In an interview with John Campbell, chairman of the Harvard Economics Department, filmmaker Charles Ferguson uses this analogy:
Ferguson: A medical researcher writes an article, saying 'To treat this disease, you should prescribe this drug. Turns out, doctor makes 80 percent of personal income from the manufacturer of this drug. Does that bother you?Brutal.
Campbell: I think it's certainly important to disclose the, um. The, um. Well, I think that's also a little different from cases that we're talking about here because, um. Um.
So I am late to seeing Inside Job, but I am guessing that I am not the only one who waited for it to come to Netflix, so a few thoughts:
- The film is suffused with righteous moral fury, but also intellectual rigor. It's the best kind of polemic, and seriously I do hope Michael Moore and Davis Guggenheim were taking notes.
- Part of the reason that the exchange above, like the entire segment on the corruption of academic economics departments, is so effective is because it really does present some new information. Somehow cornering a big-time financial services lobbyist with questions about CEO pay and lobbying dollars spent, which the film also does, is just not as effective. Maybe it's not as shocking or satisfying because Crooked Lobbyist is a character out of central casting, and besides, the lobbying guy knows exactly what he's doing in the film: He's there to provide slick, weaselly answers to pointed questions about his clients. The academic guys, by contrast, are so arrogant as to actually be shocked that they're even being questioned in this way.
- It seems like most of the movie is made out of airplane shots of the outside of buildings, and yet it is still visually pretty great. I think they must've shot their Manhattan cityscapes early in the morning or right at dusk, because the light is terrific.
- I think the film's argument is correct and well-constructed. The housing bubble was driven by Wall Street instruments and the crash was the result of a completely deregulated industry grown to monstrous proportions. But still this one, nagging thing: Ordinary people benefited from the housing bubble, and while it was going on they loved the housing bubble. Remember home equity loans? Remember the concept of home-as-retirement-fund? Remember the television program "Flip This House"?
Ferguson talks to exactly one homeowner, a Latina woman whose family was taken advantage of by rapacious, criminal predatory lenders. But there were hundreds of thousands of others who bought into the bogus idea that housing prices always go up and benefited from it.***
Of the questions that arise out of the 2008 collapse, here are some: Should more people have seen the 2008 collapse coming? Are we likely to see another cycle of bubble and collapse? Is last year's financial reform law likely to prevent the next crisis? With the swollen size of the financial services industry, is the government structurally likely to successfully recognize and head off such an event?
Inside Job asks these questions, or at least touches on them. But it seems to me that its main question is a somewhat simpler one. It is: Would the world be a better, fairer place if there were more accountability for the crooked Wall Street CEOs and the hack economists and the macho Type A traders and the government toadies who all, all together, failed us on an unprecedented scale? And the answer is, Yes, absolutely it would.
*** There is a Republican story about the financial collapse that blames it all on Jimmy Carter's Community Reinvestment Act and/or Fannie and Freddie. It is a false, pernicious, ridiculous story. And yet. Acknowledging the truth that derivatives run amok caused the financial crisis shouldn't mean denying that there was a sense in which even ordinary homeowners were in some ways complicit in creating the bubble. A bubble is a kind of mass delusion, and requires the participation of masses.