Wednesday, March 23, 2011

Inside Job

Finally saw it last night. In terms of film-making I thought it was pretty ho-hum... hard to believe it could have been the best documentary of the year, although I suppose writer-director Charles Ferguson did reasonably well with a subject that does not particularly lend itself to the medium. Matt Damon's narration was quite flat... if he had only been Jason Bourne he could have gone in there and kicked Larry Summers's butt...

The now-famous sequence in which well-known economists are struck silent or goofy when asked about their undisclosed conflicts of interest was fair and necessary, although my guess is that most of these guys believed what they were arguing well before they ever had the promise of a penny from the fat cats... self-selection rather than moral hazard at work.

I thought it was interesting that in the end Ferguson seemed to be pushing Raghuram Rajan's argument that rising inequality fueled the demand for mortgage credit which led to the bubble and the crash. Of course that story is not necessarily incompatible with the explanation offered in the rest of the movie up to that point... namely that deregulation allowed the crooked banksters and their economist shills to pull a fast one on us. The film does not offer up a third explanation, which I'm partial to and rests on an appreciation of more universal human foibles: When the smartest guys in the room say they can get you something for nothing, it will be very hard to resist, but you will wish you had done so.

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