Wednesday, December 11, 2013

Inside Job review

I watched Inside Job again - maybe for the fourth or fifth time. Krugman was not included as an interviewee, while Dominique Strauss-Kahn (ugh) was. And I had forgotten somehow that Brooksley Born was mentioned in this movie, albeit briefly.

 Krugman had some interesting things to say about the movie when it came out:
I finally managed to see the movie. Do see it if you can; it will make your blood boil, and in a good way.
One side reaction: the movie showed the Hamptons, with the caption “two hours from Manhattan.” Only for the little people, guys. Almost 20 years ago — when Wall Street paychecks were small by modern standards — I asked some investment bankers whether getting out to their Hamptons places was a hard drive; there was a silence, then someone said, “It’s only half an hour by helicopter.” In a way, the point is that even Ferguson doesn’t quite grasp just how big the gaps in life experience have grown.
OK, about the economist-bashing: I thought it was basically fair. There aren’t, I think, all that many cases when economists are literally paid to offer a specific opinion — although Greenspan’s defense of Keating qualifies. But the movie didn’t say there are. What it suggested, instead, was a kind of soft corruption: you get paid a lot of money by the financial industry, you get put on boards, but only if you don’t rock the boat too much. Besides, you hang out with these people, and get assimilated by the financial Borg. I think all of that is very true.
I think this film will stay with us; when you ask how the even worse crisis of, say, 2015 happened, the fact that these people got away with it will loom large.
I had my own "gaps in life experiences" moment back when I was teaching watercolor classes at the Perkins Center for the Arts in Moorestown NJ, a well-to-do township in South Jersey. Classes were mostly attended by the children from the township and other well-off areas but there was also some kind of tuition aid or scholarships for poor children from the city of Camden so they could attend. And during a conversation that included children from Moorestown and Camden, and one of the Moorestown children mentioned having a vacation in Europe. One of the kids from Camden accused him of lying, because the idea of traveling to Europe was outside of the realm of possibility, in her experience.

And the income gap in the US has only gotten worse since then.