Movie review: 'Inside Job'

What happened?

What hit us?

How did things go so horribly wrong?

You have questions, "Inside Job" has answers. After watching Charles Ferguson's powerhouse documentary about the global economic crisis, you will more than understand what went down — you will be thunderstruck and boiling with rage.

For this smart and confident film, thick with useful information conveyed with cinematic verve, lays out in comprehensive but always understandable detail the argument that the meltdown of 2008 was no unfortunate accident. Rather, the film posits, it was the result of an out-of-control finance industry that took unethical advantage of decades of deregulation. It's enough to make you want to keep your money in a mattress.

Ferguson, who wrote and directed the excellent Oscar-nominated "No End in Sight," about the U.S. occupation of Iraq, is ideally positioned to deliver the kind of thorough-going, persuasive analysis that "Inside Job" provides.

Neither a film school graduate nor an ideologue, Ferguson is rather a well-connected academic who has a doctorate in political science from MIT, was a senior fellow at the Brookings Institution and has been a consultant for high-tech firms such as Apple, Intel and Xerox.

Those connections and that background give the film assets many documentaries lack. For one thing, it has given Ferguson access to the kind of authoritative insiders who usually don't appear on camera, including International Monetary Fund head Dominique Strauss-Kahn, French Minister of Finance Christine Lagarde and Singapore Prime Minister Lee Hsien Loong.

Ferguson's credentials, and his sense of outrage, give him the intelligence to ask the tough questions and the willingness to do so. More than one of "Inside Job's" talking heads look seriously disconcerted when the filmmaker says things like "You can't be serious" and "Forgive me, that's clearly not true." Glenn Hubbard, dean of the Columbia University business school, is so flustered he snaps, "You have three more minutes. Give it your best shot."

The director may come from academia, but that doesn't mean he has a weakness for jargon. The language and the thinking are crystal clear (editors Chad Beck and Adam Bolt co-wrote with Ferguson), the quotes are pungent, the vivid graphics by Bigstar clarify the points and Matt Damon pulls it all together with his narration.

"Inside Job" starts not on Wall Street but in Iceland, a nation whose problems turn out to be the world's in microcosm. How did this small country, with a gross national product of $13 billion, end up with bank losses of $100 billion? The privatization of the three largest banks led to a borrowing spree that led to disaster.

In the United States, Ferguson explains, after more than 30 years without a financial crisis, things began to change in 1981. A group including Federal Reserve Chairman Alan Greenspan (who was ideologically opposed to regulation) and both Republican and Democratic Treasury secretaries including Donald T. Regan, Robert E. Rubin and Lawrence H. Summers made deregulation the way things were going to be.

When complex, potentially dangerous financial instruments called derivatives came into vogue, unsung heroes, like government official Brooksley Born, pushed strenuously for their regulation, but the powers that be were so opposed that in 2000 Congress passed a bill specifically prohibiting that from happening.

Derivatives made it possible for banks that made housing loans to minimize their risk if there was a failure to repay, which helped fuel the boom in subprime mortgages. Then financial institutions combined these risky loans and made them seem as reliable as government securities, which of course they were not. Using the notorious credit default swaps, these firms were able to both sell those unreliable securities to gullible clients and also bet that they were going to fail. It was, as Laurel and Hardy might have said, a finemess.

"Inside Job" conveys more information than it is possible to succinctly recap, but it is always both easy to follow and alarming in its portrait of a system run frighteningly amok.

Given the financial industry's fierce opposition to reform and the fact that, as "Inside Job" demonstrates, the deregulation ideology has found a comfortable home in academia, Ferguson is not exactly optimistic about our being able to avoid these kinds of catastrophes in the future. Which is why he made this film.

"It is my hope," he writes in a director's statement, "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 who destroyed it." It's a statement that, like this exceptional film, is hard to argue with.

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