Finally got to see the Oscar-winning documentary Inside Job last night. When you hear that phrase, you normally think “bank robbery”, and you’d be right on the (ahem) money if you did. The problem is that the crooks did it in broad daylight while the security guards sat on their hands…or more likely, their wallets.
I avoid politics in this blog as much as possible, so in case anyone is reading anything into my intentions let me clearly state that this is not a Democrat vs. Republican argument – clearly both sides were complicit, ignorant, or both. But it’s absolutely frightening to consider that people elected to the public trust could not figure out that this Ponzi scheme of predatory lending coupled with betting the house on its failure would only lead to the inside investors getting ridiculously wealthy on the backs of millions of people who thought they were protected by institutions like The Securities and Exchange Commission…and their own government.
Simple math will tell you that if you inflate the value of a house to twice its realistic value and then let someone borrow 95% of that amount, that person only has at best a 5% equity stake in the property. Drop the house value a mere 10% – still 90% overvalued, mind you – and now the person owes more money on the house than it’s sellable for. Drop that value down 50% and the owners are in a hole they can’t escape from unless they forfeit the house and everything else they own and declare bankruptcy. And then the banks can write another mortgage on the reclaimed property and leave that owner in a grave.
That’s not to say that individual greed didn’t fuel the economic collapse. Bankers and traders funneled absurd amounts of cash up their noses and down their throats, while people barely out of college were buying homes for hundreds of thousands of dollars and living way beyond their means. A shell game is just that – there’s only one marble, and when it moves somewhere the others are left empty. If someone is raking in millions of dollars, someone else is losing that same amount. Had an accountant tried this at a small company they would be fired and jailed; a student who crafted this as their Doctoral thesis for economic solvency would flunk out of school.
The fact that no one from a major bank, insurance firm or investment house went to prison is far more frustrating than watching athletes and celebretards skate free for crimes you and I would do hard time for. Groups of people who live beyond the law brazenly raped and pillaged millions of people, paid comparatively tiny fines and were able to do so without admitting wrongdoing. Inside Job is a collection of interviews and media clips covering the global economic collapse, and who is willing to speak is almost as interesting as who isn’t. In particular, you will come away looking at Eliot Spitzer in a whole different light and start to wonder whether his fall from grace was engineered for a bigger reason than you thought.
Although the film is obviously targeting one point of view, Matt Damon’s narration of filmmaker Charles Ferguson’s script is even-keeled. There’s no need for hysterical pitch and emphasis when the horror speaks for itself.