Movie Review: The Warning
Brief Summary of the Video
The video that was selected was entitled “The Warning” featured online through Frontline. It presented relevant concerns about how allowing and promoting unregulated market forces would inevitably result to a devastating financial meltdown. Featured in more than 54 minutes of play time, the video’s main parts included the golden era when Alan Greenspan, known as the rock star, ruled the economy ; how Brooksley Born, a brilliant lawyer, then the head of the CFTC, tried to warn the American public through Congress, of the need to regulate the over the counter derivatives market; and how she was apparently adamantly prevented and stopped from pursuing a recommended financial regulation, which evidently caused the financial chaos .
Important Points and Macroeconomic Significance
The important points in the video included the persistent belief of a few powerful forces in the government, who allegedly were classified as economic experts, to have proposed that the economic model of unrestricted economic regulation should be enforced. Alan Greenspan’s belief, and that which was persistently enforced, was that the market forces should be left alone to take care of itself. As a result, the financial meltdown evidently occurred, despite a warning promulgated early on by Brooksley Born. The macroeconomic significance of this contention was that should Born’s assertion, at that time, been heeded; as reflected by Arthur Levitt, then SEC Chairman, the economic and financial crisis of 2008 would have been significantly prevented; or its devastating global effects could have been mitigated and minimized.
Another point that was presented was the apparent political forces that seemed to downplay and disregard the inputs of others (Born) who seem to oppose the dominant view of the a powerful few (Greenspan, Rubin, Summers, etc.), or members of the President’s Working Group, get to emerge as victorious due to the inability of members of the Congress to know more about relevant details on macroeconomic and financial market forces that affect the economy. This is be an example of groupthink, where the dominant thinking, beliefs and views of a stubborn few could undermine the emergence of contesting views, despite their apparent legitimacy and validity in contentions. As a result, it had to take the actual experience of a breakdown, before Greenspan eventually admitted that there was indeed a flaw to his economic model of allowing market forces to go totally and completely unregulated. Again, the significance of this is in terms of the macroeconomic effect that the concept, despite having exhibited years of success, could still prove erroneous and should therefore be subject to vigilance, monitoring and regulation.
Personal Opinion of the Video
One was amazed at the information that was revealed in the video and became anxious as to the manner by which powerful authorities, who were actually experts in the field of economics, financial management, and public governance, could actually be instrumental in leading to the destruction of the economic and financial condition of a nation. It just goes to prove that there are forces, just like the details of the OTC derivatives and the LTCM, which are so intricate and complex, that their long-term effects could not be evident and immediately predicted. As warned by Born, if the government maintains its stubborn stance to prevent much needed regulations, then, the same errors could be expected to occur repeatedly in the future. This then, is a scary event to anticipate. We should have already learned from this lesson.
Work Cited
"The Warning." 20 October 2009. Frontline. 9 March 2013
