Review of "Inside Job", Oscar winning documentary and a comment or two

Last weekend, I got around to watching the documentary that created a real buzz at the Oscars for the winner's acceptance speech as much as the movie.  In his acceptance speech, Charles Ferguson said that not one person has gone to jail for what was perpetrated on the American people and the world in the financial meltdown.  When you look at the vast amount of greed that has occurred in the American financial system of the past decades, he has made a film that lays it all out, warts and all, for all of us to see.  AND YOU NEED TO SEE THIS ONE!  As demonstrated in the movie, there is plenty of blame to spread around, particularly with the investment banks, the SEC and the rating agencies.  Even worker bees in the mortgage and real estate business rode the tsunami of cash for a long time.  Yes, many local folks worked very hard and now they all have taken it in the shorts the past couple of years and will continue to feel the pain for another five years, at least.

So who's all to blame?  Oh my, where do you start?  Where do you end?  The thing you have to remember is that blame is not necessary criminal.  That is where I think that the investment banks, the SEC, AIG and the ratings agencies are primarily to blame, but someone needs to look deeper.  If they and others were not making changes in the legal connections over decades between mortgages and derivatives, the financial community would have been hard pressed to create such a calamitous event.

We also know the usual suspects in this case if you haven't been paying attention - mortgage brokers, commercial banks, investment banks, AIG, the SEC, the rating agencies and of course, the politicians.  Yes, we can certainly point a big, fat finger at previous White House administrations (yes, plural and of both parties) as well as Congress.  Too much money, too much greed and too many people willing to look the other way.

I am also going to offer another reason why we ended up in this fix.  Short-term thinking.  For years we have simply decimated our manufacturing sector.  Because we valued short-term profits over long-term strategic thinking (for the reverse, see China), we were willing to send millions of jobs overseas because labor was so much cheaper.  We lost the diversification of our economy, forgetting how to make things or at least not caring because we only want a "heckuva deal".  So in order to keep our GDP growing every year, we needed another sector to take the place of manufacturing.  Enter the construction industry.  For years, we hung on the leading indicators of new housing permits and starts like it was real growth, when in reality it was about bigger and better houses because we can, not because we should.  The "I want it now" mentality, "push a button and get a result", gave us short-term profit expectations in long-term investments.  And we all just followed the pied piper, Mr. Greenspan, as well as others that said that deregulation was good.  So, some of us need to take a good look in the mirror.

Now it's time for the rest of us to play a different tune.  Oh and if you're looking for someone to really focus the gleaming bright light look no further than the people responsible for designing the compensation packages throughout the financial industry.  When you want to change or direct behavior in a capitalistic society, there's no better way that to give an incentive for that behavior.  Now, don't get me wrong, I pretty much dig the capitalistic system.  Yet, any adequate checks and balances that were in the system were swept away with strong lobbying efforts and campaign contributions.  Yep, that other tsunami of cash that also benefited a select few.

Okay, I could go on with this but know I should probably quit while I'm ahead.  If you feel compelled, make a comment on this post.  As long as it doesn't flame anyone personally, I'll post it.

PS. I will say it was a little weird to see Dominique Strauss-Kahn being interviewed for "Inside Job".  Too bad he couldn't keep it in his pants.  He actually nailed it and provided one of the few perspectives that showed a global view (and frankly he should have being the former head of the IMF and all).  Watch his interview in the Special Features section of the disk.