -- is clear. The finance industry and the government, on purpose, wrecked the world economy and destroyed millions of lives.
Ferguson's explanation of how subprime mortages were bundled as derivatives, called Collateralized Debt Obligations -- CDOs for short -- and sold in unregulated markets along with Credit Default Swaps -- insurance policies that paid off when borrowers defaulted on the subprime loans in a CDO -- is easy to follow. Because anyone could buy a Credit Default Swap against a CDO, whether they owned the CDO or not, firms like Goldman Sachs could sell CDOs and bet against them at the same time. AIG, the main writer of Credit Default Swaps, collapsed -- and got bailed out -- when it couldn't pay off on the Credit Default Swaps it had written. The financiers held on to the commissions and bonuses they made selling the CDOs and Credit Default Swaps, even after the bubble burst. The taxpayers held on to the dirty end of the stick.
Ferguson is a skillfull interviewer who balances skepticism with naiveté and knows how to follow-up when he gets an opening. The big names in finance and government were smart to dodge his interviews. He is especially savage when he unmasks the academics -- the professors of economics and finance -- who sold out to the finance industry, covered up for crooks, and even invented economic theories to justify and defend Credit Default Swaps.
Inside Job is a film in the tradition of documentaries like Edward R. Murrow and Fred Friendly's Harvest of Shame (1960). It combines interviews and narration with archival video and photographs to make a point. It's not particularly filmic, but the cinematography of Svetlana Cvetko and Kalyanee Mam is crisp and sophisticated. It fits the subject. The settings for the interviews are well chosen. A fast-moving montage of mansions, yachts, jets, drugs and whores -- but where were the male prostitutes? -- adds a dimension to the history of the meltdown that was missing from the Congressional hearings on C-SPAN. To his credit, Ferguson sees Wall Street's obsession with wealth and its use of drugs and prostitutes more as character issues than as moral ones. And he's not without humor. The irony of Eliot Spitzer being reluctant to use the personal vices of Wall Street underlings to force them to flip on their overlords is not lost on him, or on us. Equally ironic is the Bush administration's sacrifice of Lehman Brothers to "calm the markets," like Greeks, sacrificing to Poseidon to calm the seas. If Inside Job has a weakness, it's in the way Ferguson brings the pain of the financial crisis down to the individual level. Why interview workers in China when so many workers in the Midwest had lost their jobs?
Inside Job won the Academy Award for Best Documentary this year, but, in spite of Matt Damon's sappy reminder -- delivered as we gaze at the Statue of Liberty -- that "some things are worth fighting for," Inside Job may not accomplish as much as Ferguson hopes.
What we -- the survivors -- need now, instead of warnings and history, are tools. We need to know how to get on down this Cormac McCarthy kind of road, past the charred, asphalt-covered bodies of the refugees who died when the death ray caught them pushing shopping carts, burdened with their last belongings, along the interstate. We need stuff we can use.
And we need to know what the overlords -- the financiers who are, as Ferguson reminds us, still in power -- are going to do next. What will they package and sell to create the next bubble? Maybe we can get in on the ground floor.
A link to the complete film is here at YouTube.