Most films geared to young boys bank on them coming back time after time to watch their favorite action heroes take on the forces of evil. Adults are usually good with one viewing. But after seeing a new documentary, Inside Job, that uncovers how a group of “evil doers” tanked the global financial system I think the post-adolescent crowd finally has a multiple must see.
It’s a densely packed film that methodically lays out the, who, what, when and where of the ultimate bank job. “My first choice for a title was Bank Job, but that was taken,” said filmmaker, Charles Ferguson.
Ferguson’s film is not peopled with a group of charming rogues like the Lavender Hill Mob or sexy, populist, anti heroes like Dillinger who held up one bank at a time. His characters are the pillars of Wall Street, the banks, analysts, ratings agencies, the regulators, and their lackeys in Congress and academia who together tunneled into the banking system and made off with all the loot. The response to this calamity was to engineer a shake down of taxpayers and depositors in order to fill the banks back up so this gang can do it again.
So far only one the pillars of the financial community has been charged, the former CEO of Countrywide Financial, Angelo Mozilla. “He’s only being charged with civil fraud not criminal fraud,” said Ferguson.
Ferguson believes the Securities and Exchange Commission (SEC) zeroed in on Mozilla because what he did was “so egregious and he’s not connected.” Mozilla spent most of his career independent of the large financial institutions and brokerage houses. “Anyone else would be able to apply pressure,” from powerful friends.
That’s not to say others shouldn’t be doing the perp walk.
“Many people knew this (the financial boom) was going to end badly,” said Ferguson, “and their financial behavior suggests that.”
At the same time they touted the shares of their firms they weren’t investing their own money in the companies.
“They took out hundreds of millions of dollars, much of it in cash,” said Ferguson. These actions constitute, “potentially both civil and criminal fraud.”
There’s nothing stopping the SEC from going after these guys but, “for anything else to happen would be due to public pressure,” said Ferguson.
Right now the vocal pressure for reform, however misguided, is coming from the Tea Party whose members the Republican Party hopes will support its recently announced “Pledge to America.” This platform is what a friend used to call, “the same old sandwich,” a retread of the same policies that party stalwarts have championed for years -- tax cuts, a spending freeze, rolling back health care reform, missile defense and a raid on Social Security as the prescription for what ails the country. There’s no mention in their manifesto of any financial regulatory reform let alone a call to lock up the malefactors who took down the system while lining their own pockets.
They also fail to point out that America’s financial system, once the world’s gold standard (no pun intended), is no longer trusted.
“If you talk to people in Europe, Asia and Latin America, they don’t take seriously what America’s bankers have to say,” said Ferguson.
These countries, all with vibrant, growing economies are looking for other places to put their money besides Wall Street.
“It will reduce the amount of investments and will have an enormous impact on America. America’s impact is declining,” warned Ferguson.
This wasn’t the first time an economy has melted down. The world has experienced numerous financial crashes over the last several centuries, according to Carmen Reinhart and Kenneth Rogoff who took the long view in their book, This Time Is Different: Eight Centuries of Financial Folly. What they found was as far back as the 1300s elements like rapid deregulation and real estate bubbles coupled with arrogance and ignorance were the sparks that set fire to an economy.
Ferguson agrees with the authors who say that these calamities can be avoided if politicians and regulators step in. “If we don’t fix this it’s going to happen again.”
It’s up to us to apply the pressure. First step. Go see Inside Job. Bring your friends and better yet, bring someone who doesn’t agree with you. Then see it again and bring some more people.
Then let your legislators know that you don’t want any silly, faux fixes you want them to really put some teeth in regulations. Demand someone like Elizabeth Warren be appointed at the SEC and at Treasury and that the ratings agencies be held accountable. And while you’re working yourself up into high umbrage tell them to appoint a special prosecutor and put some of the financial system arsonists behind bars. Nothing like the threat of serious jail time to shake things up in the Hamptons. It’s not going happen without you. Ferguson’s done his job, now it’s up to the rest of us.
The Inside Job narrated by actor Matt Damon, opens on October 8th in New York and a week later - October 15th - in Los Angeles. Then rolls out to additional cities - Chicago, Boston, San Francisco staring Oct 22nd.
To track the financial collapse, follow these links:
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