Inside Job Movie Essay Examples

So, neutering bank reform was essential in order to protect their rent seeking ability. Shifting the focus of debate onto the national debt was essential in order to mask their collective culpability and graft. Imposing austerity on the rest of us was essential in order to avoid paying the consequences of their ineptitude and indifference. In order to protect themselves they had to stand together and spew out platitudes and patronizing homilies about how tough we all need to be in order to dig out from the crisis. A crisis that their ideas, their actions, and their greed caused.

All around the world everyday people are suffering a loss of wealth and, or, income as a direct result of the ability of this small group to impose its own agenda on us. Yet that group has emerged unscathed. They still rotate through the same jobs. They still teach at elite schools. They still control the academic agenda. They still run the same banks. They still staff the Treasury or the Federal Reserve Board. And they still dictate how our national wealth will be divided: 95% for them, 5% for the rest. Just the way it ought to be in a society where democracy has been weakened by decades of free market dogma, slipshod oversight, defunded government, and an extraordinary collapse in ethical standards.

No wonder the Tea Party is up in arms. Our social fabric is beginning to fray. Anger permeates debate. Reason flies out the window. Facts become opinions. Opinions become facts. We stopped being we. Instead we became them versus us. Turned in on ourselves by the needs of the system.

Only one group wins when society turns on itself: the elite in charge. That dark and amorphous group we dare not contest for fear of the unknown. Or at least that is what they tell us.

America is not what it was. It’s political system is horribly corrupted by the flow of money. Rich companies and individuals impose their views simply by dint of their ability to spend. The rest of us, those who object, are muted by the flow of cash that drowns out dissent. Supreme Court justices cavort in private jets and take cash sums for speaking to lobbyist groups. They then ask us to believe they are impartial. Politicians view fund raising as their primary task. They then ask us to believe they are impartial when they vote. Professors write papers supporting the objectives of their sponsors, and then see no conflict of interest. Business leaders pay themselves whether their companies succeed or fail. Boards of directors stand idly by as CEO’s leave with millions – hundreds of millions – even though they are unmitigated failures. Managers stay put even though they are manifestly incompetent. The concept of shareholder control is laughed at: the SEC actively prevents shareholder democracy. It might destabilize the system. So no one owns big business. There is no control. The system just is. It is a mockery of capitalism. It is a mockery of democracy. But especially of democracy.

And all the while they preach that this is the land of opportunity.

Their opportunity.

Once America embarked on its great experiment with illusion, back in 1980, it deliberately stepped away from a fact based narrative. It plunged into Hollywood. Or Disneyland.  Politicians realized they could cast balm across fears by talking in hopelessly unreal dreamlike terms. They also learned to demonize the opposition and the government. Words were recast with new and derogatory meanings. Alternative ideas and views were systematically eliminated or stifled. Their new way was simplified, black and white, and unrelentingly self regarding. Gradually the great utopians were able to kick away reality. They were able to shut out what Judge Brandeis called the disinfecting capacity of sunlight. In the shadows they constructed a version of laissez faire, updated and outfitted for the modern era.

They have persuaded regular people to vote consistently against their own best interests. They have led the country into decline. They have started wars on a lie and a whim. And they have shifted the national wealth in unprecedented amounts into their own pockets.

The crisis did not hurt them at all. It hurt us. It was their mess. It is ours to clean up.

And we agree to do this, why?

Because we are told the system must be preserved. The nation is fragile and we must surely understand the need for tough austerity action. We must take our medicine. We must sacrifice those pensions.We must give up those immature dreams of rising wages. This is, we are told, a global economy. We must suffer the consequences of the dreams of the poor who aspire to be like us. Capital is free to shift around the world. Profits are to be found abroad. If that hurts us here, then that’s just the system at work. And we must never disrupt the system. Never, ever, disrupt the system. It is a work of nature just like the oceans or the mountains. The market is an artifact, not of humans, but of the natural world. It is invisible to us. But we are caught in its dehumanizing grip. If the mechanism requires that you accept a lower wage, please do, it makes the model work so much more smoothly.

And the corruption stinks. Yet it exists. The lack of ethics reeks. Yet it persists. Just recently the economics profession failed to come to grips with its ugly lack of ethics. Apparently market forces will impose some form of ethics. So economists don’t need to abide by the same rules that the rest of society seems to think are important.

When you have sunk so far down the free market rabbit hole that you believe it will fix everything, ethics becomes just another exogenous variable to be assumed away. When you assume that all social ends are best met by efficient outcomes from constrained optimization models, ethics is obliterated by the great machinery that guarantees that optimum. And when you become irritated by the niceties of reality and its inexorable muddiness such that you treat it as an unfortunate intrusion into the sublime order of your theory, you have left behind both humanity and the need to balance work with an ethical view. Mad science is mad, however complex or elegant its math.

All of this stems from my viewing of that movie.

I guess it put me in a bad mood.

My distemper stems from the grim truth the movie tells. It reveals just how far America has lurched from its earlier, more prosperous, trajectory. It tells us how hard it will be to get back, if we can, to a more balanced, less extreme, less unequal state.

