Private Gains/Public Losses: Inside Job-- The Movie

I guess if you just arrived back on earth after hitching a ride on a passing meteorite from Alpha Centauri, you might be unaware that there has been a global financial and economic meltdown taking place-- the cherry on the cake of the right's ascension to power and their anti-regulatory, "greed-is-good" mania. Friday night I went to see the new Charles Ferguson film that puts it all together in a powerfully compelling, stark and ultra-informative documentary. That's the trailer above.

Oscar-nominated Ferguson seamlessly weaves together a narrative that exposes the selfish greed and corruption of Republicans from Reagan to Bush-- without sparing the equally culpable Clinton and his crew of bandits-- while graphically showing the devastation from Iceland to Singapore to Queens. Ferguson, who was brilliant on NPR last week, the reason I accepted the invitation to see the screening:

This film attempts to provide a comprehensive portrayal of an extremely important and timely subject: the worst financial crisis since the Depression, which continues to haunt us via Europe’s debt problems and global financial instability. It was a completely avoidable crisis; indeed for 40 years after the reforms following the Great Depression, the United States did not have a single financial crisis. However, the progressive deregulation of the financial sector since the 1980s gave rise to an increasingly criminal industry, whose “innovations” have produced a succession of financial crises. Each crisis has been worse than the last; and yet, due to the industry’s increasing wealth and power, each crisis has seen few people go to prison. In the case of this crisis, nobody has gone to prison, despite fraud that caused trillions of dollars in losses. I hope that the film, in less than two hours, will enable everyone to understand the fundamental nature and causes of this problem. It is also my hope that, whatever political opinions individual viewers may have, that after seeing this film we can all agree on the importance of restoring honesty and stability to our financial system, and of holding accountable those to destroyed it.

Although France's former Minister of Finance, Christine Lagarde, Trillion Dollar Meltdown author Charles Morris, Eliot Spitzer, and NYU Economics Professor Nouriel Roubini come off as the most astute and penetrating characters in Ferguson's documentary, it is through the interviews with the perpetrators and villains, lured unsuspecting into condemning themselves and their cronies, that one gets the true horror of what has been pulled off against the citizens of this country by the business and political elite. My favorite scumbags-- and, as a firm believer in the death penalty, I heartily disagree with Ferguson that any of these crooks belong in prison-- are Scott Talbot chief lobbyist for the Financial Services Roundtable (Banksters, Inc), Glenn Hubbard, Bush's Chief Economic Advisor and one of the main architects of the great heist, currently disgracing Columbia University as dean of their increasingly untrustworthy and very shady Business School, and the hapless/clueless David McCormick, former Under Secretary for International Affairs at the U.S. Department of Treasury (the guy in the video up top who asks for the filming to be stopped when it finally dawns on him that the movie isn't going to be a toast to the genius of Phil Gramm).

You've probably heard of most of these folks but Ferguson introduces two know are both delightful and previously unknown to the general public: Jonathan Alpert and Kristin Davis. He's a prominent Manhattan psychotherapist to Wall Street executives and to the sex workers they employee. And Kristin (photo above, right)? The former Madam to the investment banker community. Ferguson explores another aspect of the financial meltdown through them, and others: overgrown boys on cocaine trying to prove their dicks are the biggest. They cost the world economy over $20 trillion dollars, made out like bandits, are all still living like kings-- actually better than any king ever did-- and are about to get another huge tax break from their pals the Republicans plus cowardly and corrupt Democrats like John Adler (NJ) and Evan Bayh (IN).



SONY Pictures was kind enough to provide theatergoers with Ferguson's timeline of how deregulation, which Wall Street bribed Congress into providing, led to the development of a toxic Wall Street Culture and the financial collapse:

1930s (post-Great Depression)-1979: Traditional American finance

1933-35: Motivated by financial abuses that contributed to the Great Depression, new laws such as the Glass-Steagall Act and the Securities and Exchange Act place limits on financial risk-taking and require extensive disclosure of financial information

• Bankers/traders earned salaries in line with other professionals; tightly regulated financial sector

1980s: The Reagan Era: laissez-faire and trickle-down economics

• Substantial deregulation, especially the Garn-St. Germain Act which deregulates Savings and Loan companies, leading to the later S&L crisis

• Oliver Stone’s Wall Street immortalized financial sector greed and immorality

• S&L scandal: loose regulations, lax enforcement lead to massive fraud; hundreds of S&Ls fail lax enforcement lead to massive fraud; hundreds of S&Ls fail; $124 billion taxpayer-funded bailout

• Neil Bush approves $100 million of bad loans to business partners through Silverado S&L, which subsequently fails

• 1989: Keating Five: Four senators and CEO Charles Keating accused of improper influence in advocating against investigating Lincoln S&L, which collapses and Keating is convicted of fraud

• 1987-1990: Michael Milken, Ivan Boesky and other Wall Street executives convicted of fraud and insider trading

1990s: Clinton era: increasing revolving door between Washington and Wall Street

• 1999: Clinton administration members with Wall Street backgrounds help pass the Gramm-Leach-Bliley Act, aka the “Citigroup Relief Act,” repealing Glass-Steagall and allowing mergers that create Citigroup

• 1994: A new law gives the Federal Reserve power to regulate the mortgage industry, but Alan Greenspan refuses to enact any regulations, on the grounds that regulation was unnecessary

• 2000: Clinton Administration, particularly Larry Summers, Alan Greenspan and key Congress members including Senator Phil Gramm help enact the Commodity Futures Modernization Act, which bans all regulation of financial derivatives and exempts them from anti-gambling laws

