The schoolyard bullies need supervision.
Charles Ferguson's Inside Job is strong, fair, and rational. The director
tries mightily to untangle the complex architecture of the financial meltdown
that has cost millions their jobs, their homes, and their savings. If you
consider skipping it because it sounds boring, please think again. My blood is
still boiling.
Why does this
documentary leave us sunk in despair? Because it confirms the certainty that
there is no one left we can trust. The fact that much of what brought the
economy to its knees was legal, not criminal, signals a financial sector run by
ethical nihilists who will pursue every legal loophole to enrich themselves.
Human nature, you say? Then bring back the stringent regulation that gave the
industry forty years of reasonable corporate success before Reagan era
deregulation. The schoolyard bullies need supervision.
America's
bubble of private gain and public loss was pierced by the collapse of Lehman
Bros. and AIG. Banks merged into "too big to fail" behemoths; safeguards were
overturned; regulation of derivatives was banned; This vacuum quickly filled
with money laundering, defrauding of customers, cooking the books, and stuffing
of the pockets of top officers with money. Larry Summers took 20 million as
advisor to a hedge fund. Lehman's CEO took 485 million, the CEO of the failing
AIG 315 million. Fired by Merrill, CEO Stan O'Neal departed with a severance
bonus of 161 million.
When
Mortgages were bundled and sold to the bloated investment banks, lenders no
longer cared if they were repaid. Goldman, Lehman, and Merrill were all players.
Summers, Bernanke, and Geithner all stood against corrective measures and would
play pivotal roles in the Obama administration.
Absent limits
on the impulsive risk takers, Wall Street plunged into personal pleasure. There
was never enough: penthouses on Park, private jets (six for Lehman alone),
vacation homes, art collections, drivers, private elevators, drugs, alcohol,
strip bars, and prostitution - one private supplier within spitting distance of
the stock exchange counted 10,000 men among her customers..
Three ratings
agencies made fortunes bestowing unwarranted ratings right up to two days before
Lehman failed, later testifying before congress that these were merely
"opinions", not guides for investors. The crowning disgrace is the corruption of
the universities. Business school professors consult with companies. Glenn
Hubbard, dean of Columbia Business School, takes $250,000 as a board member of
Met Life. Larry Summers, back at Harvard, continues to rake in consulting and
lecture fees.
The
presidents of Harvard and Columbia refused comment. You will appreciate the
honesty of Raghuram Rajan who wrote strong warnings and French Finance Minister
Christine Lagarde, who spoke with disgust of the debacle.
It used to be
that respected academics could be counted on to be the conscience of democracy.
Now they are reduced to being interchangeable components in the conflict of
interest chain that links business/government/university. Credit Charles
Ferguson with a superb investigation and give thanks that we still have a free
investigative press to wake the sleeping citizenry.
Copyright (c) Illusion