And economics, at least its orthodox brand, isn’t helping. Indeed it has been co-opted, willingly so, by the system and those who benefit from it. Many of our most renowned economists are guilty of aiding and abetting the gutting of our democracy, and of feeding at the same trough as the bankers who destroyed the economy. There are some, well meaning, that claim economics is apolitical. Possibly. They claim the bourgeois values of capitalism are worthy of protection and nurture. After all we are all so much better off. Perhaps. But they ignore the ease with which orthodox economics has been turned into an ideological exercise. They ignore the inequality. They dismiss social remedies as pathologies eating away at the fine muscle of capitalism. Maybe they are right. But they are not politically neutral.

Democracy and capitalism are in conflict. The one protects the weak by giving them power. The other exploits the weak by concentrating that power in the hands of the wealthy. The two groups fight. Those who deny this struggle deny reality. They would prefer a pleasant world where the rich and poor cohabit in joint interest. Where labor and capital are equals. Utopia. Harmony. Quiet. And not the cacophony of the real world.

I do not seek the supremacy of either democracy or capitalism. Either, in extremis, can be volatile and unhealthy. I seek a balance. And when I watch the “Inside Job” I am reminded of how far from balance we are. Right now it is our democracy that is lost. We have a surfeit of capitalism. We are bloated by the corruption and lack of ethics that it has brought. We need to change.

In my world, that means economics has to change.

But you all know that already.

When Michael Moore made his debut feature, Roger and Me, he set about vilifying the boss of General Motors, the now deceased Roger B Smith, for destroying his home town of Flint, Michigan. Charles Ferguson's film Inside Job attempts to blame a wider cast list for the banking crash of 2008 and explains why so little has been done to reform the financial world or bring criminal prosecutions against the main protagonists.

His villainous lineup includes bankers, politicians (many of whom were previously bankers), regulators, the credit ratings agencies and academics. When Glenn Hubbard, George Bush's chief economic adviser and dean of Columbia Business School, is shown as a partisan advocate of deregulation, we have one of the movie's punch-the-air moments. During the interview, Hubbard, who denies he was corrupted by his paid-for relationships with government, angrily barks: "You've got five minutes, mister. Give it your best shot."

The spotlight has largely bypassed academics in the UK. There are plenty of economists who believed the banks understood what they were doing and supported deregulation. Whether they took large slugs of cash for writing poorly researched, cheerleading reports on the economic miracle in Iceland (pre-crash), as former US central banker Frederic Mishkin is found doing, is less clear. Over here, the relationship between academia and business appears to be more arm's length, though London Business School dean Sir Andrew Likierman sits on the Barclays board, while Howard Davies, who argued for light-touch regulation while head of the Financial Services Authority, has become director of the London School of Economics. The UK's chief villian, however, is probably the disgraced, but largely unpunished, banker Sir Fred Goodwin, the former boss of Royal Bank of Scotland, once the fifth-largest bank in the world.

In Inside Job, the name that keeps cropping up is Larry Summers, a friend of President Bill Clinton and more recently Barack Obama. Summers exemplifies the links between cheerleaders in academia, Wall Street, supine regulators and an ignorant Capitol Hill that Ferguson stresses were at the root of the problem. It helps that Summers looks like a mafia boss, but the difficulties in making the case against him are shown by the need to explain financial products like credit default swaps and how securitisation was used by banks to increase their borrowing.

Still, no matter how much it is explained, the general public is not going to understand. How does one go into battle yelling slogans about credit default swaps? The bankers know ignorance is their trump card. Maybe Inside Job will make us more savvy in time for the next crash.

Phillip Inman

The derivatives trader

"The film's first half-hour was absolutely dead-on. The explanation of what happened was a chilling re-run of all the events that led up to the financial crisis. It also showed very accurately the denial by everybody inside or outside the industry that such a crisis was even occurring – even up to the last minute before Lehman's bankruptcy.

I have an issue with some of the elements pursued in the rest of the film. One was the vilification of individual people. Chuck Prince, the CEO of Citigroup at the time of the crisis, may have been overpaid – but I don't think he was particularly at fault. At worst he perhaps should have known more about what was going on, but really he's just the nice old geezer at the top who shakes people's hands at cocktail parties. There may be people lower down who knowingly did criminal things, but that is a different matter.

A weak point was the anti-free market and conspiratorial tone of the film. Yes, deregulation did go too far – particularly with the repeal of the Glass-Steagall Act of 1933, which might have prevented banks gambling with depositors' money. But to imply that all deregulation in the last 20 years was a conspiracy perpetrated by an academic elite of economists in the pay of the banks is paranoid and absurd.

An oversight by the film was to ignore how risk managers at many banks knowingly failed to voice their fears about the way their companies operated. A risk manager once told me that to raise an issue that undermined the bank's multi-billion-dollar profits would have been to "sign his own death warrant". This inability to challenge trading desks generating billions in phantom profits was endemic.

