DB At The Movies: Inside Job

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The following post is by Dealbreaker reader and commenter Infinite Guest.

Had Travis Bickle had made a good-looking documentary about the perils of deregulation, he would have made “Inside Job.” Sony Pictures Classics gave auteur Charles Ferguson complete creative and editorial control over his sophomore effort. It shows.

Narrated by Matt Damon and shot around the world, “Inside Job” is packaged for a large market. It’s a crowd-pleaser. When I saw it no one walked out or threw popcorn at the screen. The audience was engaged and reactive. The biggest laugh of the night went to David Viniar, who earned it: “I think that's very unfortunate to have on e-mail.”

The documentary’s premise is that worldwide financial crisis was the intended outcome of deregulation brought about by sociopathic bankers and their sycophants in government and academia. The crisis began with the failure of Lehman Brothers and is still ongoing. It caused the global recession that preceded it, for which I gather the Obama Administration is essentially to blame. That, plus a PowerPoint on CDOs and a ten-minute tour of Iceland, is the movie in a nutshell. Although it stops short of imploring us all to hoard gold ingots and canned goods, “Inside Job” belongs squarely to the Government Sachs school of social criticism.

The film is composed of choice edits from hundreds of hours of interviews, augmented by archival footage of many of the people who declined to be interviewed, with occasional narration and intertitles to emphasize key points. Spooky music by Alex Heffes sets the mood. The opening title card helpfully informs us, “The GLOBAL ECONOMIC CRISIS of 2008. COST TENS OF MILLIONS OF PEOPLE their SAVINGS, their JOBS, and their HOMES. This is how it happened.” The closing narration over a long, vertiginous shot of the Statue of Liberty sounds the clarion: “The men who caused the crisis are still in charge and that needs to change. Some things are worth fighting for.” Between those two points we are told that modern banking is the most criminal industry ever, that everyone on Wall Street is a coke-snorting patron of high-priced call girls, that “bailouts do nothing for the common man,” that the United States is going to Hell in a hand-basket, and that the world was a much better, safer, nicer place during the Cold War. Intertitles proudly call out the people who declined to be interviewed for the film – the current and former heads of all the major banks, investment banks and ratings agencies, all of President Obama’s people, Alan Greenspan and Ben Bernanke – as evidence of their culpability. It’s one thing to pin labels and lay blame and quite another to actually connects the dots. A preference for gut instinct tending toward blind rage over any kind of coherent argument pervades “Inside Job,” a film that deliberately conflates all distinction between peccadilloes and high crimes. Its attitude of moral superiority over the privileged and powerful is probably the main source of its appeal.

Now, it’s not that a movie, even a documentary, ought to be a detached and impartial meditation on its topic. It oughtn’t. The great documentaries are emotionally messy. They tell important stories about complicated people and events from a particular, compelling point of view. You enter the theater to see “The Fog of War” believing you know everything there is to know about Robert McNamara and Vietnam but you exit feeling you’d had no idea. A big topic like this, the sudden prolonged contraction of the global economy, deserves a big, angry movie. “Inside Job” may not be angry enough. But that’s not the problem. The problem is that it’s a shallow, confused, dishonest piece masquerading as THE TRUTH. The plot is full of holes and the characterization is one-dimensional; the villains are straw men. What it says, and what it claims it says, what it promises and what it delivers, are vastly different things. If you are familiar with the industry and you have followed the press over the past few years you won’t find anything new here despite the parade of Very Important People in it. If you are not familiar with the industry and you haven’t been keeping up, well, you won’t get much education. Your buttons will be pushed, but that’s about it. “Inside Job” jumps from one disconnected thread to another without ever drawing them together. It is satisfied to accumulate a certain volume of sins, whatever they are, and then to charge that the financial system “turned its back on society.”

For example: Iceland is presented at the beginning of the film explicitly as “the purest experiment in deregulation” ever, a few awful statistics are thrown up on the screen, quick cut to split-screen street riots and general economic misery, shot of a cliff blasted to make way for an unfinished highway, opening credits and then we never see or hear from Iceland again. It’s a MacGuffin. Some filmmaker could have made an entire movie about Iceland, much deeper and more convincing, with dotted lines to the state of the rest of the world. But no movie about Iceland, no matter how unforgettable, could go head-to head at the box office with “Money Never Sleeps.”

