‘Inside Job': An Oscar Winner Answers Your Questions
Editor’s Note: Today we hand over question-and-answer duties to Charles Ferguson, former MIT academic and dot.com entrepreneur who is now a documentary filmmaker, and who created the Academy Award-winning analysis of the Crash of ’08, “Inside Job.” Last week, we aired an interview with him, focusing on the film’s most controversial contention: that many academics were bought off by the finance industry and thus contributed to the bubble. We asked you to send us your questions for Mr. Ferguson, and many did — on Facebook, in comments to the NewsHour, and on the Business Desk. So many, in fact, that answering them all might have slowed work on his next film, a biopic of Wikileaks’ Julian Assange.
Here, then, are Ferguson’s answers to a sample of your questions. For those who have more, please pose them in the comment box and the usual proprietor of this page will try to address them.
Question: We would like Ferguson to explain an instance where disclosure would have prevented any one instance of economic fraud/crime (as he put it). -Anonymous
> Charles Ferguson: I think there are many. In Iceland, if the general population had known what the banks were in fact doing — for example, that most of the bankers’ loans were being made to themselves, each other, and their friends — I think it’s very unlikely that their conduct would have been allowed to continue as long as it did. In the United States, if banks and hedge funds were required to disclose that they were betting heavily against the markets and in some cases the very securities that they were selling as safe, or if they were required to disclose that they were suppressing or disregarding their own internal due diligence, I strongly suspect that, again, this would not have gone as far as it did.
Question: Ferguson has no definitive evidence to call into question any economist’s credibility on this short interview. He has correlation and not causation: they are paid by people who make business decisions, therefore they cannot accurately (to their best ability) research and draw conclusions? Yeah right. – Dan
Charles Ferguson: There is no evidence whatsoever that Frederic Mishkin or Richard Portes would have written about Iceland at all, much less as they did, had they not been paid, and their conclusions were so completely absurd that if they weren’t affected by the money, one must call their judgment into such serious question that it almost wouldn’t matter. More generally, if these people were saying only what they believed, is it credible that they would literally never make a public statement or policy recommendation contrary to the interests of those paying them?
Question: Is there any reason to hope that there will be meaningful reform of our financial system? And will there be any justice for those who contributed significantly to causing this mess? -David
Charles Ferguson: I’m not optimistic that there will be any serious reform, or certainly any real justice, done soon. I think that unfortunately it will depend largely upon public opinion and pressure, rather than simply judgment on the merits. Many analysts feel that the next crisis could well provide that.
Oscar-Winning ‘Inside Job’ Director Attacks Economists’ Ties to Financial Sector
Question: I watched “Inside Job” three times in a row because it incited emotions ranging from helplessness to anger — both of which solve nothing. So, what can I and people like me actively do with this information? – Howard Carter, III
Question: First, I want thank you for making your excellent film on the malignant philosophical and ethical causes of the financial crisis. Is there an organization forming that will allow lay citizens like myself to bring pressure to bear on our politicians to serve our interests rather than those of the big banks and financial services giants? Any information you can make public will be greatly appreciated. – Ann Scott
Question: I felt mad and sad in equal parts after watching your documentary. Please guide as to what we can do to help this movement of transparency and financial reforms? – Bibag
Charles Ferguson: These are very difficult questions. The film’s Web site contains links to organizations that work on these questions, such as the Center for Responsible Lending and Common Cause, and of course people should think carefully about which candidates they vote for and contribute to. But it seems unlikely to me that these “normal” political processes will be sufficient to change the situation, given the role that money now plays in American politics, and thus some people have suggested that a third party or social movement (akin say to the civil rights movement or the environmental movement) may be required.
Question: Is the worst still to come to everyone here in the U.S. and abroad as a result of the fraudulent activities of the U.S. financial sector? – Isaac Jackson
Charles Ferguson: That is hard to tell. In the short term, it is difficult to know what will happen to the U.S. economy; in some ways it seems to be recovering well, with high productivity growth and with the IT sector performing well, but at the same time, 28 percent of all U.S. mortgage holders are “underwater,” meaning they owe more than their home is worth, wages are stagnant, and of course the unemployment situation remains very bad. In the longer term, the reform measures taken by the Obama administration may prove insufficient to prevent another crisis a decade from now. We don’t know.
Question: Do you, or does anyone, have any idea as to how viewing of the Academy Award-winning documentary “Inside Job” may have been repressed? It only played in about five theaters in all of northern California (Bay Area only), and Blockbuster video has informed me that they will not be stocking it for rental. It might make a good story, because it certainly seems strange, considering all the media attention it has received. – Greg Loper
Charles Ferguson: I am not aware of any repression of the film, although some individual companies may have chosen not to sell it. In general, by documentary standards, it has been widely distributed and the DVD continues to sell well, for example on Amazon, so I don’t think that there has been any systematic repression. I would say in fact that my film’s distributor, Sony Pictures Classics, has done an excellent job.
Question: In connection with disclosure issues, does anyone know who financed this film? I checked the film’s Web site, and there was no mention of this. – Nick Nicholas
Charles Ferguson: The film was mostly financed by Sony Pictures Classics, with minority investments by two individual investors. I held contractual “final cut,” meaning the legal right to make the final decisions with regard to the film’s contents, and in fact neither Sony nor anyone else tried to interfere with the content of the film.