My Amazon DVD Reviews: "Inside Job"

It will take decades to undo this damage  
5 Out Of 5 Stars

A few years ago, I watched the documentary "The Smartest Guys In The Room," about how Enron systematically duped the system, employees and the public into believing their fraudulent practices were a legitimate business. In 2005, they went from the USA's seventh largest company to bankruptcy, leaving a trail of death, debt and broke employees while the principles scooted away with the bulk of their fortunes. It was revealing to watch how they cozied up to presidents, regulators, and essentially eliminated anyone that caught on to the giant ponzi scheme the company was. I watched and wondered, how did they get away with this, and could we stop it from ever happening again. The Oscar Winning "Inside Job" answers that creeps like Ken Lay and Jeff Skilling were only the tip of the iceberg.

"Inside Job" takes an in-depth look at how, starting with Reagan and continuing with President Obama, the financial pirates of Wall Street bought their way into massive paper fortunes, played the markets like parlor games and then got the world to buy them free passes when the house of cards came down. Narrated by Matt Damon, featuring plenty of interviews by several key government players, including Elliott Spitzer and Barney Frank (who, the film does NOT mention, voted for the "Commodity Futures Modernization Act of 2000", which is a key bill in the slippery slope). Several of the key Government types get sudden convenient cases of memory loss when pressed for certain details that they were intricately involved in (see the financial lobbyist who gives his Wall Street masters a 'B' grade for their handling of the collapse), and how major ratings firms suddenly turn their respected viewpoints of Triple A commodities ratings for companies on the verge of collapse into "it's just an opinion."

Nobody, left or right, gets out unscathed. Reagan gets first whacks for elimination of regulatory agencies, put in Alan Greenspan as his ideological watch-dog, and opened the world up to Savings and Loans. It took about nine years for them to collapse (under Bush One), so Wall Street had to come up with something new. That became derivatives, which Clinton legalized despite strong strong objections (and the person objecting is told firmly to keep her mouth shut) under Graham/Leach in '99 and effectively repealing the Glass-Steagall act from The Depression. With all the regulatory firewalls removed, banks could now effectively make a poorly advised loan, bundle it to a whole bunch of risky loans, sell this to someone else, then that group could sell it up the chain, with the complicity of the bonding agencies that gave these ticking time bombs triple A ratings.

When it comes to deregulating, though, nobody did it better than Bush the second. In 2004, he got the Securities and Exchange Commission to drop regulations against predatory lending, unleashing a new wave of sub-prime lending to the poor even if it was obvious that the loans wouldn't be repayable. Just bundle it into securities/assets, sell it and the risk belonged to someone else. By 2004, banks could leverage funds beyond their wildest dreams, so they did; some up to 33 times their available cash. Then came the biggest hit of all, the watchdog arm of the SEC was cut to a single employee. In an industry that has 5 lobbyists for each elected official, there was only one person left to investigate wrongdoing.

"Inside Job" also tackles the thorny issue of morality; when is too much not enough? Banks began to figure out that these bundled securities weren't going to be able to withstand the market much longer, they insured themselves against their failure then sold them even harder to drive the profits up before the explosion. They could profit now, success or failure, and things began to resemble a competition. Who has the most jets? Who has the most houses? Who has a private elevator that no-one else can use? So when the explosion came, starting with Bear Stearns in Spring 2007, the bankers had already covered their own behinds. And again, thanks to Bush Two, when the bankers realized the house of cards was about to enter meltdown, when they came crying to the government with their hands out, AIG and Goldman Sachs got 100 cents on the dollar. No risk, all reward.

President Obama fairs little better. He is criticized for putting the same old robber-barons in place (Tim Geithner, Larry Summers) and not pushing for tougher regulations post-crash. Even scarier is how these old hands are now advisers to business schools AND financial groups, which means the same flawed rules they played by to create this septic situation are being bought and paid for by financial institutions and taught and sold for by educational institutions. That is what is so maddening and ultimately depressing bout "Inside Job." While Enron (and folks like Bernie Madoff, Bernard Ebbers (MCI), Allen Stanford and his ilk) give you a convenient and singular target, "Inside Job" shows just how spread the dominoes are, and just how eager most of the players are to reset the table just as it was before.