I just watched Inside Job. It was one of those films I felt I had to see, rather than desperately wanting to. I am glad I did watch it though. I am still reeling from the impact of its message. I was expecting to agree with the thrust of the film’s argument about the excesses and ludicrous risk taking of the financial sector but I wasn’t prepared for just how persuasive its case would be. I find it hard to disagree with the view that the banking system should be divided into small high street firms for the general public’s savings and more adventurous, some might say dangerous, investment arms, prone to failure. In fact it’s my personal view that such a separation is the sensible and right course of action for both future fairness and stability.
But I had a feeling that Inside Job’s argument would only preach to the converted. It would not make a dent in the ideologies of those who believe in minimal regulation and a laissez faire approach to economics. Many in this camp are brainwashed and privileged; too stubborn or selfish to admit that the global collapse that began with Lehman Brothers in 2008 changes everything they supported. However some have genuine intellectual and pragmatic reasons for insisting too much government control is a bad thing. They need to be won over to a middle way that recognises not all regulation is bad and that indeed given what has happened, some is vital. An essentially left wing argument, with elements of conspiracy hinted at by the title of Charles Ferguson’s film, would not convince this group.
Whilst there are elements of what I predicted in the content of Inside Job, it actually fashions an argument independent of political viewpoint, based primarily on undeniable facts, which cannot be ignored. The film’s title refers to the overlapping and conflicts of interest between key segments of the banking crisis; from government to investment bank CEOS, from rating agencies to universities. This is not an unfounded or merely possible conspiracy but a cold, hard reality of vested interests, dominated by a handful of men, which control the world’s fortunes through their self interested greed.
Time and again Inside Job illustrates how bank bosses pocketing hundreds of millions of dollars worth of bonuses would crossover into so called “regulation” jobs for the US government, and then leave to go back to working for banks which they could have favoured during supposedly impartial decisions about government policy. The rating agencies that approved risky transactions were paid by the banks, so had no reason to be accurate or give warnings. The decision makers would then lecture at prestigious universities like Harvard to justify what they and others had done and ensure the next generation does the same. The justification would always be that finance is too complicated for us plebs to understand.
Whatever your opinion on the right solution to the problem, whatever your political allegiances, it’s clear that conflicts of interest on such a scale could only lead to corruption or at the very least incompetence. When the credits for Inside Job rolled I found myself not only digesting its gobsmacking and concise revelations but looking at the recent phone hacking scandal in a new light.
In many ways the News International crisis has gone beyond party political differences. Parliament voted as one to block Rupert Murdoch’s takeover of BskyB. Political leaders of all colours were condemning the illegal actions of rogue journalists and private investigators, as well as their own close relations with the media. MPs responded to public outrage. But on Wednesday Labour leader Ed Miliband was accused of being partisan when he grilled the Prime Minister in the Commons about the reasoning behind his appointment of former News of the World editor Andy Coulson, who it now seems must surely have known about or even sanctioned illegal practices. David Cameron counterattacked Miliband’s interrogation by labelling him as a hypocrite and opportunist. Despite some awkward questions from other MPs, which Cameron refused to give straight answers to, he generally wriggled out of a tight spot.
Some might say this is fair enough. The incidents being analysed throughout this scandal took place under a Labour government. The Prime Minister has released details of his meetings with editors and News International, to be “transparent”. Tony Blair’s New Labour started the culture of greed which made not just aspiration but being rich ok and desirable, and also created the Westminster culture of spin with media handlers like Alastair Campbell at every Downing Street meeting. Cameron’s relationship with Andy Coulson might even be described as refreshing, given that he refused to ditch a man he regarded as a friend at the first sign of trouble.
Even before watching Inside Job though I disagreed with the way Cameron shot down Miliband. As leader of the opposition it’s Miliband’s duty and his job to pressure and question the Prime Minister. He also has genuine reasons to doubt his integrity, fuelled by public demands for clarity. After watching Inside Job I can see that conflicts of interest like the one David Cameron found himself in, working with Coulson and leading a government approving the BskyB takeover, are just tiny steps away from catastrophe and corruption. Miliband must continue to expose Cameron’s mistake and continue to ask for public assurances that it won’t happen again.
Inside Job is a surprisingly gripping watch. It lost me during some sections of economic explanation but for the most part constructs a message that resonates independently of mathematical or political understanding. It remains topical and relevant for a number of reasons, concluding with the revelation that President Obama kept on the architects of the 2008 crisis to rebuild the economy more sustainably. It is a sobering reminder of the huge limitations and inequalities of life in a modern democracy.
Liam Trim (follow me on Twitter)
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