Ostensibly this documentary film is just about the ongoing financial crisis that started in 2007. It charts the immediate causes through a lending bubble, although it does not address the causes of that bubble in international trade imbalances and the choices made by governments. That, as they say, is another story. But the real strengths of this particular story is its success in getting interviews with some of the big names in government, regulation and business as well as using public archive sequences to demonstrate the corruption of politics, regulation and academia that allowed this particular crisis to happen.
Of course the film-maker has selected material to present a case but, nonetheless, you hear from the protagonists own mouths their sense of entitlement, their vested interests and their lack of contrition or self-awareness. This is very much a governance issue. The lessons do not just apply to financial services in the USA but hold up a mirror to corporate dysfunction worldwide. We see alpha males (and they are virtually all males), at the top of the tree, who obtain influence over their supposed regulators (in the USA, even becoming the regulators) and, of course, don't see the need for regulation. Their world view of how things work is guided by their own vested interests so, of course, they believe in efficient markets and light regulation and, having captured top roles in academia they shut down debate and marginalise ideas that contradict their own.
One of the best sequences in the film is the interview with Glenn Hubbard, economist and Dean of Columbia University Business School. He was an adviser to George W Bush on deregulation and is member or adviser on many committees, including the Federal Reserve Bank of New York. It asks him about his substantial business consultancies and the conflicts of interests this raises with his academic and government advisory roles. Instead of addressing this legitimate issue of public interest he becomes aggressive and defensive. Asked why an important advisory paper he penned, supporting the strength of Icelandic banks and written just before the implosion of the economy of that country, failed to mention that he had been paid for it, he failed to show any embarrassment. When it was pointed out to him that his on-line cv on the Columbia website wrongly stated the title of this paper as addressing the "Instability" of Icelandic banks instead of the "Stability" he lamely blames a typo and, again, shows neither concern nor embarrassment at the impression this gives of dishonesty.
All this is relevant to corporate governance. The unconstrained alpha male will not always seek self-interest at the expense of the multitude, but it only takes a few to wreak untold damage. We need balances, transparency and accountability to protect the common good.
See the film. Read "23 Things They Don't Tell You About Capitalism" by Ha-Joon Chang. Keep an open and critical mind on both but realise how important good governance is and how easily corruption takes hold of a poorly protected system.
PS This is a blog about governance not about cinema...however...with the Oscars just announced I feel driven to observe that while Inside Job is a very good film it is nowhere near as original as its rival Exit Through The Giftshop. I guess it won the award because the voters wanted to comment on the message rather than on the film-making.
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