It's been nearly three years now. The ripples which started with defaults in US sub-prime mortgages have turned into the biggest financial convulsion of the modern era, then into a devastating blow to the real economy globally and now, as most important things do, into a subject for the arts. Inside Job, a documentary about the financial crisis directed by Charles H. Ferguson and on general release in the UK since last week, has been widely lauded, even picking up a Oscar (Best Documentary Feature). But does silver screen treatment add anything to the already extensive commentary on the subject?
The answer is yes. If you see this film, take a notebook because you'll get both an engaging history lesson and an economic tutorial. First, some scene setting in Iceland, whose economic meltdown was one of the most dramatic examples of how it all went wrong. Next, how the sandcastle was built: the rise of derivatives, banks' increasing use of mortgage-backed CDOs, the resulting sub-prime boom and then the use of credit default swaps to make money as the CDOs went sour. Then, the collapse: the Lehmann bankruptcy, the failure of AIG, consolidation in the banking sector, the role of credit rating agencies and last year's SEC investigation of Goldman Sachs - all these, and many other, key elements of the saga are slotted into place. Ferguson mixes up broad-brush narrative and clear explanations with juicy details from an impressive range of talking heads - regulators, financiers, academics, politicians, and even a therapist and ex-brothel madam have their say. If you take away nothing else, the film is a great way to ensure you'll be able to put a face and some facts, including the odd fun one, to a name like Lloyd Blankfein, Christine Lagarde or Timothy Geithner next time you read about them in the financial press.
There's a particular emphasis on the potential conflict of interests that business schools face - many economics and business professors are, in one way or another, in the pay of financial institutions and so, the film asks, can they be trusted to analyse Wall Street or the City impartially? This question has been asked before, but never made so prominent - the sadistic will enjoy watching the academics interviewed squirm as Ferguson gradually recasts them as defendants rather than witnesses. More radical is Ferguson's suggestion that the personal vices of some bankers, namely drug-taking and the use of prostitutes, should be connected to sins they committed on the job.
Ferguson adeptly links events in Europe and the US to the fortunes of Asian workers - there's a moving moment when a Chinese woman speaks of the "good money" ($80 a month) that many like her lost as a result of the crisis. But he ignores the time lag before the crisis hit emerging markets, as it took a while for the financial turbulence to translate into lost jobs and lowered consumer demand. A further criticism is that he fails to place the activities of bankers in the wider context of a society that, in the UK and America at least, has demanded more and more cheap luxuries and easy credit over past decades, giving the financial services sector the incentive - and the loosened regulatory climate necessary - to fulfill these desires.
With its focus on the grotesque errors of the bankers, perhaps Inside Job can be seen, in this age of reality TV, as a Godzilla or Night of the Living Dead for our times, presenting society's ills in monster form. It has all the elements you'd expect from this kind of flick. There's breaktaking landscapes - Nordic volcanoes and aerial views of the Manhattan skyline - and also more intimate shocks in bare office spaces and seemingly innocuous surburban homes. There's menacing music a-plenty, no shortage of villains and a good batch of saviours too - Raghuram G. Rajan - a doomsayer no-one would believe, feisty FT commentator Gillian Tett and even a voiceover by the chiselled hero of the Bourne Identity thrillers, Matt Damon. So for those who like to watch the world brought to the brink of destruction at your local cinema, it could be a fun night out. Just don't blame us if you learn something.