I really wanted to love Inside Job, the film that won the Academy award this year for best documentary. And it is a great film, but to see it that way you have to turn your brain “off” even as you push the “on” button on your DVD clicker. The interviews are personal and interesting. The footage of Wall Street and the offices of big players in the world of finance are absolutely gripping. The narrative has energy that pushes this two-hour film forward. It is easy to watch and tells a great story.
Sadly, the filmmakers themselves were hunting for something they did not find. And they did not find it because it is mostly not there. They had decided that the story of the boom of the 2000s and the bust of 2008 was a story of scandal and rampant criminality that purposely sucked away resources from the middle class and the poor to feed the lifestyles of the big shots in high finance. They wanted to find those white-collar criminals who made this whole thing happen and make a case for why they should all be rounded up and jailed.
What they found instead – though they apparently never realized this – was a bunch of interesting and smart people who had mastered the art of chasing prices and chasing paper up during the boom times and down again during the bust times. That’s what entrepreneurs do. If they aren’t going to do that, they could go into some other profession. This isn’t criminality. This riding the business-cycle wave. The problems they are looking for are deeply embedded in the system. They are structural, not personal. If criminals exist in this story, they are most likely to be found within the halls of government. But those people are rather inaccessible whereas the private traders are happy to go on camera.
The biggest problem was that the narrative never asked where all these paper profits were coming from. The monetary angle eluded them completely. The filmmakers missed this structural point because they decided at the outset to trace our problems all the way back to the “eighties.” Now, in the vocabulary of the left, the “eighties” is a curse word. It means Reagan, which means evil. It means capitalism, greed, the rich getting richer, and all the other political cliches we know so well. So rather than looking carefully at the monetary system that generated all this paper, they filmmakers looked to presidents and their great black beast of “deregulation.”
Contrast this point of view with the wonderful speech of David Stockman at the ASC the other day. He was just as passionate about the corruption generated by the system but he found the source in the end of the gold standard. He had a coherent theory that allowed him to see, understand, and explain the world coherently.
The makers of “Inside Job,” by contrast, were all over the place. They are against the boom. But they are against the bust too. They are against the bailouts. But they are against failing to bailout too. They are against housing subsidies. But they are against rationing housing too. They are against the government. But they are against private finance also. Most absurdly, they demand government controls over finance but their own film demonstrates that government is largely captured by private financial interests. They are reduced to looking for ghosts and wishing upon stars.
They end with a demand for people to be locked up, not people in government (I’m all ears on that) but rather people in investment banking, though it it not clear what they did wrong. The worst crime that the film can drag up is how traders were both denouncing certain kinds of commercial paper as junk even as they pushed it on buyers. But look: this shows you what is so wrong about inflated markets. They make junk profitable and depreciate quality as unprofitable. It’s an upside down world when the Fed and moral hazard take over. There really is not contradiction in seeing certain investment vehicles are pure trash even as you sincerely see them as good investments.
This film demonstrates all you need to know about the worldview of the American left, and it is completely barren of sound theory. They weave tales of demons all around, even as they lack the intellectual apparatus to understand events rationally. It really is pathetic. This film is a gigantic missed opportunity. They started to tell a good story and instead ended up chasing around ideological conventions and coming up empty handed. That said, if you can provide your own voice overs, Inside Job is worth an evening.