If you’ve ever wondered what really happened during the global financial meltdown of 2008, then you may want to put the documentary Inside Job on your list of must sees. The film, narrated by Matt Damon, is one of the best explanations of the financial and investment complexities and corruptions that led to this meltdown.
I remember how, in 2008, the presidential campaign here in the U.S. came to standstill when George W Bush stepped before the American people and announced that the financial sky was falling. Lehman Brothers and AIG collapsed. Merrill Lynch was on the verge of bankruptcy. Banks screamed for bailouts. Economies nosedived. Credit ratings went south. The investment banking system was coming apart at the seams. The culprit in this chaotic and complex was derivatives – specifically with mortgages.
I remember how every other week or so, we received notices from a bank that our mortgage had been sold to this bank or that one. I remember thinking, Huh? What’s this mean? I recall how the people across the street from us went bankrupt and walked away from their house. Their mortgage was underwater. For months afterward, that house was a revolving door of tenants. We never knew who was living there, but at one point, a couple of the tenants sat all day in their garage, computers on their laps. We later realized they were using the internet connections of their neighbors.
By 2009, it was obvious that Florida and the rest of the country were in deep trouble. Foreclosed signs appeared on lawns in every neighborhood. We had friends who hadn’t paid their mortgages in months, but because no bank could prove who owned their homes, they stayed in their homes.
Meanwhile, the story for CEOs for these greedy, corrupt countries was quite a different story. For instance, between 2000-2006, the top five execs at Lehman Brothers made over a billion dollars. When the company went belly up, these execs were allowed to keep their earnings.
Five years after this meltdown, economies are staggering along. Iceland went under. Greece is the brunt of late-night jokes. Spain and Portugal are barely keeping their heads above water. Banks are bigger than ever and the financial sector employs more than 3,000 lobbyists who help to sculpt financial policy in the U.S. Despite assurances that the local and international economies are improving, all you have to do to uncover the truth about your country, your state, your province, is to drive through your neighborhood, your community, or walk into your local bank.
In the U.S., for the first time in history, children are not more educated or prosperous than their parents.
Naomi Klein’s book, Shock and Awe, is probably one of the most lucid ever written about global finances. John Perkins, one of the foremost writers on shamanic practices, used to work for the IMF. His book, Confessions of an Economic Hitman tells this same story of corruption, from a slightly different perspective.
When Obama won the 2008 election, he appointed Timothy Geitner as the U.S. Secretary of the Treasurer. Geitner was the president of the Federal Reserve Bank of New York during the meltdown, so this selection bewildered me. During the meltdown, Ben Bernanke was the current chairman of the Federal Reserve, and Obama re-appointed him. Why?
As Matt Damon says at the end of this terrific documentary, the people responsible for this meltdown are still in power.
What’s wrong with this picture?
Hopefully, with Obama’s second term – where he doesn’t have to worry about re-election – this country can begin functioning again as a democracy. This documentary captures the essence of why it’s so profoundly important.