Inside Job: lessons to be learned?
Last night I went to see the Oscar winning documentary, Inside Job. Wow! Some movie – an absolute shocker. It is a brilliant account of who was to blame for the woeful behaviour of the great global financial houses in the build up to the great “meltdown” to 2008. In short, think of a Wall Street name and they were all at it.
The invention of derivatives, and bundles of debt instruments that in some way left everyone (except the poor benighted American house buyer) an eternal winner was both hatched and encouraged by individuals and companies whose names are watchwords in the world of finance. And I use the present tense, because as the film deftly displays, they are all still there, in the engine room and at the helm of the global financial machine.
Few escape blame, but Alan Greenspan, Larry Summers, Timothy Geithner, and so many others are identified by name. Many refused to be interviewed for the film, but many agreed and then sat in front of the camera crucifying themselves.Above all there were two areas of revealing compromise. Firstly the extent to which the AAA rating agencies are completely in bed with the companies they rate. Secondly that a cascade of the great “Ivy League” University Economics Professors are being paid millions by corporate America both to advise and to sit on their boards. According to the film, Harvard, Columbia, and other business schools have no regulatory system for monitoring these potential conflicts of interest.
The film sets out case after case of what it describes as gross criminality by known names, against whom no action has ever been taken. This is a completely ‘must see’ movie. But more, in this British Budget week, some may see it as a call to arms.
This is not just an American affair, this is global. In effect, the film demonstrates that no meaningful action has been taken to stop it happening all over again. Worse, that many of the agents of what went wrong, still have their hands on the major levers of global financial management.
Related posts:
- My FOI request on the FSA threw up SFA
- Merrill trader: story of the world that led to 2008 crash
- One year on, Lehman Brothers still haunts us
- Inside the forbidden garden
- Standing on Abraham Lincoln's shoulders
There are 21 comments on this post
Loved the film, but flawed – not at all sure about the IMF being painted as the ‘good guys’.
What they did was fraud and fraud is a crime for which perpetrators are sent to long years in prison. If they are charged and indicted. What nobody is asking is why are they not been charged and indicted.
Marverde i have been asking that since the crisis evolved.Nick Leeson , an underling was prosecuted for the collapse of Barings.Why no big names.
The argument that they will move their business elsewhere,that we rely on their taxes , means some criminals are more important than others.
They are still at their despicable deals and shoddy bonuses.
The British government is in a great position to make a stand .We through them own two international banks.Let the others please themselves and with those two banks and our building societies run our own affairs.Prosecute anyone we can blame for the crisis in this country,and see what happens
A decent film and certainly worth a viewing. However, there are better books on the subject. Try reading :-
The Big Short : Michael Lewis (a brilliant page turner)
Whoops ! : John Lanchester (good on the history of it all)
Fools Gold : Gillian Tett (the only British journo worth her salt).
But Jon, you forgot to mention your own trade in the roll of shame. Where were you journos/hacks while all this was going on ? Were you all so totally unaware ? It’s all very well crying foul after the event, but why weren’t you digging while it was all going on ? Was it all a bit complicated for you ?
Gillian Tett smelt a rat and wrote about it AT THE TIME. Robert Peston made a name for himself by saying that “somebody should have shut that door”, AFTER the event.
How naff is that ?
For the ‘where were the journalists?’ question, allow me to add Nick Davies ‘Flat Earth News’ to your roll call of books.
Media organisations everywhere rely less and less on their own writers, and more and more on wire copy from two agencies, Reuters and Associated Press and on PR companies who syndicate content via Reuters and APS. A study by Cardiff University’s Journalism faculty showed that 80% of content in the UK’s top five quality newspapers comes from these two sources, so, to answer your question, the journalists were busy re-writing press releases from the institutions they should have been investigating.
Have a look at http://www.churnalism.com
Thanks for the link Tom, it looks like great fun. Watch out Snow, I’m coming after you :0)
I’d read about “churnalism” a couple of weeks ago. It’s all very dispiriting. I’m begining to see why there are so many conspiricy nutters about.
Only the perpetrators of these grossly irresponsible acts need to learn the lessons. The rest of us, meekly or impotently, just reap the whirlwind. The only way to ensure the criminals among them understand their responsibilities is to hit their pockets, their liberty and their future capacity to re-offend. In other words, serious fines, prosecutions/imprisonment, and total bans on working in the financial sector ever again.
Now, tell me who among those who could take such action has actually got the will to do it? Answers on a postcard …
If you bother to read any of the books that I listed Annie you might draw a slightly different conclusion.
Does the Las Vegas table dancer who is trying to service 5 mortgages need to learn any lessons. Or how about the New York *nanny* trying to service a mere 3 mortgages. Or the mind numbingly stupid politicians and regulators who gave the banks every single thing thay asked for and were too afraid to stamp on the ridiculous property bubble, and spoil the party.
But let’s not forget our glorious investigative journos. Who did precisely… not much. At least not much investigating until after the event.
It’s so much easier, and cheaper, to peddle Westminster tittle-tattle than work for a living.
Read the books (especially the 1st) if only because they’re a good read.
