I think that the film provides a well-detailed and comprehensive analysis of the causes of the global financial crisis. Ferguson says that at a figure of $20 trillion, the financial crisis almost lead to another great depression akin to the 1929 depression. There is a global connection to the crisis that spans geography. The crisis extends from the United States, China, France, Singapore, Iceland and England. Ferguson uses research from politicians, journalists, scholars and financial insiders to present a mind-blowing assessment of the financial crisis. Ferguson’s documentary the Inside Job is an accurate depiction of the causes of the financial meltdown that plunged the world in 2008. By all accounts, the film is imbued with factual reasoning, rational logic, and accurate assessment of facts. I am pleased with Ferguson’s attempt to explore the conglomeration of factors that caused the great recession of the twenty first century. Although I found the film a little on the tetchy, I still resonated well with the layout of the arguments and facts presented. By the end of the five phases of the film, I was convinced that nothing but greed caused the financial meltdown.
Perhaps the biggest question I asked myself was the reason the movie left a lingering feeling of disparity and melancholy. Could this be Ferguson’s strategy to confront our fears leaving on ambivalence on our love affair with capitalism? Probably, the biggest argument that the film makes is that there is a resolute lack of trust in the Global financial system and that the world has become a man eat man society where free enterprise is clouded with deception, corruption, and unchecked and immoral corruption all in pursuit of profit. Alarmingly, the film makes a case the financial crisis of the last five years was a function of a combination of legal practices engineered with career sadists. There was nothing illegal that the individuals committed- it was all by the book; except the part of morality. The existence of legal loopholes provided a breeding ground for Wall street financial gurus to take advantage of the poor and lampoon the American poor into foreclosures, joblessness, homelessness, and depression. I think the argument that Ferguson attempts to make preemptively is that affirms that regulation is needed for the uttermost success of the economy. The financial system requires some regulation and not the laissez-faire system that has been perpetuated since the end days of reganomics.
Ferguson also makes a case that the American house market success in the early 2000’s was a bubble. It did not exist. The collapse of the Lehman Bros and AIG banks was a death nail to the bubble. It was the coronation of a bad king born illegitimately by an amorous old king. The belief that the merging of small banks into super big financial corporations would thwart any attempts of collapse was a failure and so was the belief that regulation was injurious to the financial system. The absence of small financial institutions leads to the growth of international money laundering criminal organizations that were quick to make use of the unsuspecting customers. While this was happening, the CEO’s were on a successful game hunt each with his own share of big game. For example, Larry Summers pocketed $ 20 million as adviser to some nonexistent hedge fund. Pathetically, The CEO of the falling AIG took off with $ 315,000 that of Lehman gluttonously grabbed $ 315 million. Even fired victims such as Merill’s former chief executive who pocketed $ 161, million.
Ferguson also says that the financial crisis was not only a function of greed but also of total disregard for the rules of financial institutions. Banks ignored bad mortgages that were bundles and sold to the failing investment banks. Leading financial stakeholders such as Goldman, Lehman and Merril were key opponents of streamlining the financial sector. With the absence of regulations, Wall Street become a money making machine. Members of this secluded club owned villas, shops, women and all the luxuries they could afford. In simple words, there was never the word lack.
Ferguson also says that the lack of character infected even rating companies. Rating agencies consistently rated Lehman as a sound company even when it was clear that the corporation was headed for failure. Business schools were party to business deals because the professors consulted with companies such as Met Life, Larry Summers, and others. I think that Ferguson was brave enough to tackle the integrity of the professors by tasking them with explaining their point of view on issues on the allegations. In the film, Ferguson treats the members of the academia with contempt and disregard for the role in the financial crisis. It is absurd and sickening to realize that members of the academia, who by virtue of their integrity, would be swindled into writing papers for the sake of supporting crooked policies that harmed rather than build the public.
Let us relate the economic crisis as depicted in the movie to real life situation. Currently, the dollar’s decreasing value in the last few years even as foreign currencies such as the Euro and others appreciate has made American real estate investment attractive for foreign investors. Miami the sub tropical city of South East United States has been the center of investment for foreign real estate investors. While many foreign investors have been from the neighboring states of Latin America such as Venezuela, Brazil, and Mexico and Russia, a new group of investors has been slithering into Miami’s real estate industry. Although relatively unnoticed, Chinese investors and Canadian investors have become the new investors in town. The Chinese and Canadian homeowners from South Florida and other regions in the USA are making use low home prices in the USA, reduced competitions from American citizens and favorable exchange rates to own homes in the United States, and the reason is straightforward, someone did not care about American welfare and made the economy fall.
The global economy works like a domino effect. A crisis at the epicenter of the world’s economy quickly degenerates to the other centers of the globe. This is what happened with world’s financial crisis that originated from the United States and affected countries as far as the China and Singapore. The U.S housing market bubble deflated the financial strengths of the entire global economy. The speed at which the Chinese economy was growing at the rate of almost 13 percent was reduced to a distant 6 percent. The same was with Singapore that is a heavy export oriented economy. The fact the US economy was dwindling meant that Singapore would not export as much as did before the US. Many other countries were affected in similar ways.
In my view, the ongoing financial crisis will be recorded in the annals of history as one of the most cancerous attacks on modern capitalism. The ever-surging difficulty by financial authorities of leading economies and institutions to combat to the side effects of bad banking and financial practices is harmful for the future generation. I think that the current institutional organizations of the financial markets and the free and unchecked capitalist system have reduced to large extend the role of governments. Stabilizing the economic environment becomes a daunting task and makes the public the losers. The problem like Ferguson points out, is that the system favors small section of the population instead of the masses. If globalization is designed for this purpose, then its rationality is on trial.