Or this: George Soros gives us his oil tanker analogy of sound banking regulation (with graphics, in case we aren’t sure what an oil tanker is). Mr. Soros is one of the heroes of the film. In a movie that is apoplectic about traders making money off of the human misery they inflict, a movie that cannot believe no one has been prosecuted for any financial crimes, George Soros is presented to us as a hero with no mention that he broke the Bank of England in 1992 and was convicted of felony insider trading ten years later.

Eliot Spitzer and Kristin Davis. Not that you would forget, but Kristin Davis in this movie is the former Madam to, wait for it, Wall Street. Who constituted 40 or 50 per cent of her clientèle. Eliot Spitzer is a white hat, a crusader for truth and justice. In this movie, it’s a travesty that Dick Fuld and Angelo Mozilo to walk free but apparently it’s okay for the Gambinos to pay a fine. Lobbyists are an evil influence on politics but actual political corruption, abuse of police power and so on all get a free pass.

We are repeatedly warned about inherent conflicts of interest among those in investment banking research or academia who are paid to promote, essentially, trading recommendations. The most we learn here about Credit Default Swaps is that it’s dishonest, dangerous and destabilizing to use them. Satyajit Das tells us it’s the equivalent of buying insurance on your neighbor’s house, and then, say, burning it down.

Absolutely central to the film is the notion that the mortgage industry suffered from inadequate oversight because the very people who were charged with protecting us from systemic risk had been converted to the gospel of risk-taking. They believed, or were paid to believe, that government had no business regulating the mortgage industry, that there was no housing bubble, that everything was fine. Furthermore, it’s criminal that these obvious problems still have not been fixed. What are we waiting for? Hold that thought because Barney Frank, chairman of the House Financial Services Committee, comes off in this film like the people’s choice for president. What about Fannie and Freddie? Wasn’t it Barney Frank who said no when President Bush wanted to turn them over to Treasury? And why? Because there wasn’t a problem, and because he wanted, in his words, “to roll the dice.” Or maybe because Fannie and Freddy paid for his political campaigns.

Professor John Campbell, Chairman of the Economics department at Harvard University, is roasted over a slow spit for his policy that academics do are not required to disclose “as conflicts of interest” any paid consulting work they do for the financial industry. Columbia Professor Frederic Mishkin is portrayed as a literally babbling idiot over the same issues in his work. We are told that economics professors paid to conduct research by banks are on a moral par with doctors paid by drug companies to write prescriptions. And we are allowed to believe that finance is the only, or at least the most evil, industry partner to academia. In a class by itself.

I would like to point out that last Wednesday, British Petroleum alone announced a single new research initiative promising $500 million to study the impact of their latest oil spill. This is one company, not an industry. One initiative, not their whole budget. The $100,000 that Columbia GSB Dean Hubbard was paid to testify as an expert at Ralph Cioffi’s trial pales in comparison. There is a story out there to tell about industry and academia, but this is not that story, and it is not told truthfully in this movie.

Even on its own terms, the film makes some odd choices. It paints Hank Paulson as an evil mastermind of deregulation who never left Wall Street. But the same Hank Paulson is accused, as Treasury Secretary, of the premeditated murder of Lehman Brothers deliberately “in order to calm the markets.” Let’s suppose the portrayal is accurate. Personally, I tend to agree, but I would like a little more convincing. If he’s so in touch with Wall Street, how does he miss the fact that everyone expected him to bail the Firm out? If he’s so laissez-faire, how can he step in to deliberately kill one of the biggest investment banks in the world? And how could he follow that up with TARP?

I found myself wondering more than once whether the criterion for being a good guy was whether you looked good on film. I would say that the timing of the film’s release, a month before midterm elections, is baldly cynical, except that Congress really doesn’t get much heat. The timing is cynical for a different reason: October is the best month to release a film if you want to win an Oscar. Otherwise the voting members of the Academy forget about you.

This film is destined for critical and commercial success. That’s all it was meant for, and ultimately, that’s my only real disappointment. Because occasionally a documentary comes along with the clarity, vision and purpose to change people’s minds. “Inside Job” is not that documentary.

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