• 2000: Dot-com bubble bursts

• 2000-2002: Eliot Spitzer sues 8 investment banks for conflict of interest and recommending dot-com stocks they thought were junk; reaches settlements totaling $1.4 billion in fines

2000s: George Bush pushes for further deregulation and relaxed enforcement

• 2000-2005: Investigations of Fannie Mae and Freddie Mac reveal massive accounting fraud

• 2002: Arthur Andersen, auditor, convicted of obstruction of justice for shredding Enron documents

• 2003: Worldcom revealed to have inflated assets by $11 billion

• 2000s: new crops of highly complex financial innovations flourish: securitization of mortgages, credit default swaps, synthetic CDOs

• 2000-2007: Fed by the investment banking industry, a massive housing and mortgage credit bubble sweeps the United States; mortgage lending quadruples, housing prices double

• 2004: After intense lobbying by investment banks, the SEC lifts the leverage limits on the investment banking industry, allowing them to borrow more

• 2005: IMF chief economist Raghuram Rajan warns of dangerous incentives and risks in the financial system; Larry Summers dismisses him as a “Luddite”

• 2005-2008: Goldman Sachs, Morgan Stanley, Deutsche Bank and other investment banks begin using credit default swaps to bet against the same mortgage securities that they are selling as extremely safe

• 2006: Hank Paulson, CEO of Goldman Sachs, becomes Treasury Secretary

• 2007: The housing bubble bursts, as the financial sector runs out of people willing to borrow and purchase more housing; home ownership reaches an all-time high, while savings rates are at historic lows

2008: Great Recession begins

• Collapse of Bear Stearns (March) and then Lehman Brothers (September)

• AIG rescued with $85 billion one day after Lehman declares bankruptcy

• Housing prices drop by 32 percent over three-year period

• Record foreclosures

• Unemployment rises from 5% to 10% in one year

• Tens of billions in bailout money go to AIG and Goldman Sachs

• $700 billion emergency bailout for the financial industry

2010s: The Obama era: Business as usual?

• Timothy Geithner becomes Treasury Secretary

• Larry Summers becomes director of the National Economic Council

• President Obama re-appoints Ben Bernanke

• Obama appoints many Wall Street executives to senior regulatory and economic policy positions

No one goes to prison and no one has to give back the ill-gotten gains. Ordinary citizens just have to eat it. And ordinary citizens probably deserve it since they keep reelecting the criminal political class that has made this all possible. Since we're about to go into an election, I thought I'd just mention in passing that there are several politicians up for reelection in November who voted on the Gramm-Leach-Bliley Act that effectively guaranteed the great heist by deregulating Wall Street. In the Senate, which passed it 54-44, every Republican voted YES and every Democrat (other than reactionary Dixiecrat Ernest Hollings of South Carolina) voted NO. Facing the voters in November we find Chuck Grassley (R-IA), and John McCain (R-AZ) on the YES side and Barbara Boxer (D-CA), Russ Feingold (D-WI), Blanche Lincoln (D-AR), Barbara Mikulski (D-MD), Patty Murray (D-WA), Harry Reid (D-NV), Chuck Schumer (D-NY) and Ron Wyden (D-OR), who tried stopping the catastrophic bill from passing. Why so few Republicans left in the Senate? Many of them, like Gramm, left to take get-rich-quick/thank-you jobs with the big banks, lobbyists and Wall Street firms.

It passed the House by far more lopsided numbers, 343-86, 16 Republicans and 86 Democrats (+ Independent then-Rep. Bernie Sanders) voting NO. Among the YES votes were Richard Burr, Jim DeMint and David Vitter, now sleazy and reactionary U.S. Senators seeking reeelction from the Carolinas and Louisiana; Charlie Bass and Steve Chabot (respectively a New Hampshire and an Ohio crook looking for their old jobs back); Roy Blunt and Pat Toomey (uber-corrupt political hacks jonesin' for a promotions to the Senate from Missouri and Pennsylvania); John Boehner, of course who is hoping voters are retarded enough to make him Speaker; Allen Boyd (Blue Dog-FL); Joseph Crowley (an extraordinarily corrupt New York New Dem fast rising in the House Democratic leadership); Nathan Deal and John Kasich (looking for jobs as governors of Georgia and Ohio, where their talents will be appreciated); Dick Armey (currently acting as king of the teabaggers); Rob Portman (whose economic activities have been so destructive to Ohio that he feels he deserves to be the next senator from that freaked out state); and the economic "brains" behind the Republican/Wall Street agenda, Paul Ryan; as well as a slew of the old Wall Street/K Street standbys like David Dreier (R-CA), Ken Calvert (R-CA), Brian Bilbray (R-CA), Steny Hoyer (D-MD), Peter King (R-NY), Steve LaTourette (R-OH), Jerry Lewis (R-CA), Buck McKeon (R-CA), Pete Sessions (R-TX) and Elton Gallegly (R-CA).

Go see the movie. Kenneth Turan summed it up perfectly for the L.A. Times: "It's a powerhouse of a documentary that will leave you both thunderstruck and boiling with rage," as did Roger Ebert (in the Chicago Sun-Times): "A very angry, very carefully argued, brutally clear documentary about how the American financial industry set out deliberately to defraud the ordinary American investor." People who played key roles in the collapse but who refused to appear on camera include Lawrence Summers, Alan Greenspan, Joseph Cassano, Lloyd Blankfein, Robert Rubin, Ben Bernanke, Henry Paulson and Tiny Tim Geithner.