[4 March 2011]
PopMatters Contributing Editor
Wall Street was wrong. Let’s get that out on the record right now. The entire financial establishment, drunk on deregulation since some ex-actor and his political cronies declared it “morning in America”, used the money of millions of middle class investors and aging retirees, developed complex mathematical systems of glorified stock market gambling, and bet the works on whether or not they were smarter than the formulas they fashioned. They weren’t. In the end, they lost billions, nearly bankrupted the entire world, and then asked Uncle Sam for a handout when it looked like their clearly criminal activity might destroy the now dead American Dream once and for all.
Using a linear narrative arch (with a few contextual sidetracks along the way) and arguing that our current economic meltdown was decades - and several administrations - in the making, Charles Ferguson’s scathing documentary Inside Job (recent winner of the Best Documentary Oscar, and now available on Blu-ray and DVD) casts a curtain of blame so wide and so pervasive that few will see the light of day anytime soon.
It’s not a new story - Oliver Stone touched on it ever so slightly with his recent aging Gordon Gekko sequel, and Michael Moore made a far more rhetorical argument over same with his equally harsh (and equally brilliant) Capitalism: A Love Story. But Inside Job is different in one regard. By using nothing more than clear cut, indisputable facts and a slow deconstruction of the Ponzi like principals that led to such a drastic financial collapse, Ferguson makes it clear that criminal acts were committed - and as of 2010, justice is still waiting to be served.
There are no sad social sob stories, no disenfranchised mothers clutching their deeds as pinstriped Snidely Whiplashes walk in, twirling their facial hair and looking to dispossess. There are no tea bag rallies, no invested union bosses barking about losing their life savings. Instead, this is the view from the source inward, a stellar examination of how deregulation and governmental collusion led to trillions of dollars in destruction. The premise is so simple that even a Red State Conservative would understand it - and then probably deny it.
Banks and other money managing institutions, with the help of some hands off laws by their buddies in Congress, conspired to bet on home mortgages. Manipulating the companies that rate the reliability of such investments, these global conglomerates sold prepackaged combinations of these secretly bad debts, betting on both their success and failure. When a few companies commanded with protecting said hedging suddenly found themselves with billions of dollars of indemnity to pay, they cried poor and the snowball started down the hill.
From there, the redolent reward and restructure truth wins out. Bosses paid their employees ungodly bonuses for banking such deals. They, in turn, pressured people into buying houses that were overpriced, without any proof they could repay, and on then robbed them of their equity - in most cases, loaning up to 99% of the imaginary value. It was all a ticking time bomb, a historically repetitive move that had already happened with junk bonds and other valueless commodities throughout the previous decades.
One of the things that Inside Job doesn’t shy away from is pointing political fingers. No one is safe here - not Reagan, not Bush Sr. not Clinton, Bush Jr. or current President Obama. All are shown to be wholly owned subsidiaries of the Wall Street establishment with many placing said scoundrels in key policy making positions. In his optional full length audio commentary, Ferguson makes it very clear that this was his objective all along. Far too many people want to blame a single party. Apparently, all partisan philosophies where down with this particular appalling practice.
The Q&As are a rogues gallery of reprehensive (and some reasonable) figures. Those who believe that nothing wrong was really done have to wrestle through the spin to sound somewhat coherent when faced with the cold hard facts of their ideals. Yes, we get the occasional voice of common sense and rationality, the thinker or highly placed scholar who sells reality like a big ass, bitter pill.
But it’s the weasels that we remember, suit and tied arrogance with names like John Campbell (Department chair of Harvard University’s Department of Economics), Martin Feldstein (another Harvard head), Glenn Hubbard (Dean of the Columbia University Business School) and, perhaps most memorably, the hemming and hawing duo of ex-Bush buddy David McCormick and Federal Reserve reject Frederic Mishkin. Listening to them support a system which, without question, caused one of the biggest global panics ever is like watching a racist defend bigotry - with such a flawed premise, any support is specious at the very least.
Ferguson does dole out a few cautionary examples, but they are usually on a much larger, less personal scale. The bookend material, focusing on how Iceland went from lauded democracy to near desolate financial wasteland is excellent, since so much of the narrative is tied up in people who actually aided and abetted in bringing the country to its credit debt knees.
It’s also interesting to see how secondary Superpower China feels about the whole fiasco. But perhaps most telling is the momentary sidetrack into the psychological. A doctor who treats many of the Type-A Wall Street mavericks argues for their marginal mental stability (they apparently LOVE to take risks…with your money) and a madam discusses one of the industry’s dirtiest secrets - that everyone, from CEOs to floor trading underlings, like a little (or in most cases, a pile of) coke and paid female companionship when the working day is done.
With its head to toe corruption and indefensible reasoning, the bad guys of Inside Job do a definitive job of hanging themselves. But as the proposed heroes warn, shining such a light on these nefarious activities will be a short lived victory at the very least. Indeed, those who practice the fine art of fleecing investors will simply find another way to pad their commissions and risk little of their own capital. They did it with the supposedly unstoppable Internet. They did it with companies like Enron.
It’s the cyclical nature of this beast - when money and making it this easily is at stake, the devious will always design a quicker way to the payday. As outrage and insight, explanation and excuse, Inside Job is as fascinating as it is frightening. There is no denying its conclusions. It’s the duplicatible precedent that should have everyone worried.