By JPFMovies in consultation with Dr. H
The Inside Job is the Oscar winning 2010 documentary by Charles H. Ferguson about the financial crisis starting around 2007 to the present. Ferguson describes the film as illustrating “the systemic corruption of the United States by the financial services industry and the consequences of that systemic corruption.” As noted, the film won an Academy Award for Best Documentary Feature this year.
One of Ferguson’s major points is the force the financial industry wields on the political process and the ways they use it. One of many points discussed by the film is the prevalence of “the revolving door,” when financial regulators are hired by the private financial sector after leaving government positions to make millions in the very industries that they regulated. There is a law in place that is designed to curb this abuse but it is narrowly drawn and enforcement is lax (the law imposes a one year “cooling off” period between leaving the civil service and going into the private sector that you regulated).
Much of the film takes a historical look at changes in the financial services industry over the past decade leading up to today’s crisis, the movement toward deregulation (i.e. repealing parts of the Glass-Stegall Act in 1999-2000), and how complex trading schemes permitted massive increases in risk taking while skirting the very regulations designed to curb these risks (remember the 1994 bankruptcy of Orange County, California—caused in part by risky derivative trading).
The film points to many undisclosed relationships and conflicts of interest that have a material influence on important institutions like credit rating agencies and universities (as when academics who receive funding as consultants do not disclose this information in their academic writing), and also notes that these conflicts played a role in hiding and ultimately aggravating the crisis.
Another significant issue discussed is the insane pay in the financial industry and its explosion over the past decade incredibly out of proportion to the rest of the economy. The compensation abuses have grown so bad that even at the banks that failed, banking executives were making hundreds of millions of dollars in bonuses right up to the institutional failures and ultimately the current crisis.
I was glad to see that mainstream media outlets had more journalists with guts than I expected. Especially since Ferguson’s bread and butter comes from the media industry which did not escape culpability. I don’t know if it was just me but the documentary didn’t tell me anything that I already didn’t know (or at least confirmed what I had suspected) with one exception: I had no clue that our academics in their lofty ivory towers had their snouts in the trough as much as any seedy executive or other special interest group. Academia seems to bear as much responsibility for the current crisis as any other major player in this economic catastrophe. Academics have somehow managed to keep their image as pure and unbiased thinkers when in reality they are as corruptible and greedy as anyone else on “Wall Street.”
As I said, the documentary didn’t really tell me anything I didn’t know, but I am grateful that it provided its viewers with a different but well-founded point of view. As good as the documentary was, it wasn’t so good that it deserved an Oscar (in my “humble” opinion). That said I’m thankful for what the film provides its viewers—exposing the slimy underbelly of a significant part of the American economy.