I saw Inside Job a couple of days ago, a documentary about the economic crisis and subsequent bail out. It marches us through the grim landscape of deregulation of banks and derivatives, the subprime mortgage boom, the bundling of these lousy loans into AAA CDOs, the insuring of these junk investments, the bursting of the bubble and the government bailout. It also names names along the way, putting the responsibility of all this on specific bankers, presidents, treasury secretaries, Federal Reserve chairs, rating agency CEOs, etc. It interviews as many of these crisis architects as possible and although most of them declined to be interviewed it captures them in congressional testimony clips. The arrogance, mendacity, and hubris of some are breath-taking.
Adding to the picture is that those most responsible for bringing us to the brink are now enjoying the yachts purchased during the boom, hundred million dollar severance packages, lucrative consulting contracts or federal government appointments; in some cases all four.
The past three administrations have participated in this either through deregulation, lack of enforcement of existing laws, overlooking exchange violations and unethical behavior. All three administrations have appointed the CEOs of the investment and banking industry to cabinet and Federal Reserve positions. Legislation to fix the underlying problem — the banking and investment industry’s taking unregulated, undisclosed and deceptive risk with other people’s money and no skin in the game of their own – has not and will not pass.
I had to force myself to go to this movie because I knew I would be upset by it and I was. I needed to see it, however, to be informed, and so does everyone else.