Inside Job clearly catches some of the anti-banker mood, and the public is quite right to be outraged at how banks refinanced at the taxpayers' expense are paying outsized bonuses. Staff at banks such as RBS should be retained by longer-term incentive schemes such as the one being introduced at Barclays. But, as a free marketeer, I believe banks that have not taken public money should be able to do as they please within the law."

Ian Hart was a Wall St derivatives trader, before becoming a head-hunter for, among other banks, Lehman Brothers. He now runs Sacred Microdistillery.

The bank director

"This was a well-researched film that clearly explained the complexities of the crisis and the greed of bankers. It laid the blame squarely where it belongs – at the feet of bankers, of ratings agencies, of regulators – and it interviewed a lot of heavyweight people, such as Dominique Strauss-Kahn, Eliot Spitzer, Raghuram Rajan and Glenn Hubbard.

It will doubtless make many people – especially those who lost their jobs and savings – angry at not only what the banks did, but that many of the people responsible are still in their jobs, and that no one's gone to prison. It beggars belief that ordinary taxpayers are facing higher taxes and spending cuts, while bankers walked away scot-free. The film shows that people who had bought a house they couldn't afford are now living in a tent, whereas bankers have still got their jobs. Consumers enjoyed buying houses that ultimately they couldn't afford, but mortgages were shoved down their throats without any care on the part of the bankers. In the old days, the bank would say: "We don't think you can afford that mortgage, so we won't lend you money." The film showed how this kind of advice was thrown out of the window.

Unfortunately, it's clear that for many investment banks business continues pretty much as normal and that another crisis is only a matter of time. Sure, there's greater scrutiny of bonuses – but many bankers think they were not responsible personally for the crisis and they're worth every penny they're paid. Clearly they're not.

I thought the film also brought out well the "capture" of regulators, politicians and academics who all became cheerleaders for the continued deregulation of finance that began under Ronald Reagan and that culminated in the great crisis. Massive re-regulation is required to ensure that finance is safely locked up in a straitjacket again.

Of particular interest is the dubious role played by academic economists, especially those in the US. Many were paid vast, undeclared sums to produce biased reports saying CDOs and other dodgy derivatives were safe and that Iceland was fine to be gambling with 10 times its annual GDP. The corruption of top US economists and their complete lack of awareness of what they had done was truly shameful."

The broker

"The film was right that banking became synonymous with living the high life, with drug-taking, and basically being above the law. This culture filtered down from the top, and needs to be stopped and questioned a lot more. In Europe, we have tried to since the crisis. Where I work, we are compliant up to our eyeballs – be it drug checks, expenses checks, or simply the monitoring of all phonecalls and emails.

But it was too simplistic for the film to imply that we need more financial regulation. It's not a black-and-white issue, and you can't be that kneejerk: the UK is a service-based economy. I would love that to change, but right now, a lot of the GDP comes from people in and around finance. The City itself employs vast numbers of people – not just as bankers, but also on the periphery – and until we move away from that, and find other ways of employing these people, you can't just shut down an industry. With very harsh regulation, that's unfortunately what you risk. As a lot of these banks are global and flexible, they can just go overseas. HSBC's been threatening for years to move its headquarters to Asia. For the UK, that would be a disaster. So I think the government has to tread a fine line between bringing in regulation bit by bit, and regulating all at once.

I'm one of the few women in banking and it's really obvious watching Inside Job that this is the case. We see the French minister of finance [Christine Lagarde], there's a woman from the Securities and Exchange Commission – but they're few and far between. As they say in the film, banking is such an alpha-male society and it's very hard for women to succeed within it and yet maintain some sense of femininity. If they had more women in banking, I really think there would be more sense of community, and perhaps things such as this crisis wouldn't happen quite so often, because you wouldn't have this sense of being part of a boys' club."

The investment banker

"Inside Job ignored the enormous level of consumption by ordinary people that drove debt levels so high. The film suggested it was the bankers and the politicians who were driving the collapse – and fair enough, there was some mis-selling of mortgages. But it wasn't just mortgages: it was bank debt, credit-card debt, car loans. Blame the banker for providing the credit, but the consumer must also take some of the rap. If you talk to a sole trader, they'll tell you that when times are good, put some money away for when times are bad. But the consumers just spent and spent, and assumed the good times would go on for ever.

Another angle missed by the film was the role of accounting firms. There is a huge amount of blame to be attributed to them. It was their responsibility to monitor the accounts of banks, and when they signed off a bank's results, they were stating their confidence in the bank's ability to trade solvently. The film ignored the failure of accountants to say anything. It talked about regulators and ratings agencies. But the accountancy firms are just as big as some of the larger banks and not to analyse their role in the crisis was a huge omission.

The film was very much in the style of Michael Moore – they'd clipped and edited the interviews to twist slightly what was said in them – but it was also very watchable, succinct and very good at simplifying a chain of events. And the accusation that the worlds of academia and politics were complicit in the crisis was completely valid. There is a lot of cronyism out there, and people who criticised regulation did end up in the Obama government. There's a gentleman's club, and they all look after each other."

Interviews by Patrick Kingsley. The interviewees above wished to remain anonymous.


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