THE BLOG

Go See Inside Job If You Want to Know What Really Caused the Economic Crisis

Oct 23, 2010 | Updated May 25, 2011

Charles Ferguson's latest documentary, Inside Job, does a masterful job in telling the story of how the financial crisis happened. Ferguson details how the financial institutions got greedy and how they convinced our lawmakers to drop regulations that keep your money safe (basically arguing that over-regulation is a bad thing). The financial institutions gambled with your money and lost. But since they were too big to fail, the feds bailed them out. A "no lose" scenario for the financial institutions.

The movie also explains why President Obama isn't putting in place regulations to prevent it from happening again. Basically, many of the same people who caused the problem in the first place are still in charge. So they have not rolled back the regulatory policies to what they were before, and they haven't beefed up enforcement either. No criminal charges have been filed. The rich got richer, everyone else paid the price.

I have previously pointed out that the process used for developing Obama's economic policies would be significantly improved if it were done by an independent team of experts and made available publicly so that other independent experts can comment on them. After seeing this movie, it's clear what would happen if they did as I suggested: independent reviewers would point out that Obama's policies don't solve the problem because they don't restore the financial regulations and oversight that we had in the past, nor do they deal with the new problems that surfaced (e.g., the credit rating agencies are not punished in any way if they give safe ratings to unsafe assets). Obama's policies only deal with the symptoms of the disease, not its cause.

Obama portrayed himself as an agent of change, but this movie makes it clear that it is still business as usual and we are doomed to repeat this disaster.

If you can only see one film this year, this is the movie to see. I cannot recommend this movie highly enough.