The economy consistently polls as a critical issue for Canadians. Amidst a long and drawn out recession, where unemployment and underemployment exacerbate a skyrocketing cost of living alongside decreased buying power, concerns about the economy are understandable.
Yet despite popular interest in the economy, we live in an era where we are told that economic matters must be left to “experts.” As a language of expertise has been created to distance people from a clear understanding of the economic issues that impact our daily lives, we are expected to place our trust in the financers, investors, bankers and economists who claim that they alone can steer us towards economic stability and prosperity.
Having long been suspicious of the direction some of these people have been steering us, I was thus pleasantly surprised to watch the refreshingly clear, straightforward and insightful documentary Inside Job. This Academy Award winning film explores some of the factors that led to our most recent recession, how it could have been avoided, and destabilizes the myth that our economic experts are deserving of our blind trust. Perhaps most importantly, the film illustrates how the gross mismanagement of the economy will continue if we allow it.
Directed by Charles Ferguson and narrated by Matt Damon, Inside Job explores the uncomfortably close relationships between Wall Street, the White House, and knowledge production in universities. As governments have turned towards deregulation of the economy, privatisation has allowed some individuals to benefit from exponential gains in wealth, while they remain largely insulated from their increasingly reckless manipulation of the market.
For example, risky investments have been wrongfully been given the highest, most secure ratings. Meanwhile, insiders have protected themselves against risk by insuring themselves against default. Therefore, if someone has been given a mortgage they cannot afford, a high risk loan, lenders can and have insured themselves against default, standing to reap a financial windfall whether the loan is repaid or not. People who lost their homes were not so lucky; neither were the citizens who footed the bill for the massive financial bailouts given out in the wake of the crisis.
The intimate relation between government, business and universities is another important theme of this film. The powerful lobbying force of the financial sector is probably no surprise to many. The rate at which individuals switch positions between these three sectors may also be unsurprising to some. Perhaps others were even aware of the laissez-fair approach to knowledge production in universities, wherein academics have received substantial amounts of money from corporate interests to produce leading “expert opinion.” Meanwhile, there are no regulations stipulating that said academics reveal their funding sources, and hence how their findings may lean towards those very interests. Such conflicts of interest, and an overall lack of transparency and accountability, are both important and disturbing themes in this film.
A broader historical perspective might have improved this film. The current recession has often been compared with the Great Depression of the 1930s; this overlooks a much longer history of cyclical recessions, and the lessons that can be drawn from this. On the other hand, one of the great strengths of the film is that it exposes the degree to which the economic gospel of our times is based in relatively new, and heretofore untested, ideas. Moreover, it exposes how dismal a failure these ideas have proven to be in practice.
Another important difference between the Great Depression and our current Great Recession is the way that people have responded in times of crisis. The 1930s were characterized by broad-based discontent with corporatism, protest, and the creation of new political parties that to better represent people’s interests. Indeed, much government regulation of the economy had its roots in the widespread discontent and protest of this era.
Today, however, much of this mismanagement, corruption and the growing gulf between rich and poor continues unchallenged, unhindered by our silence. Meanwhile, the proponents of deregulation and privatisation have continued to enjoy electoral successes in Canada, creating more fertile ground for the fruits of economic injustice to grow. Instead of pointing the fingers at those who led us into this crisis, many seem content attacking the other pawns in this game – union bashing, welfare bashing (unless it’s corporate welfare), poor bashing – far too many of us are ready and willing to point the finger at one another, joining the great race to the bottom, as we continue to allow ourselves to be led down this sloping path by those who created this crisis in the first place.
Why is this? Why haven’t those responsible for this crisis been held accountable? Why are we still allowing them – indeed, publically funding them – to lead our economy? Why are we still placing our trust in them? Where is the justice? Where is the outrage?
Inside Job poses these very important questions. A good place to begin answering them is by watching this very powerful documentary.