June 10, 2011
Inside Job Review
Just finished watching the movie 'Inside Job' which was produced, written and directed by Charles Ferguson. The film takes a hard look at the financial meltdown of 2008 but more importantly it examines some of the root causes. Here's a short summarization (storyline) from IMDB;
"'Inside Job' provides a comprehensive analysis of the global financial crisis of 2008, which at a cost over $20 trillion, caused millions of people to lose their jobs and homes in the worst recession since the Great Depression, and nearly resulted in a global financial collapse. Through exhaustive research and extensive interviews with key financial insiders, politicians, journalists, and academics, the film traces the rise of a rogue industry which has corrupted politics, regulation, and academia. It was made on location in the United States, Iceland, England, France, Singapore, and China."
The movie also alludes to the de-regularization of the markets, starting in the 1980s under the Reagan administration, as the main cause of the credit crisis. Financial institutions that are heavily intertwined with government were essentially given a free reign to make a profit and that's what they basically did at the expense of everything else. The maximization of profit and the pursuit of self interest is not that shocking to me, after all that's the cornerstone of the free market. That people can't see the ramifications of their actions or take accountability for them, is.
With CEOs of major corporations transferring in and out of government you would think that these people have an understanding of the result of their actions, however seemingly it's not there. The current Obama administration is filled with the same people that caused the crisis in the first place and they have no intention of regulating the market to avoid similar financial meltdowns. Business as usual apparently. Which leads me to believe that there's even a more dire cause, and that is simply the cultural mindset.
Even Ferguson remarked that while researching the film and conversing with a friend about the housing bubble that was crashing under their eyes that 'they should get into it in order to make a buck.' His friend advised against it because it was going down even more so but that's not important here. The mindset of making a buck almost literally over the backs of other people is. It's the prevalent 'American Dream' where most people aspire to be millionaires, that's what in the end gets you into trouble because you have all these single-minded people walking around trying to take advantage.
What the movie also points out, although not in abundance, is that this culture of raking in the dollars is promoted at almost every level and in many institutions. Professors at universities who teach and promote a free market with little government and are against regulations - often work at financial institutions, companies or enter a prominent position in government. As such there are very few dissenting voices. Maybe what the movie failed to point out more clearly is that a culture based on greed and self interest will cause crises by default.