November 12, 2010 in Features

‘Inside Job’ reveals Wall Street crisis

Colin Covert Minneapolis Star Tribune
 

Former construction worker Steven A. Stephen in a scene from “Inside Job.”
(Full-size photo)

Somebody owes us $20 trillion.

“Inside Job,” a riveting, eye-opening, infuriating documentary about the financial collapse of 2008, coolly presents a prosecutor’s brief against the culprits who engineered the greatest economic crisis since the Great Depression.

They occupy both sides of the legislative aisle, corporate boardrooms, Ivy League faculty lounges and bank headquarters.

They made money – sometimes obscene amounts of it – while rigging a monetary meltdown that left middle-class taxpayers holding the bag, and thousands of less-fortunate former homeowners holding cardboard signs beside freeway on-ramps.

This is no dry economics lesson; it is a vital wake-up call. The film is slickly paced, handsomely shot and chock full of insiders who say revealing things under director Charles Ferguson’s skeptical offscreen interrogation.

Ferguson argues that the financial earthquake was not only entirely avoidable, but was utterly predictable given the steady erosion of scrutiny of financial markets here and abroad.

The film opens with a case study of Iceland, where deregulation of the banking sector triggered unrestrained speculation. By 2008, the country was on the brink of bankruptcy.

Ferguson’s focus then shifts to the United States, where the same thing happened on a vastly larger scale.

In the regulated environment following the Depression, the U.S. went 40 years without a banking crisis. Reducing state monitoring under the Reagan administration set the stage for the savings and loan crisis and the collapse of the junk bond market.

But that was a luau compared with what lay ahead. Successive administrations, Democratic and Republican alike, heeded advisers pushing for further deregulation, leading to WorldCom, Enron, the dot-com bubble and the 2008 panic.

Many of those laissez-faire advocates were prominent academics receiving sizable consulting fees to testify in antitrust cases and in Congress on Wall Street’s behalf. That massive Ivory Tower conflict of interest provides eruptions of dark satire as economics professors dither or bristle under Ferguson’s rapier-sharp questioning.

In contrast to the academics’ high-minded theories about efficient free markets are the sordid realities of an increasingly criminal financial sector. Ferguson catalogs one outrage after another.

But “Inside Job” is not an ideological screed. Ferguson made a fortune as a high-tech entrepreneur and has no quarrel with capitalism. He is an outraged moderate with the intelligence, access and narrative skill to cogently lay out the facts for us.

Watching his movie will make you better informed and very, very angry.

“Inside Job” is playing at the AMC River Park Square 20.


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