Thanks, TRON, I’ll see if our little library has got them or can order. I do feel for those mortgage-holders you mention who got sucked in, it’s tragic.
TRON. I like it :0)
Dig out the books. You’ll enjoy them, and learn about the financial mechanisms that brought it all about. They aren’t complicated to understand, so ignore mugs like Robert Peston when he tries to tell us that they are.
As for the mortgage-holders (big and multi). Maybe people should only borrow as much as they can afford, or feel comfortable with. It’s just a shame that interest rates are now having to be held artifiicaly low in order to prevent a wave of repossesions. Especially if you are an OAP and relying on the interest from cash savings to supplement your pension.
That’s me done. Over-and-out.
Is It a flim which will make any difference to the financial institutions?
As it is designed to inform as well as provide entertainment wil that information enable the public to put on pressure?
Jon it was obvious working entertainment ; do you ever stop? were you in the office on Sunday or was the Japanese diary session prerecorded? Very good programme.
…and our boy blunder, Cameron, is throwing away more of our money on a Libyan tribal adventure.
He lacks the courage to do what is needed to uber fat cats. He is to economics what Nero was to firefighting!
What a disappointment.
I disagree over Libya.
Cameron may be trying to create more money by stabilising MENA – although it’s too early to say just yet if he will succeed.
No politician will go after the banks. The banks are the ones who finance the politicians. Politicians are acutely aware of this fact and do their best to stabilise the market.
I agree with you about Cameron lacking courage to face the money men. It takes a person with vision, creativity and courage to draw a real lifeline from the people.
Great analogy, btw
Moon beach , dead correct.Cameron is another silky smooth Blair ,who thinks he will win International Brownie points for his leadership over Libya.Look at that all talk Obama , who hasn’t the guts to do anything except behind others.Probably all in the pockets of the bankers and the oil men.
He dare not even give us what he promised over Europe.He does not represent the people.Next time i will only vote for a candidate who promises the referendum we need on Europe.
We Brits are all good at righteous indignation, but unless co-ordinated action is taken by the US, Swiss, French, Germans,Japanese, Hong Kong, Singapore, just doing something in the UK will impoverish us and enrich one or more of them. I wonder how many people who are indignant about the banks’ behaviour have switched their accounts to say the Co-op bank or a traditional building society like Nationwide? Ordinary people like you & me can only change things like this if loads of us (a) switch away from the big banks into other institutions & tell the banks why we’ve done it and (b) vote for political parties (or set them up & stand for election ourselves) which will promise (& I don’t mean a Clegg-style promise) to take action against the banks, not just in the UK but on a multilateral basis.
Philip for once i agree with you
You are right about citizens taking action by moving their accounts but i dont think we would need co-ordinated action by all the govts you mentioned. If 2 or 3 took action I think most others would have the courage to follow, therefore leaving the banks with few options.
Sadly, i dont think our govt of millionnaires bred from the banking/stockbroker classes is going to upset its chums. The US leading the way is our only hope to bring these crims to justice or at least curb their activities.
”This is not just an ‘American affair’, this is global. In effect, the film demonstrates that no meaningful action has been taken to stop it happening all over again. ”
In short the film tells virtually nothing that was not known before . The System is corrupt etc – what a surprise . It is in fact rotten thro and thro – and nothing will be done to change that . People still believe the lies of politicians – and if there was an election in UK in morning – the whole charade would be gone thro again – interviews , leaders debates – lies and more lies .
Why does not C4 interview Cameron , Clegg etc about what they have done – and are now doing – and when they are in studio – compare that with what they said beore the election ?.
And was a new war on the agenda – and maybe / certainly a bigger one on the horizon ?.
Save your money – and have a pint . Oh Yeah – and Comic Relief raised a £ 100 million – the banks got Trillions – - but they are gifted people , talented . IMO – the people get what they deserve .
Well, the-Richard-of-Nottingham, perhaps we could do with a John Pilger , although I’m not sure if even he was saying much at the time.
I really don’t see anyone controlling the banks – they’re obviously more powerful than any government. You only have to see what’s currently going on. RBS, 80% or so owned by Joe Public, makes a loss and goes ahead and pays bonuses of over 1 million pounds to over 100 employees! If that isn’t saying “get stuffed, we’ll do as we please”, I really don’t know what is. And nil response from the Government – see what I mean?
Right on, Philip!
Hope to be seeing the film this Thursday. Meantime, Gillian Tett – mentioned by Nottingham’s Richard – is indeed a great economics journalist in the only meaningful sense of the word: challenging/analysing the economic status quo (she has a background in anthropology, ie observation, amongst other things).
Thank you for your Tsunami Diary. A moving and poignant commentary even without the words – except for the woman asking if you’d seen her husband, the haunting surreal playing of ‘Yesterday’, and the gentle interview with the older women in the shelter.
Meantime, another couple of links re NHS: ‘Andrew Lansley accused of burying poll showing record satisfaction with NHS’: http://t.co/V3Q2F (Guardian) and ‘David Cameron’s health reforms risk destroying the NHS, says Tory doctor’ – (Telegraph): http://t.co/viz92mt.