'Inside Job': Anatomy of a Catastrophe
Editor’s Note: Inside Job, an Academy Award nominee for Best Documentary Feature, will be screening Saturday, February 26, at 6:10 p.m., as part of DocuDay LA at the Writers Guild of America Theater in Beverly Hills, and at 3:15 p.m. at DocuDays NY at The Paley Center for Media in Manhattan.
Most films geared to young boys bank on them coming back time after time to watch their favorite action heroes take on the forces of evil. Adults are usually good for one viewing. But after seeing a new documentary, Inside Job, which uncovers how a group of "evil doers" tanked the global financial system, I think the post-adolescent crowd finally has a multiple must-see.
It's a densely packed film that methodically lays out the who, what, when and where of the ultimate bank job. "My first choice for a title was Bank Job, but that was taken," says director Charles Ferguson.
Ferguson's film is not peopled with a group of charming rogues like the Lavender Hill Mob or sexy, populist, anti-heroes like John Dillinger or Bonnie and Clyde, who held up one bank at a time. His characters are the pillars of Wall Street--the bankers, the analysts, the ratings agents, the regulators and their lackeys in Congress and academia who together tunneled into the banking system and made off with all the loot. The response to this calamity was to engineer a shakedown of tax payers or depositors in order to fill the banks back up so this gang can do it again.
So far, only one industry titan has been charged: Angelo Mozilla, the CEO of Countrywide Financial. But, Ferguson notes, "He's only being charged with civil fraud not criminal fraud." Ferguson believes that the Securities and Exchange Commission (SEC) zeroed in on Mozilla because what he did was "so egregious--and he's not connected." Mozilla spent most of his career independent of the large financial institutions and brokerage houses.
That's not to say others shouldn't be doing the perp walk. "Many people knew [the financial boom] was going to end badly," Ferguson explains. "And their financial behavior suggests that."
At the same time they were touting the shares of their firms, these financiers were not investing their own money in the companies. "They took out hundreds of millions of dollars, much of it in cash," Ferguson says. These actions constitute "potentially both civil and criminal fraud." There's nothing stopping the SEC from going after these guys, but, Ferguson notes, "for anything else to happen would be due to public pressure."
Right now the vocal pressure for reform, however misguided, is coming from the Tea Party, whose members the Republican Party hopes will support its recently announced "Pledge to America." This platform is what a friend used to call "the same old sandwich"--a retread of the same policies that party stalwarts have championed for years: tax cuts, a spending freeze, rolling back health care reform, missile defense and a raid on Social Security as the prescription for what ails the country. There's no mention in the manifesto of any financial regulatory reform, let alone a call to lock up the malefactors who took down the system while lining their own pockets.
The GOP also fails to point out that America's financial system, once the world's gold standard (no pun intended), is no longer trusted. "If you talk to people in Europe, Asia and Latin America, they don't take seriously what America's bankers have to say," says Ferguson. These countries, all with vibrant, growing economies, are looking for other places to put their money besides Wall Street. "It will reduce the amount of investments and will have an enormous impact on America," Ferguson warns. "America's impact is declining."
This wasn't the first time an economy has melted down. The world has experienced numerous economic disasters over the last several centuries, according to Carmen Reinhart and Kenneth Rogoff, who took the long view in their book This Time Is Different: Eight Centuries of Financial Folly. What they found was that as far back as the 1300s elements like rapid deregulation and real estate bubbles coupled with arrogance and ignorance were the sparks that set the economy on fire.
Ferguson agrees with the authors who say that these disasters can be avoided if politicians and regulators step in. "If we don't fix this, it's going to happen again," he warns.
It's up to us to apply the pressure. First step: Go see Inside Job. Bring your friends and better yet, bring someone who doesn't agree with you. Then see it again and bring some more people.
Then let your legislators know that you don't want any silly, faux fixes; you want them to really put some teeth in regulations. Demand someone like Elizabeth Warren be appointed at the SEC and at the Treasury Department, and demand that the ratings agencies be held accountable. And while you're working yourself up into high umbrage, tell Congress to appoint a special prosecutor and put some of the financial system arsonists behind bars. Nothing like the threat of serious jail time to shake things up in the Hamptons. It's not going happen without you. Ferguson's done his job; now it's up to the rest of us.
Inside Job, distributed by Sony Pictures Classics, opened October 8 in New York, and opens October 15 in Los Angeles. The film rolls out to additional cities, starting October 22 with Chicago, Boston and San Francisco.
Michael Rose is a writer, producer and director of nonfiction programs; he also writes for The Huffington Post and other publications.