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.
I haven’t watched this movie but I shall.
There’s a problem with this review: it’s socialist in nature.
How about academics who are funded publicly and they go on about the benefits of Marxist concepts deluding so many people in universities and beyond, who are too brainwashed to react and who keep repeating clichees like parrots (kindly note Marxism is a theory which CANNOT be put into practice – it has been and every time it’s been a disaster; and don’t start with oh, all those were just bad examples).
How about the big problem of this society being lack of faith and true moral precepts, but turning to new religions like environmentalism to save the earth (BTW, the earth is OK, it is the people who need saving).
How about humility and kindness.
How about marriages splitting up because people are more and more individualistic, and less and less tolerant (in reality!) and kids bouncing between parents or being left alone to educate themselves with computers and crappy magazines and dubious movies.
How about actually working for the marks or the money.
How about using our brains and speak up when something or somebody is damaging – and not only unilaterally (sorry, Conservatives aren’t that bad and they did not create the crisis in Canada, it was the socialists who did it – my opinion; do you mind?)
If we address all of these etc., the economy may actually take care of itself.
How about you preach it on your blog where your handful of readers would like to hear it and spare us the derail of this post?
P.S. Laissez Faire Capitalism is also a THEORY, which has FAILED miserably every single time anyone has tried to put it into practice. But, what the heck, if we just keep trying maybe it will work. Or maybe civilization will crumble. Who knows?
Thank you for taking the time to read and respond to this, Zee. While I may not agree with your opinion, you are certainly free to express it. One can only hope that we all take the time to base our opinions in solid research, evidence and thoughtful analysis.
I personally believe that public funding of research is an important step towards ensuring that research best serves the interest of the public.
Not all academics are Marxists – far from it.
A substantial amount of research suggests that concerns over our environment are absolutely valid.
I strongly disagree with your theory of the heteronormative nuclear family as a cure-all for economic and social issues – indeed, the imposition of these normative family structures have had many negative consequences.
I’m not sure which socialists you refer to, or how it is you believe they are responsible for the economic crisis, but again, I disagree with your conclusion.
Finally, I do not see how the economy can “take care of itself,” since the economy is not a living thing, and so cannot think, feel, act or care.
I’m glad you will watch the documentary – clearly I think there is a lot to be learnt from it.
If you think I was derailing, you simply can’t make connections. And if you’re an academic, that’s really bad.
I was not implying that ‘cannibalistic’ capitalism – or whatever you’d like to call it – is the method to straighten the economy; I was just making a point that socialism isn’t. I’ve lived under socialism-leading-to-communism, so I know first-hand that it works much less than capitalism. Have you?
I appreciate your fair-play, thank you – had this been the Human Rights Commission venue, I would have certainly been more careful (after all, one can get jailed for expressing one’s opinion in Canada, can’t they? – I’m half-joking, of course)
Public funding, aaah… how interested indeed is the public in a lot of academic research is a great topic. Maybe some other time.
I have met very very few academics who are not Marxists, so I know they exist and they are quite delightful, if only for their rarity as opposed to all the boring others.
A similarly substantial amount of research suggests that concerns over our environment are not that valid. Environmentalists choose not to acknowledge it because – and here, we get back to the funding issue – they wouldn’t be so funded: see Climategate, for instance.
We haven’t reaped yet all the ‘benefits’ of a world without proper family structures (I’d say “normative” seems to apply more to nowadays ‘normality’) – but we shall, and I’m afraid it’ll be in a shorter time than you can possibly imagine.
The economy is made by people who can think, feel, act or care – that is, if they want to. It is usually easier not to.
Zee your sarcastic comment on “how interested the public is in a lot of academic research” is ironic, being that you are a member of the public who frequents this website to read insightful articles (such as this one) on a daily basis. You also take time to comment on some of them. This is what this website is about; connecting historians and public historians with the public through media and it seems to be doing its job.
Also, for someone who appears very scornful of academics, I took the time to check out your blog and it turns out, you are one yourself. Being an academic you know that a logical argument is constructed from facts, and that when referencing something, it is usually followed by some sort of proof, citation, or explanation that it is a valid concept (and not just based on personal opinions and experiences which you seem to rely on heavily).
I think that if you are going to take the time to comment on these articles please make sure they are not just personal rants and are instead contributing to the intellectual exchange that this site hopes to promote. I appreciate your opinions and please share them, but I do not enjoy your personal attacks. Thank you.
OK, Kaleigh. This being a public blog, however, its writers should be aware that they are bound to get non-academic comments from the general public. As for myself, I used to be an academic – but the many needed proofs and citations nearly killed my spirit. I switched to common sense.