DVD Review: This Academy Award-winning documentary shines a light on the tangled web of suspicious relationships, questionable incentives, and complex financial instruments behind the 2008 economic crisis.
It is no small task to try and explain what led the United States’ financial system to the brink of collapse a few years ago. I’ve read nearly every book on the subject, and almost all of them are extremely long, with multiple pages existing solely to help readers keep track of long lists of “character” names, in addition to glossaries of terms, acronyms, and jargon. Most of these books were written by financial journalists and targeted toward those already in the financial services industry. So how in the heck was director Charles (No End in Sight) Ferguson going to explain the mess to non-bankers in just two hours?
The approach he took was to weave together a narrative using news footage, interviews, and — for especially complicated topics — graphics, and to focus on milestones that laid the groundwork for the downfalls of Lehman Brothers, Bear Stearns, AIG, and other “too big to fail” institutions. Matt Damon provides narration to help connect the dots.
Ferguson zeroes in on the spectacular uselessness of credit-rating agencies, the exponential growth of “over-the-counter” (privately traded and unregulated) derivatives based on subprime mortgages, and the back-scratching partnerships formed between investment banks, certain parts of the government, and academia. If you follow financial news or ever read the Wall Street Journal, you’ll be impressed that everyone from George Soros to Paul Volcker to Eliot Spitzer agreed to be interviewed. The best parts of the film, however, are when Ferguson catches his subjects off-guard with pointed questions and accusations that they can’t B.S. their way out of. Several such exchanges are literally uncomfortable to watch, even though there’s no doubt that these particular people have engaged in shady activities for their own benefit and deserve to be grilled… especially since it appears that no one else has called them out so far.
Inside Job‘s focus on the lack of accountability by those who played a role in bringing the country’s markets to the brink is meant to be a clarion call to the people of the United States. Its message is clear: This catastrophe can and will happen again if something doesn’t change, like yesterday. Not exactly the feel-good film of the year, but an important one to watch and understand if, in the future, you’d prefer to vote people into office (at all levels of our government) who support the necessary reforms. Oh, and on that note — if you’re wondering whether the film is in any way political, it is in the sense of pointing out failures by both parties to seize opportunities and make the hard decisions that could have prevented some of today’s enormous problems. Now, unfortunately, it’s up to the rest of us to take action.
Inside Job won the 2001 Academy Award for Best Documentary Feature, and is now available at redbox. Reserve a copy!
(If you’re interested learning more about the regulated side of the derivatives industry and the executives in charge, guess who just wrote a book about that world? ME! Rest assured that Zero-Sum Game is a truly quick and entertaining read (I mention Ferris Bueller’s Day Off on the second page, for Pete’s sake… it’s meant for those outside the financial services industry), and that through the story of my crazy year at the Chicago Board of Trade you’ll learn a ton about the very same people who are currently trying to help our country defuse the derivatives time bomb referenced throughout Inside Job.)
Other notable documentaries currently at redbox: