Tavis: Charles Ferguson is a talented documentary filmmaker who of course won the Academy Award Sunday night for his latest project, “Inside Job.” The film is a compelling look at what went wrong on Wall Street and the events that led to the global financial crisis. Beginning March the 8th you can pick up a copy of the film on DVD and Blu-Ray. Here now, though, a scene from “Inside Job.”
Tavis: First of all, let the record show that you are wearing jeans today.
Charles Ferguson: Yes, I am.
Tavis: Yeah. For those who saw the show, you’ll get the punchline. Congratulations, first of all.
Ferguson: Thank you.
Tavis: Second of all, can I grab this?
Ferguson: You certainly can.
Tavis: Can I –
Ferguson: Just you’ve got to give it back.
Tavis: Yeah. Do I have to?
Ferguson: Yup. (Laughter)
Tavis: Whoa. These things are really heavy, and very nice. As I said, congratulations. Let me start by asking how it feels to have done something that is prestigious enough to have claimed this prize. Everybody’s been talking about it, who has seen the documentary, and by your own admission and by your own speech the other night, nothing has changed.
What happens when you invest that much of yourself into something and you look up a year later and you claim this prize, but what you really care about, the issue, hasn’t been addressed?
Ferguson: Well, it’s of course disappointing, but there are many people who are working on these questions and sometimes things take time and you have to take the long view. The world’s not a perfect place and democracy sometimes works slowly, but it’s better than the alternative.
Tavis: Speaking of “Inside Job,” take – I should put this thing down, I’m getting really comfortable here. (Laughter) You might not get this back if I don’t set it down.
Speaking of “Inside Job,” take me inside and tell me how you came around to the process of knowing how to attack the subject matter. I ask that because this is such a massive issue, and trying to squeeze this into a documentary – how did you know exactly what your route was going to be, the story you wanted to tell?
Ferguson: Well, of course in the beginning I didn’t, but I had a lot of help. I am very fortunate in that it turned out that I’ve known for a long time several of the people who were among those who first warned about the coming of this crisis. Two of the people who are in the film, Nouriel Rabini and Charles Morris are actually people I’ve known for 10, 20 years.
In 2007 they started talking to me about this, saying something’s coming down here. So by the time Lehman Brothers collapsed in September of 2008 and I decided to make the film, I already had been taught a lot about this, and then I just started doing a lot of research.
Tavis: What surprised you most?
Ferguson: There were two big surprises, and both in a pretty negative direction. One was the ineptitude of the Bush administration’s response to the crisis in 2008, that people were so completely unprepared for, for example, the bankruptcy of Lehman Brothers, and so ignorant about what its consequences would be.
The second surprise was just the incredibly low level of ethical behavior in American investment banking. When I started making the film it was already clear that some bad things had happened, but if somebody had told me that we were going to discover that all the major investment banks had been creating securities and selling them with the intent of profiting by betting against them, betting on their failure, I would have said, no, we don’t do that in the United States. But turns out, we do.
Tavis: Just days ago on this program we had Phil Angelides, as you know, the chair of the financial inquiry crisis commission, and their report has a number a conclusions, but two things stand out, one in particular for our conversation.
They discover in their report and share with the American in this now best-selling book that this crisis was avoidable, number one, and number two, that the government was not prepared, as you just mentioned, to really handle it when the crisis came, but it was, in fact, avoidable.
What do you make of the fact that the American people have suffered in the way that they have, and all of this, if we are to believe Mr. Angelides’ commission and believe your documentary, all of this was avoidable?
Ferguson: Well, it’s horrible, of course, and America went through 40 years without any financial crises when regulation was much tighter and banking wasn’t quite so exciting. Banking’s gotten very exciting in a very dangerous way, and we have to return to a much more regulated financial sector.
I hope that the American people will become upset enough and angry enough and informed enough and activist enough to do something about this.
Tavis: You mentioned Bush a moment ago, President Bush in your indictment of what went wrong here. This is not, as you obviously know, not just a Republican problem. There’s blame for Clinton, there’s blame for the Obama administration, the clip we just saw a moment ago. Talk to me about the bipartisan nature of this crisis.
Ferguson: It is a thoroughly bipartisan problem at this point, and many of us, including myself, were deeply disappointed with President Obama’s behavior. He said during his campaign things that led us to believe that he would take action about this, and when the American people supported him and voted for him and contributed to his campaign I think that many Americans thought that these issues would be addressed.
It’s been a huge disappointment to see that he’s turned out to be in many ways just more of the same. Whether it’s because of his personal emotional characteristics or whether it’s because of the structural issue that Wall Street gives money in enormous quantities to both parties now, I don’t know. Maybe some mixture of the two.
But this is, in a general way, now a dangerously bipartisan problem because America only has two political parties, and they’re both so captured now by Wall Street and Wall Street’s lobbying and money.
Tavis: In the early days, when President Obama started announcing who his team was going to be, should we have known then that nothing was going to happen? When you stack your administration with a bunch of Clintonites, many of them who helped deregulate back in the Clinton years, which started this process in motion, could we have known then that not a whole lot was going to happen?
Ferguson: It certainly began to look that way pretty early, yes. One could always hope that the president himself would override his advisers and control them and manage them, but yes, the first really bad, disappointing sign was the team that he selected, and you’re right, it was many Clintonites, it was many people who contributed to causing the crisis. It was also, in some cases, people who had done very unethical things in banking.
Tavis: What about the fact that nobody has paid a price for this; and for somebody to pay a price it means that under the Obama watch somebody in his Justice Department has to make this a priority, and administrations don’t really like going after the previous administration. So here again, nobody pays the price.
Ferguson: Yes, and I think one thing that’s important to point out is that it wasn’t always this way. After deregulation started in the 1980s and America started having very unethical behavior and financial crises as a result – the first one was the S&L crisis in the 1980s – and as a result of that, several thousand financial executives were put in prison – several thousand people were put in prison. This time, literally zero, and it’s I think a devastating, devastating –
Tavis: Why is that, or why is that not, to put it more accurately?
Ferguson: I think unfortunately it’s predominately the power that Wall Street has now. Wall Street, the financial sector, at the height of the bubble just before the crisis, was 40 percent of American corporate profits, and now the wealthiest one-tenth of 1 percent of the population have the lowest tax rates and an unprecedented amount of wealth, and these companies employ former government officials and they lobby very heavily, and they’ve become so ingrained in our political system, in our regulatory system, even in the university and academic system, that it’s now very, very difficult to take forceful action against them.
Tavis: So how likely is it that over the course of your career that you may end up doing another piece similar to this because we will find ourselves once again in a situation similar to this?
Ferguson: Unfortunately, I think it’s very possible that in another 10 or 15 years we’re going to have another financial crisis. Since deregulation began we’ve had a major financial crisis in America approximately every decade, and each one, by the way, has been worse than the last – more criminal and also more financially and economically serious.
So perhaps we’re going to have to have another one, a really bad one, before the American people will force our leaders to change these things.
Tavis: If Wall Street has that kind of power, if we have a president who is elected overwhelmingly with progressive support who thought he was going to do something and he has not done anything, how do the American people take this back, as it were?
Ferguson: Well, it will take time and it will take pressure and anger and the creation of new organizations, but – not that the two situations are identical by any means, but one month ago nobody would have thought that Egypt and Tunisia and Libya had any chance of throwing off their dictators, and now they’re all gone.
So in the long run I am very optimistic about the American people and about democracy.
Tavis: If what we witness, so well documented in your piece, “Inside Job,” isn’t enough to get the American people angry, upset enough to rise up like we see in Egypt and Tunisia, et cetera, et cetera, what’s it going to take? I hear the point you’re trying to make and I’m trying to be optimistic along with you that we’re going to one day wake up and take this situation under control as the American people.
But if this crisis that you document doesn’t do it, what’s it going to take to get us upset?
Ferguson: Well, it might take another one. It might also take five or 10 years of the American people realizing that what we have now is the new normal. This actually is the first of these financial crises that has made a huge mark on the American people broadly. The first two of them didn’t, for various reasons.
But now this has hit a lot of people – the foreclosures, the unemployment rate, and of course average American incomes are actually down. This is the first generation in American history whose children are going to be worse off than their parents, and I think that it’s going to take people coming to terms with the fact that that’s what has happened as a result of this, and deciding that really, they have to do something about it.
Tavis: So are you hopeful about that?
Ferguson: In the long run, yes. I think that President Obama had a very powerful, unique, historical opportunity when he was elected and he blew it, badly. Now it’s going to be a much longer, much more gradual, tougher process to get this changed, so now we’re talking about years, maybe even decades, before this has changed, but yes, I do think that eventually, it will change.
Tavis: What conditions are you referring to, right quick, that have so changed that if this president had eight years total – we know he’s had two, he’s got two more to go, may get another term – what conditions have changed so much that he can’t do what we thought he could do or would do in terms of transforming this system? Why can’t he do that in the next six years?
Ferguson: Well, he could certainly try, and there are many things that he could, indeed, do, but it’ll be much more difficult now that there’s a Republican Congress; certainly a Republican House. We’ll see what happens in the next election. There could be a Republican Senate, too.
I think that there’s also a cynicism in America now about its political leaders. I think that his campaign was perhaps the last time in a while that we’re going to have really idealistic people believing that they can do something by electing somebody for president. That, of course, that’s perhaps the biggest casualty, is –
Tavis: I think you’re right about that. I’ve said that many times. A lot have said that, actually, lately, because I think you get those moments where people believe that something can be transformed, that idealism is alive, and when that goes away it doesn’t come back every two years, every four years – it doesn’t quite work that way.
His name, of course, Charles Ferguson; of course you know that – winner of the Academy Award this year for best documentary, called “Inside Job.” You can get it now on DVD and on Blu-Ray. Charles, once again, congratulations. Great work.
Ferguson: Thank you, sir.
Tavis: I’m honored to have you on this program.
Ferguson: Thank you very much.
Tavis: That’s our show for tonight.
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