Wall Street, the heart of the global financial meltdown.
When Michael Moore made his debut feature, Roger and Me, he set about vilifying the boss of General Motors, the now deceased Roger B Smith, for destroying his home town of Flint, Michigan. Charles Ferguson’s film Inside Job attempts to blame a wider cast list for the banking crash of 2008 and explains why so little has been done to reform the financial world or bring criminal prosecutions against the main protagonists.
His villainous lineup includes bankers, politicians (many of whom were previously bankers), regulators, the credit ratings agencies and academics. When Glenn Hubbard, George Bush’s chief economic adviser and dean of Columbia Business School, is shown as a partisan advocate of deregulation, we have one of the movie’s punch-the-air moments. During the interview, Hubbard, who denies he was corrupted by his paid-for relationships with government, angrily barks: “You’ve got five minutes, mister. Give it your best shot.”
The spotlight has largely bypassed academics in the UK. There are plenty of economists who believed the banks understood what they were doing and supported deregulation. Whether they took large slugs of cash for writing poorly researched, cheerleading reports on the economic miracle in Iceland (pre-crash), as former US central bankerFrederic Mishkin is found doing, is less clear. Over here, the relationship between academia and business appears to be more arm’s length, though London Business School dean Sir Andrew Likierman sits on the Barclays board, while Howard Davies, who argued for light-touch regulation while head of the Financial Services Authority, has become director of the London School of Economics. The UK’s chief villian, however, is probably the disgraced, but largely unpunished, banker Sir Fred Goodwin, the former boss of Royal Bank of Scotland, once the fifth-largest bank in the world.
why was this never followed up??
why was this never followed up? (we are living in a criminal’s world)
In Inside Job, the name that keeps cropping up is Larry Summers, a friend of President Bill Clinton and more recently Barack Obama. Summers exemplifies the links between cheerleaders in academia, Wall Street, supine regulators and an ignorant Capitol Hill that Ferguson stresses were at the root of the problem. It helps that Summers looks like a mafia boss, but the difficulties in making the case against him are shown by the need to explain financial products like credit default swaps and how securitisation was used by banks to increase their borrowing.
Still, no matter how much it is explained, the general public is not going to understand. How does one go into battle yelling slogans about credit default swaps? The bankers know ignorance is their trump card. Maybe Inside Job will make us more savvy in time for the next crash??