'Inside Job': A damning indictment of greed in the financial meltdown

Inside Job, Charles Ferguson's bracing account of the financial collapse of 2008 and its continuing aftershocks, has the twists and turns of a classic heist movie. It is a crash course in the market crash and free-market free fall that caused millions to lose jobs, homes, savings, and pensions. And it is a damning indictment of the individuals and institutions who made money while customers lost their shirts.

Ferguson shows us that the conspirators are still at large. They make our fiscal policy, lead our banks, teach our children. They are appointed by Republicans and by Democrats. And so far, none of them has been prosecuted for fraud. Matt Damon's narration explains it all calmly, in graspable terms.

A high-tech entrepreneur, policy wonk, and academic, Ferguson has a different style than other documentarians. Errol Morris (The Fog of War) is the interrogator who keeps subjects on their toes. Michael Moore (Bowling for Columbine) is the confrontationalist who puts them on the defensive. Ferguson (No End in Sight) is the conversationalist who gets them to speak matter-of-factly.

And if his subject fudges or stretches the facts, the off-camera Ferguson will refocus him (the players here are almost exclusively male) with a "Seriously?" or "You've got to be kidding."

Inside Job's overture is a recap of Iceland's financial meltdown, an early warning of the global collapse because of widespread investment in subprime mortgages. Beginning his film with the economic and physical landscape of the fire-and-ice nation provides a preview of the fiscal volatility to come.

What went wrong? Ferguson points to the 1999 repeal of the Glass-Steagall Act, the Depression-era legislation crafted in response to the 1929 stock-market crash. Once depository banks could merge with investment houses, the floodgates were open.

The result was a round robin of collusion. Bankers encouraged risky investments in subprime mortgages even as they used credit default swaps to protect their own exposure. University professors were commissioned by financial-services outfits to testify to the fundamentals of such dubious investments. Rating agencies such as Moody's certified bonds, making them seem secure. And the Federal Reserve had no reservations.

Ferguson focuses on the mutual back-scratching arrangements between the financial-services industry and free-market academics that made such risky business practices appear prudent.

While the bank bailout occurred during the waning days of George W. Bush's administration, Barack Obama's economic brain trust includes many of the same players as that of the 43d president.

While Henry M. Paulson, Ben S. Bernanke, Timothy Geithner, and Larry Summers declined Ferguson's interview requests, the filmmaker scored fascinating sit-downs with academics such as New York University's Nouriel Roubini, who warned of the impending crisis. Ferguson also had telling encounters with some scholars, such as Columbia University's Fred Mishkin, who failed to disclose their own conflicts of interest, either as members of bank boards or as authors of commissioned corporate analyses.

The film takes what seems to be a tangent, interviewing owners of an escort service to talk about the extreme cocaine-and-call-girl habits of investment bankers, wonts fraudulently billed as business expenses.

Cut to talking head Eliot Spitzer. As New York's attorney general, he vigorously prosecuted fraud in the financial industry. As the state's governor, he resigned when his affair with a call girl was made public.

Thinking along the lines of the Feds who brought down mobsters by prosecuting them for tax fraud, Spitzer suggests that maybe the way to get the investment bankers behind bars is to prosecute them for the bogus expense reports. Spitzer acknowledges this suggestion might sound funny coming from him, but it's an audacious suggestion befitting Ferguson's most audacious film.

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