Documentary Roundup #1: Inside Job

In the last few weeks, my wife and I have gone on something of a documentary binge.  While there are of course wonderful documentaries about all sorts of things, the ones that I really get into are usually the hard-hitting exposes of political or economic deception that is being perpetrated upon us (e.g., Food Inc., perhaps my all-time favorite documentary).  All four of the documentaries that we watched recently (Inside Job, The High Cost of Low Price, Super Size Me, and The War You Don’t See) fit that description, so in the next three posts I will be accordingly evaluating them on three different criteria.  First, message: what is the point they are trying to put across?  How are they trying to change the world for the better?  Is it an important, morally pressing, and coherent message?  Second, content/compellingness of argument: how well do they succeed in accomplishing their agenda?  Is their argument clear, do they bring relevant and compelling information to the table?  Is their evidence strong enough, and their answers to objections forceful enough, to persuade a skeptic?  Third, cinematography: is it a well-made film, enjoyable to watch?  Under this heading fall all the film rudiments–good script and organization, arresting visuals, good sound quality.

For good measure, I’ll also throw in a docu-drama that we watched in the last few weeks, that is of historical, not political or economic interest–KJB: The Book that Changed the World.

Inside Job (2010) 

 Directed by Charles Ferguson 

Message: 5/5
Content/Compellingness of Argument: 4.5/5
Cinematography: 5/5

This movie didn’t win an Oscar for nothing.  Powerful and urgent message, engrossing narrative, visually beautiful, and some truly delightful moments of interviewees writhing under the camera.  Inside Job investigates the anatomy of the 2008 financial crisis, and comes away with a damning conclusion: the major financial actors involved rigged the system so that they would make money hand over fist, come what may.  The major government actors involved aided and abetted their fraud because they were largely themselves financial industry insiders, and/or were driven by blind faith in a deregulatory ideology.  Worst of all, despite all of the public outrage after the financial crisis, almost nothing has changed.  The same financial entities dominate Wall Street, only now more monopolistic than ever, and those who made millions (or hundreds of millions) at others’ expense in the lead-up to the crisis still by and large retain their immense fortunes.  The so-called “financial reform” bill ended up changing next to nothing, and all of the new appointments in the Obama administration are every bit as much the corrupt industry insiders that dominated the previous two administrations.  As my dad put it, “the most left-wing candidate that could possibly get elected in the US today ran on an explicitly anti-Wall-Street platform, and still nothing changed.  Now that’s scary.”  

The best part of the film is how Ferguson manages to elicit some remarkably defensive or idiotic reactions from some of the people he is interviewing, putting them in the hotseat and mercifully pressing his advantage to expose their duplicity.  Frederic Mishkin and Glenn Hubbard (professor and dean of Columbia Business School, respectively), may not ever be able to show their faces in public again.  For Ferguson draws attention to the corruption that has infested the discipline of economics itself, in which supposedly objective economics professors are paid staggering sums (which they are not required to disclose) by the entities that they are supposed to be writing reports on (e.g., Mishkin being paid over $120,000 by Iceland to write a report on the financial stability of Iceland).  

Two objections might be made, which explain the 4.5 stars on Content/Compellingness of Argument.  In order not to waste too much time on the actual unfolding of and resolution of the crisis in late 2008 and early 2009, so that he can focus on the more insidious lead-up and aftermath, Ferguson tends to rather dramatically oversimplify what went wrong and, more importantly, what went wrong with the immediate political responses, like TARP.  This oversimplification may well leave an escape route for those who refuse to accept the basic contention of the film and blame the crisis, say, on too much government intervention.

The second concerns the crucifying of Mishkin, Hubbard, et. al., and is so well-summarized on this law blog (well worth reading) that I will simply quote the objection from there: 

Ferguson, however, essentially leaves it at that: Summers, Hubbard, and others have made millions by being shills for Wall Street, which must explain why they did it. That is simply wrong. I cannot imagine that either of those men wrote what they wrote to become rich, or that they continued to write such things after having been seduced by the riches of Wall Street. They are true believers whose arguments are congenial to Wall Street. Becoming rich was incidental to their career paths. They sought career success in top-flight economics departments, and the rest fell into place.

The better question, therefore, is how it has come to pass that the economics profession is dominated by men (and it is still very much a boys’ club) who believe such nonsense. Some of these guys still think that there was no bubble — that the financial crisis was actually a rational, equilibrium response to economic fundamentals. And even those who will not say anything quite that crazy publicly are still unfazed by the manifest failures of their ideology.”

This last remark points to the most troubling thing that the movie reveals–the impenitence of all those complicit in this crisis.  It would be hard to imagine a bigger wake-up call than the financial crisis of 2008–a more serious meltdown is scarcely imaginable (it’s worth remembering that the fact that impacts were not considerably more severe was due only to massive and repeated emergency action).  If there was anything that could convince bankers, politicians, economists that something was wrong with their paradigm and their actions, it would be the 2008 crisis, right?  Yet hardly any seem to have learned their lesson.  Few if any of the major bankers have admitted any wrongdoing, nor have Hank Paulson, Ben Bernanke, or any of the other Wall Street stooges in Washington admitted that they completely screwed up.  Most economists continue to preach the same orthodoxy.  

And, worst of all, the American people have quickly forgotten their grudge, and moved on to new scapegoats…it took little less than a year for Republicans to make Obamacare, rather than Goldman Sachs, Public Enemy No. 1.


So, go see this movie.  And then go do something about this appalling situation, if it’s not too late.