The Largest “Inside Job” in American History
One billion. One billion people tuned in to watch the Academy Awards on Sunday night. While many people were anticipating the winners of best picture, best actor, or best supporting actress, I was anticipating the winner of best documentary. The winner, of course, was Inside Job, directed by Charles Ferguson. During his acceptance speech, Ferguson made a quick comment that I found extremely shocking. He humbly approached the podium, apologized for his following comments, and said that not one perpetrator in one of the largest financial fraud scandals in American history was prosecuted.
Last semester, Mr. Harnett’s AP US History class went to see the documentary for extra credit. Most students went in anticipating a boring movie with whiny economists. However, any student that didn’t walk out of that movie angry must have fallen asleep halfway through. 20 trillion. 20 trillion dollars was fraudulently earned by only a few corporations, crippling the global economy. Goldman Sachs, Lehman Brothers, Citigroup, and a few other massive banks tore apart the economy.
The main point the film makes is that these “too big to fail” banks controlled a large portion of the economy. These banks brought down the economy through financial fraudulent trading with extremely dangerous bonds called Collateralized Debt Obligations (CDO). These CDOs were formed with your money. These bankers were gambling with your money. The mortgage on your house, the loan on that new truck, both were consolidated along with hundreds, sometimes thousands of different loans into one bond: a CDO. Anticipating these loans to fail, bankers took out insurance on the CDOs called Credit Default Swaps (CDS). The largest supplier of CDSs was AIG. Eventaully, when the CDOs failed, AIG was required to give CDSs to the banks and inevitably, AIG failed.
Ferguson makes a subtle point in the movie. These bankers are mostly men. Middle to old aged men. They are extrememly compulsive. Drug use, prostitution, and many other crimes were prevalent in the wealthy environment these men inhabited. Ferguson suggests that we should prosecute the bankers for these crimes first. It’s one way we can get them. However, not one single person has been prosecuted. I think, as it is also subtly suggested in the movie, that there is a large amount of conflict of interest within the government. It had been infiltrated by these corporate banks. Henry Paulson, the former CEO of Goldman Sachs, served as the U.S. Treasury Secretary in the Bush Administration. Henry Paulson led the deregulation of the financial industry which caused these “too big to fail” banks.
This is not a ‘Democrat’ issue. This is not a ‘Republican’ issue. It is completely bipartisan. We need to stop the argument. We can’t blame immigrants, or former President Bush, or any innocent bystander. The true culprits are these bankers. Corrupt and greedy, they single handedly destroyed the global economy, and they must go to jail.
