The more I learn how Wall Street influence over Washington has allowed the financial meltdown of 2008 to grow into a worldwide disaster, the harder it gets for me to continue to support President Obama.
Though he campaigned as a champion of Main Street and promised financial market reform and re-regulation, Obama quickly showed that he was really about business as usual — not merely by supporting George W. Bush’s bank bailout and the TARP, but also bringing into his White House the same gang of deregulating crooks and liars who got us into this mess in the first place.
For telling this story in the kind of detail that will make your blood boil, Inside Job richly deserves the Academy Award it just received for 2010’s best documentary.
Directed by Charles Ferguson
Narrated by Matt Damon
120 min, DVD $28.95
Not one douchewad behind bars yet
“Forgive me,” director Charles Ferguson began his Oscar acceptance speech, even before thanking the Academy. “I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong.”
By now, we’ve heard about plenty of financial fraud. There’s been plenty of investigatin’ goin’ on at Capitol Hill, too. And it’s all been great fun.
Who can forget the scene replayed in Inside Job when Michigan Senator Carl Levin questions Goldman exec Dan Sparks on the infamous “shitty deal” that the company foisted onto its own clients.
Quoting a Goldman e-mail: “‘Boy that Timberwolf was one shitty deal,'” Levin said. “How much of that shitty deal did you sell?” Levin’s performance, with eleven repeats of the key phrase, still makes great (PG-13) TV. (And don’t miss the hilarious hip-hop “Carl Levin ‘Shitty Deal’ Remix”).
But even though fraudsters from Bear Stearns to Fannie Mae certainly do deserve jail time, is it fair to blame the whole financial crisis on speculating scoundrels? What about the role of peak oil, which we now know came in 2006, just two years before the bank meltdown?
The media seems uninterested in how $140-a-barrel crude oil helped cause the Great Recession by taking money out of families’ pockets that they would’ve used to service their mortgages and buy iPods, Nikes and venti mochaccinos from Starbucks. So I was disappointed, but not surprised, to see that Inside Job doesn’t even touch on the topic of energy. How I would have loved to hear Matt Damon talk about that.
But even the most dogged peak oiler must recognize that Wall Street con games played a big part in crashing the world economy and putting millions of people out of work and out of their homes.
Why it’s called an “inside” job
The film shows very clearly that even after 2008, the foxes are still guarding the hen house, starting with top Obama finance officials Larry Summers, Timothy Geithner and Ben Bernanke.
Inside Job singles out Summers for a special place in hell. Summers was a Harvard economics professor who made more than $20 million as a consultant to and lobbyist for Wall Street firms. When he moved into government, he fought from the inside to loosen oversight on his former clients. Most famously, he served as Bill Clinton’s Treasury Secretary where he oversaw passage of the Gramm-Leach-Bliley Act, which paved the way for the many mergers that created banks too-big-to-fail.
By 2008, Summers was ready for his close-up in the Obama White House. As Ferguson writes,
Then, after the 2008 financial crisis and its consequent recession, Summers was placed in charge of coordinating U.S. economic policy, deftly marginalizing others who challenged him. Under the stewardship of Summers, Geithner, and Bernanke, the Obama administration adopted policies as favorable toward the financial sector as those of the Clinton and Bush administrations—quite a feat. Never once has Summers publicly apologized or admitted any responsibility for causing the crisis. And now Harvard is welcoming him back.
Blame it on Wisconsin
It’s clear from Inside Job that the Democrats have become just as beholden to Wall Street as the Republicans are to Big Oil.
Of course, ever since the twenties, the GOP has been the party of big business. But back in the day, say in the 1950s, the Democrats were different. Aside from coddling segregationists, the Democrats also fought for labor rights and middle-class benefits. That’s because, as Kevin Drum has argued compellingly, until the 1970s organized labor served as a source of campaign cash and grassroots feet-on-the-street for the Democrats to counterbalance the support that Republicans got from big business.
But after the rise of anti-war hippies and greenies in the Democratic Party created a split with the beefy steelworkers and teamsters who tended to be socially conservative, unions faded as a reliable source of support for Democrats. Obviously, globalization and corporations shipping manufacturing jobs offshore to Mexico and China also decimated private-sector unions. Either way, with labor so weakened, Democrats needed to find another source of support. And where in America could they turn but to big business?
A new counter-balance to corporate power
Now, if the middle-class revolt in Wisconsin continues to spread to workers across the country, can a new force representing working people and small businesses — either traditional labor unions or some new type of alliance between economic justice and green groups — arise to challenge the power of big business over both parties?
I’ll probably hold my nose and vote for Obama just to avoid the disaster of a President Romney or Pawlenty, who would no doubt drop energy and climate policy in the lap of the Koch brothers. But I’d do much more than vote for the guy if Obama would kick Wall Street to the curb and set himself up as a trust-buster a la Teddy Roosevelt.
Inside Job shows just how badly America needs to put finance back in its place as a service industry, a minor part of the economy that doesn’t create any value but just moves money around. No longer should we accept NYSE greedheads as the masters of our political and social universe.
– Erik Curren