corruption

Inside Job (Director: Charles Ferguson): Based on dir­ector Ferguson’s last film, the mas­terful No End in Sight (review), I expected Inside Job to be meticulously-researched and yet com­pel­ling enough to appeal to a main­stream audi­ence. Having the film nar­rated by Matt Damon will surely help attract a wider audi­ence, no small feat for a doc­u­mentary exam­in­a­tion of a dif­fi­cult and poten­tially very dry subject.

We begin the film in Iceland. Strangely enough, my wife and I were actu­ally vaca­tioning in Iceland in September 2008 when its banks began to fail. This tiny country’s fin­an­cial industry had become severely over­ex­tended, lending amounts many times the value of the country’s GDP, and its reck­less­ness led to polit­ical tur­moil and an eco­nomic reces­sion that is still being felt. Little Iceland was the “canary in the coal mine,” warning the rest of the world what was about to happen, but it was entirely too late to stop the disaster.

The film­makers lay most of the blame at the feet of the big invest­ment banks (Morgan Stanley, Goldman Sachs, Bear Stearns, Citigroup, etc.) who cre­ated new invest­ment products based on extremely risky mort­gage debts. By rewarding exec­ut­ives based strictly on sales, they encour­aged a “food chain” of lenders to extend credit to people who had a very high risk of defaulting. When this did indeed happen, these banks simply could not recover, since they’d lent out many times more than the value of their own hold­ings. Cynically, they had counted on a gov­ern­ment bailout, which is exactly what happened. The same busi­nesses who decried gov­ern­ment “inter­fer­ence” when faced with the pro­spect of more reg­u­la­tion now turned to the gov­ern­ment to bail them out of their own risky behaviour.

According to Ferguson and pro­ducer Audrey Marrs, they set out to make a non-partisan look at the crisis, and just like in No End in Sight, both Democrats and Republicans come out looking bad, but in their gen­eral dis­dain for any sort of fin­an­cial reg­u­la­tion, the Republicans look worse. Tracing the roots of the problem to a flurry of dereg­u­la­tion under Republican President Reagan in the 1980s, Ferguson also indicts the Clinton admin­is­tra­tion for playing along throughout the 1990s. Perhaps the most infuri­ating and baff­ling person in the film is the man who prom­ised change but who has failed to deliver it. Barack Obama seemed to have put his finger on the prob­lems in the largely self-regulated (ie. well-nigh unreg­u­lated) fin­an­cial ser­vices industry during his pres­id­en­tial cam­paign. But when it came time to choose the mem­bers of his gov­ern­ment, he filled key pos­i­tions with the same old cronies who had benefited from the status quo. It’s no sur­prise, then, that no sig­ni­ficant reform has occurred, even after almost two years of Obama’s presidency.

A very inter­esting part of the film is Ferguson’s explor­a­tion of massive con­flicts of interest within the aca­demic com­munity of eco­nom­ists. There is very little sig­ni­ficant debate around the cur­rent policies of opposing reg­u­la­tion in the United States. This is rein­forced by the fact that most busi­ness school pro­fessors make the bulk of their incomes doing con­sulting work for the big invest­ment banks and fin­an­cial firms. That they never seem to dis­close these rela­tion­ships is dis­quieting, to say the least. Meanwhile they are edu­cating tomorrow’s busi­ness leaders to main­tain the status quo, even as that system’s risks have been exposed again and again.

Although the film is a pretty standard talking-heads and archive footage doc­u­mentary, it’s livened up in places by some inspired music choices. It also helps that a few of the inter­viewees are left twisting on the hook by Ferguson’s ques­tions. Their dis­com­fort eli­cited laughs from the audi­ence, but it’s also dis­turbing that men with such important pos­i­tions in the country’s (and by exten­sion, the world’s) eco­nomic insti­tu­tions come across as either liars or morons.

If I can level one cri­ti­cism at Inside Job, it’s that the film is very light on showing the effects of the eco­nomic melt­down on average people. There is one seg­ment, per­haps a minute long, when a woman whose family was victim to the subprime mort­gage crisis shares her sad story, but she was the only one. Perhaps Fergusion didn’t want to pull the heartstrings too much, but it really helped take the issue out of the abstract world of num­bers and bring it down to harsh reality. When the losses are being cal­cu­lated in the hun­dreds of bil­lions, a dose of everyday reality is needed for everyone.

Official site of the film

Here is the Q&A with dir­ector Charles Ferguson, pro­ducer Audrey Marrs and fin­an­cial journ­alist Gillian Tett (who appears in the film) from after the screening. They are intro­duced by TIFF doc­u­mentary pro­grammer Thom Powers.

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Duration: 14:30

(8/10)

Tagged as: #tiff10, corruption, economics

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