The documentary Inside Job retraces the origins of 2008 economic and financial crisis, analyzing the mechanisms and processes that since the 80s laid the foundation for this global crisis, and trying to flush out the guilties.
Deregulation of the banking and financial system, corruption and criminality, greed, links between the main financial actors and centers of political power: Charles Ferguson, Inside Job‘s director and producer, promotes these factors as the main causes of the still current crisis.
Particular attention is devoted to the problem of lack of control of the financial market and its instruments.
Relevant is the comparison with the situation inmediately after the Great Depression, when the system was controlled, banks were local and investment banks were small entity in which each member directly controlled its money. In these years there wasn’t financial crisis, at least until the early 80’s, when the Reagan administration decided to deregulate the financial market by making public the investment banks, causing the explosion of the financial industry and the creation of a few giant financial entities which accumulated all the power in their hands. From the point of view of the narrator, it all began as a result of this decision, which was then carried out by successive Presidents Clinton, Bush, up to the current Obama.
The question is: why?
“Between 1998 and 2008, the finance company has spent about $ 5 million in lobbying and contributions to political campaigns“, says Inside Job, emphasizing the excessive influence exercised by the financial crisis on the political world as well as on that of academic economics, where deans and teachers of the major American universities are often financial consultants of the most important investment banks.
In this background, you must added the enormous interests and the enormous greed of the protagonists of the crisis, from investment banks to financial conglomerates, up to insurance and rating agencies.
The excess, lack of boundaries, and the perception of risk obscured by the huge profits pocketed are the “psychological” causes that led few people to enrich themselves in a global market betting on the ruin of others, without even thinking of the consequences.
“Nothing happens without consequences”, says the narrator at the beginning of the movie.
But the last paradox of this whole situation is that the only ones not affected too much by these consequences were people who have embarked the crisis with risky operations: “the men and institutions that caused the crisis are still in power”.
Written for the Globalization’s class, taught by Juan Llobell Buigues