As an outspoken critic of this year's Oscars, I'm happy to note they got one thing right: Inside Job won the award for Best Documentary feature.
As of last week, this first-rate expose of the root causes behind the 2008 financial meltdown became available on DVD.
Rarely do I resort to exhortations like this, but here is a movie that every adult American should watch, digest, and discuss... then maybe watch again.
Its impact speaks to the unique power of film to relate a compelling story in under two hours, and have it hit you like a sledgehammer.
Like many others, to deal with my own bewilderment in the wake of this crisis, I had consumed Andrew Ross Sorkin's much-praised book Too Big To Fail, and came away with a somewhat better understanding of what had gone down.
(I also felt oddly guilty that the book read like a thriller.)
Inside Job is not thrilling per se; A.O. Scott put it best when he described it as "infuriating".
Most thoughtful people know by now the broad causes behind this mess: a steadily growing pattern of abuses in the wake of financial deregulation begun during the go-go '80s.
Still- for context (and at the risk of over-simplification), I'll try to encapsulate the gist of what went wrong:
Before deregulation, a bank only sold mortgages to customers who were good risks and could pay them back over time.
With deregulation, obscure financial instruments were developed and promoted whereby high-risk mortgages could be packaged together and re-sold to large, speculative institutional investors. (Most of these investors never even attempted to understand these complex instruments or question their underlying value. All they knew and cared about was that they generated short-term profits.)
With their own exposure thus diluted, banks started selling mortgages with little regard for risk. It was like printing money: the more mortgages they could generate, the greater the short-term gains. Hence the housing bubble, built on mortgages sold to people who likely could never pay them back.
As this dense, elaborate house of cards gradually built itself up, the rich got richer, and the poor got set up. And when it all finally imploded in 2008, the reverberations were felt globally.
The outrage I felt watching Inside Job came from several key arguments, expertly presented:
First, there's the sad, recurring reality that the biggest victims in financial downturns are in fact our poorest citizens, not the people who caused the whole mess to happen.
It's also frustrating to hear that warning bells were sounded, but with so many people focused on getting filthy rich, they were simply dismissed or ignored.
But here's the worst part: there has been virtually no accountability for this disaster. Why? Because the ties between government and business have been so closely linked for so long, that to pursue real justice would be an incredibly ugly and disruptive affair.
Hank Paulson, Secretary of the Treasury when the crisis hit, was formerly head of Goldman, Sachs. His successor and the current man in the job, Tim Geithner, was previously head of the New York Fed. So perversely, the people appointed to oversee the soundness of the system are the same people who had a hand in undermining it in the first place.
Even academia gets into the act, with the heads of some of our foremost business schools teaching the benefits of deregulated markets while quietly making most of their incomes as board members of the major investment banks.
Conflict of interest anyone?
What's the worst punishment these CEOs have received? Inside Job rightly singles out Dick Fuld of Lehman Brothers. Having lived like a sultan, the poor man lost his job, but only after driving a once venerable company into the ground. And to ease the pain, he walked away with a severance paycheck in the hundreds of millions, while ordinary Americans were losing their jobs, their savings, and their homes.
Inside Job also focuses on once-revered and respected figures like Alan Greenspan and Larry Summers -- people who wielded immense power and influence on global markets, and who saw nothing amiss as the world approached a financial abyss.
How have they been held accountable? The short answer is not at all, though it's certain they've only gotten richer on book deals and speaking tours.
Then there's good old Ben Bernanke, undeniably in a position to spot the warning signs. It seems he simply had no clue. His punishment was a promotion to Greenspan's old job, heading up the Federal Reserve, a highly influential post he retains to this day.
A lot of supposedly brilliant minds seem to justify it all by claiming that our whole financial system-- the one they created, mind you-- has become so complex that nobody could have seen this disaster coming.
This is infuriating. After all, isn't their ability to manage this complexity the reason they're paid so well? And if they fall down on the job and betray the public trust, shouldn't their positions and their pay be affected?
I guess not. The word is that bonus packages are back and plentiful on Wall Street. And CEOs are still making a killing.
The basic, maddening, bottom-line truth is that nothing has really changed as a result of this cataclysm. And neither party can be singled out for this paralysis; as Inside Job aptly demonstrates, when it comes to abuses in the financial system, both Republicans and Democrats earn an "F" on their report cards.
After much bold initial talk from the current administration about financial reform, no substantive bill addressing it is on the horizon. And with a pro-business Republican House majority supporting smaller government, it's unlikely anything significant would pass anyhow.
I suppose Washington figures Americans have short memories. Once the recovery is truly underway and people get their jobs back, they will quickly forget what happened in 2008, and why.
Inside Job is a movie that challenges that assumption, that riles you up and makes you want to take action. Could average citizens use this film to inspire a grass roots movement that hastens a day of judgment for the various fat cats who got off scot-free, and demands real reform in our financial system?
It may sound far-fetched, but wilder things have happened. After all, they say it was the cell phone that toppled the government in Egypt.
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